Charles City awarded millions in housing project assistance

By Bob Steenson, bsteenson@charlescitypress.com

Charles City has been awarded $2.1 million in funding toward the construction of a 40-unit housing project, the Iowa Finance Authority announced Wednesday.

The city was awarded $1.1 million in Federal Low Income Housing Tax Credits, along with $500,000 in State HOME Award funds and $500,000 in a National Housing Trust Fund Award.

The tax credits are actually an annual award for the project developer, available to be collected for 10 years once the project is available for tenants, so totaling up to $11 million in potential equity toward the project, depending on what the credits can be sold for by the developer.

The funding will support development of what is being called Carrie Lane Place, in the southern part of the city near the Southwest Development Park, where the city is extending 13th Street to Corporate Drive.

The Charles City Area Development Corp. donated the land to the city in anticipation of a housing project there.

“We’re very excited. This has been a long time coming,” said Emily Garden, who served on the CCADC’s Housing Committee during the application process for the tax credits and is still a member of the city Thriving Community Committee.

“This is now happening. Now that the state has approved the funding, it’s moving forward,” Garden said.

Commonwealth Development Corp., of Fond du Lac, Wisconsin, is listed as the developer.

Being awarded the Low Income Housing Tax Credits was the last major piece of the development puzzle to come together. With it now in place, Garden said she is hopeful to see the project break ground as early as July 23.

Mayor Dean Andrews said the funding is “a big plus for our community.”

“This is affordable housing for people who have jobs here,” Andrews said. “Many people with starter jobs in our community, this is going to fit them perfectly.”

Charles City Administrator Steve Diers said, “The Carrie Lane Place development will bring 40 additional apartments to Charles City, enabling our workforce to live closer to where they work and creating positive ripple effects.”

“We’re proud of our Iowa Thriving Communities designation, which we’re leveraging as a catalyst for both housing and economic growth,” Diers said.

Charles City officials worked with the Area Development Corp. last year to apply to be named an Iowa Thriving Community by the Iowa Financial Authority (IFA) and the Iowa Economic Development Authority (IEDA).

The city was named as one of 11 Thriving Communities by the state organizations last year in the first year of the program, and one of only three communities that qualified for both the Low Income Federal Housing Tax Credits and Workforce Housing Tax Credits.

Mayor Andrews said the city is trying to arrange the Carrie Lane Place groundbreaking for the same day as the ribbon-cutting for the nine-unit Sherman Creek townhouse project being developed by the Paul Rottinghaus family’s Carlinda Limited Partnership.

IFA and IEDA Director Debi Durham is planning to be in town for that event.

Low Income Housing Tax Credits are issued by the Internal Revenue Service to states to be used to support low income housing projects. The states award the credits to local development projects in a competitive selection process.

Developers usually sell the credits to investors to obtain equity funding. The investors use the credits to reduce their income tax liability.

Once the housing project is available to tenants the investors can claim the tax credits over a 10-year period, according to the U.S. Department of Housing and Urban Development (HUD).

The tax credits are currently being sold for between 85 cents and 90 cents per $1 of face value, according to various online sources, meaning the $11 million in tax credits over 10 years for the Carrie Lane Place project could yield about $9 million to $10 million in equity funding.

The Iowa HOME Program, which awarded $500,000 to the project, is a state program that uses HUD funding to support affordable housing efforts, including homebuyer assistance, rental assistance and affordable housing project development.

The National Housing Trust Fund, which also awarded $500,000, is administered by HUD to complement efforts to increase and preserve the supply of affordable housing, including by supporting new construction.

The IFA Board of Directors on Wednesday awarded more than $10.6 million in federal housing tax credits to support the construction and rehabilitation of a total of 404 affordable rental units for Iowans.

The awards were made to 10 rental housing projects planned for Charles City along with Burlington, Davenport (two projects), Des Moines, Jefferson, Knoxville, Mount Pleasant, Oskaloosa and Spirit Lake.

“Housing is fundamental to the economic mobility of Iowans and the vitality of our communities,” said IFA Director Durham. “Congratulations to all nine communities receiving tax credits today, with a special recognition to the four designated as Iowa Thriving Communities, Charles City, Jefferson, Knoxville and Oskaloosa, for their exceptional efforts in leveraging innovative practices to attract housing opportunities for their workforce.”

— Reporter Travis Fischer contributed to this report.