Housing developers lining up to build in Charles City?

By Travis Fischer, tkfischer@charlescitypress.com

Conditions are looking favorable for new housing developments in Charles City.

At the Charles City Area Development Corp.’s board meeting on Wednesday, Feb. 28, housing committee co-chair and Charles City Mayor Dean Andrews introduced a proposal to build a new apartment complex in the Southwest Development Park.

Commonwealth Development Corp., a Wisconsin-based development company, is interested in building a 40-unit apartment complex consisting of two buildings of apartments of various sizes, along with a shared commons building for tenants to host larger gatherings.

The tentative plans for the project would be to build on what will be the southeast corner of 13th Street and east Corporate Drive, once 13th Street is extended by the city.

The CCADC, which owns the land in question, had previously committed to donating the lots to a developer interested in building housing. Now Commonwealth and the CCADC are taking the first steps to capitalize on that offer.

“This isn’t the only person we’re talking to, but this is the only person we’re talking to about this property,” said Andrews.

A critical component to the project is the Low-Income Housing Tax Credit, which provides a substantial financial incentive to developers to build affordable housing.

“These are meant for people who have 30% to 60% of the average median income,” said Andrews.

According to the Iowa Finance Authority, the Average Median Income (AMI) in Floyd County is $91,000. How that applies to Section 42 housing income limits depends on the number of people. At 60%, the income limit for a single person would be $35,100. For a household of three, it would be $45,120.

For this project, at least 40% of the units in the project must be occupied by individuals or families with incomes of up to 80% of the AMI, so long as the average income is 60% or less.

As one of 11 cities in Iowa designated as a “Thriving Community” by the Iowa Finance Authority, projects in Charles City will be given extra consideration in this year’s round of approvals.

The Low-Income Housing Tax Credit can dramatically subsidize the expense of development. The application for these tax credits is coming due in April, resulting in a surge of interest from developers.

The Commonwealth development isn’t the only iron that Charles City has in the fire though. The city is in serious talks with other housing developers also interested in applying for the Low-Income Housing Tax Credit.

Pivotal Housing Partners, based out of Ohio, has shown interest in building a similar apartment complex in Charles City, scouting out potential locations on the north side of the city.

At the same time, North Arrow Partners, out of Illinois, is looking at refurbishing the old Cedar Health nursing facility into a multi-family building.

“All these guys have shown really strong interest,” said Andrews.

All three developers have their own bureaucratic obstacles to overcome ahead of the application deadline. For Commonwealth, a purchase agreement needs to be worked out with the CCADC and the land itself needs to go through the rezoning process.

Meanwhile, one of the sites being considered by Pivotal will require voluntary annexation, which will require a lot of paperwork between the city and the state.

While Andrews says it’s not guaranteed that any of these potential projects will be awarded the state tax credits this year, and unlikely that more than one will, this isn’t the only option to get a new housing development started this year.

Coming up in June will be the deadline for a similar Workforce Development tax credit, which Andrews hopes to see similar interest in from developers as that deadline nears.

“I hope this is the first steps of many steps to get us some more housing,” said Andrews. “This is a good start.”