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Reynolds commits $100M more to overcoming housing shortage
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Reynolds commits $100M more to overcoming housing shortage

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CEDAR RAPIDS — Speaking to Iowa’s growing need for affordable housing to help meet workforce demands, Gov. Kim Reynolds announced Wednesday a $100 million infusion to increase the state’s housing stock and protect Iowans’ ability to live in or near the communities where they work.

That allocation — made possible through the American Rescue Plan pandemic relief act and local fiscal relief funds — will add to the $230 million over five years the Iowa Legislature already passed earlier this year to help overcome the state’s housing shortage.

That legislation alone, Reynolds said during the HousingIowa Conference in Cedar Rapids, made the state a leader for passing “one of the most ambitious plans for housing growth anywhere in the country.”

“If this was all that we had done to jump-start construction over the coming years, it would already have been historic,” she said. “But we didn’t stop there.”

With Wednesday’s announcement that she’s committing another $100 million to housing from Iowa’s federal coronavirus relief funds, Reynolds said Iowa now has designated $330 million over five years to “overcoming Iowa’s housing shortage.”

“For Iowa to continue to thrive, we must eliminate barriers to those trying to enter the workforce,” said Reynolds, referencing Iowa’s worker and housing shortage interplay.

“This transformative investment promises to build approximately 36,000 new housing units statewide, with an average contribution per unit of more than $9,000,” she said. “This represents a much-needed down payment on Iowa’s long-term prosperity.”

While Iowa today is in a “strong economic position” after the shock of 2020, Reynolds said, the state needs more “high-quality attainable housing” if it’s to keep up with its employment opportunities. Specifically, Iowa is expected to need another 47,000 homes by 2030 — including 10,586 for Iowans earning $38,450 a year or less.

“We’re doing everything we can to expedite that and not only retain but recruit more people to this great state,” Reynolds said. “And these families — many of whom will be attracted to our state by our economic growth, our low cost of living, and safe neighborhoods — they need to be able to live in the communities where they work.”

Iowa might be nationally recognized for its employment opportunities. But, Reynolds warned, “Our housing shortage continues to represent a catch.”

“We’ve seen a growing mismatch between where the job opportunities are thriving and where people can find affordable places to live,” she said.

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In announcing Iowa’s additional $100 million housing investment, Reynolds spelled out a method to its distribution:

$45 million will go into the Federal Housing Tax Credit Program expected to move about 15 housing tax credit projects forward that otherwise couldn’t proceed, according to Reynolds. Through that investment, the program is expected to create about 700 rental homes for Iowans.

Eligible projects include those that applied for a 2021 Federal Housing Tax Credit Program award but didn’t receive one.

“Projects will be prioritized based on scoring criteria and must be shovel ready,” according to the governor’s office.

$20 million will provide “gap financing” to existing Workforce Housing Tax Credit Program projects to help with the rising costs of construction materials.

“These funds will help ensure that existing Workforce Housing Tax Credit projects are able to be completed, expanding housing opportunities for Iowans,” according to her office.

$20 million will go toward the new Downtown Housing Grant Program aimed at supporting downtown revitalization projects “through the creation of new housing opportunities in communities with populations of 30,000 or less.”

$10 million will help secure a larger pipeline of skilled workers and more opportunities for homebuyers seeking a property in their price range through the Homes for Iowa initiative. That public-private initiative trains offenders at the Newton Correctional Facility to build single-family homes.

The investment, according to the governor, will help with material costs, creation of a permanent shop and establish a moving equipment set up allowing the program to scale production and training.

$4 million will go into the Home Repair Block Grant Pilot Program to help homeowners fund necessary housing repairs — as Iowa’s housing stock of comparatively older than rest of the country, with an average median home age of 50 years.

And a final $1 million will go into a Minority Homebuyer Down Payment Assistant Pilot meant to break down barriers to homeownership for 200 eligible Iowa minority households needing help buying a home. The program, according to the governor, will provide a $5,000 down payment and closing costs grant when used in conjunction with an Iowa Finance Authority mortgage program.

If successful, Reynolds said, those pilots could be “rapidly expanded.”

“Combined with our legislative appropriation, today’s announcement represents far and away the most consequential housing policy Iowa has ever implemented,” Reynolds said. “And I couldn’t be more excited to see what you, the builders, the developers, the community leaders in our state do with it.”

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