Charles City Area Development Corp. proposes infrastructure fund to promote new housing

By Bob Steenson, bsteenson@charlescitypress.com

A group of community officials and business people presented a plan to the Floyd County Supervisors Monday morning that could potentially make a million dollars available to help spur new housing development in the county.

Tim Fox, executive director of the Charles City Area Development Corp., presented a proposal that could revive a program that had started in 2004 and ended several years ago, where the county made a pot of money available to be used for infrastructure improvements.

The presentation was made at a supervisors workshop meeting, so no action was taken. Some discussion included the potential of parts of several million dollars that the county and cities would be getting through the federal American Rescue Plan being used toward housing incentives.

Fox noted that the ADC is identified in the community’s current 5-year plan as being responsible for housing.

“To that end, we’ve noted that Charles City is lagging behind in housing starts. It’s hurting our economic competitiveness. It’s hurting the generation of wealth locally, and we’re losing some of our best and brightest talent to surrounding communities,” Fox said.

“That’s no surprise to anybody here, because you’ve all heard the anecdotal evidence of corporate executives (who work in Charles City) living in Waverly and Clear Lake and Cedar Falls and Mason City, and we’re trying to do something to alleviate that, which is to get some housing starts,” he said.

Fox presented the administrative guidelines for what is suggested to be the Floyd County Infrastructure Assistance Fund, which would fund up to 50% of the cost of constructing new streets to accommodate housing starts.

The money would be available on a first-come, first-served basis, the proposal says.

When the 2004 project ended, there was still $25,000 left in the account, and that was used to help fund a housing study for all of Floyd County and Nashua, which was completed and presented in March 2019.

“We had a lot of findings out of that,” Fox said, adding that the most surprising was that the biggest demand was going to be in the elderly market, for both subsidized and market rate housing.

“But we also had the single family houses, not being able to meet demand for what the market is bearing, and there’s a number of reasons why the demand isn’t being met,” he said.

The main problem is that the construction cost of new homes has increased to the point that builders can’t sell them at a price that makes it possible for them to build them.

“Construction costs, the last I heard, $217 a square foot,” Fox said. “I’m sure that’s gone up since then, that was three to four months ago. Cost of infrastructure’s gone up probably double if not more since 2004.”

He said he realizes that his suggested figure of a million dollars “is a lot of money,” but he said, “We need to get some housing starts going and we need to get some housing starts going quickly or we’re going to be left behind from an economically competitive basis.”

Real estate agent Connie Parson said there are several things that help a community prepare to move into the future, and infrastructure is one of those. She also listed good schools, good jobs — and housing.

“You need housing. And we need young people. There’s no doubt you need single-family housing out there to be able to attract people to come into our schools, to attract them for our jobs, to use our infrastructure,” Parson said.

“It’s vitally important for the county to establish a fund and to be able to move forward on housing,” she said.

Fox said the county has very good manufacturing jobs that pay significantly above the state average, and “way above” the northeast Iowa, north central Iowa average.

“So we need to capitalize on that and bring some of those professional people to town and keep them here,” he said.

“We might get down to the point where an expansion locally comes down to between Charles City and another community. I guarantee you that a lack of housing is going to be significant impetus in decision-making,” Fox said.

He emphasized that the program would be available county-wide.

“Who’s ever willing to get ready and get prepared can capitalize on the opportunity,” he said.

County Auditor Gloria Carr said she had recently participated in a webinar on using American Rescue Plan funding.

“They said that cities and counties should be working together because you could maximize, whether it’s new business or housing or whatever, you could maximize with a city offering a grant for a particular aspect and the county offering a grant for something different,” she said.

Supervisor Chairperson Linda Tjaden said they need to form a committee with representation from throughout the county, “to have everyone come to the table with their ideas so we can start hashing that out and figuring what approach we want to take.”

“We’d be more than willing to help,” Fox said.

Charles City Mayor Dean Andrews said, “The last 10 years all you ever heard is we need jobs, we need jobs, we need jobs. Well, now we’ve got the jobs and we need places for people to live who can supply those jobs. But the problem with having a place to live is the developer can’t afford to do it on their own.”

He referred to the Parkside development project, where the city agreed to purchase the lots and give them to the developer, with the idea that the increased property taxes on the improved lots would pay the city back.

Real estate agent Dean Stewart said, “It’s pretty apparent that these are good first steps to get going. It’s not happening organically on its own. It’s not going to happen without incentive and county-city engagement.

“This incents the developers,” Stewart said about the infrastructure proposal. “I can’t wait to see the programs that incent the buyers, whether that’s utility, city, any kind of tax rebates and abatements.

“This is a good first step to get the process going, but I would expect and anticipate that there are other incentives that are going to need to be put in place to make it viable and go,” he said.