CHAPTER 48WORKFORCE HOUSING TAX INCENTIVES PROGRAM26148.1(15) Authority and purpose. The workforce housing tax incentives program is administered pursuant to Iowa Code sections 15.351 through 15.356 and 2022 Iowa Acts, Senate File 2325, sections 7 through 13. The purpose of the program is to assist the development of workforce housing in Iowa communities by providing incentives for housing projects that are targeted at middle-income households and that focus on the redevelopment or repurposing of existing structures.Related ARC(s): 1801C, 6467C26148.2(15) Definitions. As used in this chapter, unless the context otherwise requires:
"Authority" means the economic development authority created in Iowa Code section 15.105.
"Average dwelling unit cost" means the costs directly related to the housing project divided by the total number of dwelling units in the housing project.
"Board" means the members of the economic development authority appointed by the governor and in whom the powers of the authority are vested pursuant to Iowa Code section 15.105.
"Brownfield site" means an abandoned, idled, or underutilized property where expansion or redevelopment is complicated by real or perceived environmental contamination. A brownfield site includes property contiguous with the site on which the property is located. A brownfield site does not include property which has been placed, or is proposed for placement, on the national priorities list established pursuant to the federal Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. In order to administer similar programs in a similar manner, the authority will attempt to apply this definition in substantially the same way as similar definitions are applied by the brownfield advisory council established in Iowa Code section 15.294 and may consult members of the council or other staff as necessary.
"Community" means a city or county.
"Costs directly related" means expenditures that are incurred for construction of a housing project to the extent that they are attributable directly to the improvement of the property or its structures. “Costs directly related” includes expenditures for site preparation work, surveying, construction materials, construction labor, architectural services, and engineering services. “Costs directly related” does not include expenditures for property acquisition, building permits, building inspection fees, furnishings, appliances, accounting services, legal services, loan origination and other financing costs including interest on construction loans, syndication fees and related costs, developer fees, or the costs associated with selling or renting the dwelling units whether incurred before or after completion of the housing project.
"Disaster recovery housing project" means a qualified housing project located in a county that has been declared a major disaster by the President of the United States on or after March 12, 2019, and that is also a county in which individuals are eligible for federal individual assistance.
"Grayfield site" means a property meeting all of the following requirements:
- The property has been developed and has infrastructure in place but the property’s current use is outdated or prevents a better or more efficient use of the property. Such property includes vacant, blighted, obsolete, or otherwise underutilized property.
- The property’s improvements and infrastructure are at least 25 years old and one or more of the following conditions exists:
- Thirty percent or more of a building located on the property that is available for occupancy has been vacant or unoccupied for a period of 12 months or more.
- The assessed value of the improvements on the property has decreased by 25 percent or more.
- The property is currently being used as a parking lot.
- The improvements on the property no longer exist.
"Greenfield site" means a site that does not meet the definition of a brownfield site or grayfield site. A project proposed at a site located on previously undeveloped or agricultural land shall be presumed to be a greenfield site.
"Housing business" means a business that is a housing developer, housing contractor, or nonprofit organization that completes a housing project in the state.
"Housing project" means a project located in this state meeting the requirements of rule 261—48.4(15).
"Laborshed area" means the same as defined in 261—Chapter 173.
"Laborshed wage" means the same as defined in 261—Chapter 173.
"Multi-use building" means a building whose street-level ground story is used for a purpose that is other than residential, and whose upper story or stories are currently used primarily for a residential purpose, or will be used primarily for a residential purpose after completion of the housing project associated with the building.
"New dwelling units" means dwelling units that are made available for occupancy in a community as a result of a housing project and that were not available for occupancy as residential housing in the community for a period of at least six months prior to the date on which application is made to the authority under the program. If a dwelling unit has served as residential housing and been occupied during the six months preceding the date on which application is made to the authority under the program, then the dwelling unit shall be presumed not to be a new dwelling unit.
"Program" means the workforce housing tax incentives program administered under this chapter.
"Project completion" means the same as defined in Iowa Code section 15.355(2).
"Qualifying new investment" means costs that are directly related to the acquisition, repair, rehabilitation, or redevelopment of a housing project in this state. For purposes of this rule, “costs directly related to acquisition” includes the costs associated with the purchase of real property or other structures.
- The amount of costs that may be used to compute “qualifying new investment” shall not exceed the costs used for the first $150,000 of value for each dwelling unit that is part of a housing project.
- “Qualifying new investment” does not include the following:
- The portion of the total cost of a housing project that is financed by federal, state, or local government tax credits, grants, forgivable loans, or other forms of financial assistance that do not require repayment, excluding the tax incentives provided under this program.
- If a housing project includes the rehabilitation, repair, or redevelopment of an existing multi-use building, the portion of the total acquisition costs of the multi-use building, including a proportionate share of the total acquisition costs of the land upon which the multi-use building is situated, that are attributable to the street-level ground story that is used for a purpose that is other than residential.
- Any costs, including acquisition costs, incurred before the housing project is approved by the authority.
"Refund notice" means a notice provided by the authority of the amount that an eligible housing business may claim as a refund of the sales and use tax under Iowa Code section 15.355(2).
"Rehabilitation, repair, or redevelopment" means construction or development activities associated with a housing project that are undertaken for the purpose of reusing or repurposing existing buildings or structures as new dwelling units. Rehabilitation, repair, or redevelopment does not include new construction of dwelling units at a greenfield site. Rehabilitation, repair, or redevelopment includes new structures at a qualified grayfield site.
"Small city" means a city that meets the applicable criteria in rule 261—48.3(15).
"Tax credit certificate" means a certificate issued by the authority stating the amount of workforce housing investment tax credits under Iowa Code section 15.355(3) that an eligible housing business may claim.
"Urban area" means any city or township, except for a small city, that is wholly located within one or more of the 11 most populous counties in the state, as determined by either the most recent population estimate produced by the United States Bureau of the Census or the most recent decennial census released by the United States Bureau of the Census.
Related ARC(s): 1801C, 3581C, 4724C, 6086C, 6467C26148.3(15) Small cities. For the purposes of this chapter, the following subrules will determine which cities and townships will be considered small cities. 48.3(1) For projects that received a refund notice or tax credit certificate on or before June 30, 2021, a small city is any city or township located in this state, except those located wholly within one or more of the 11 most populous counties in the state, as determined by the most recent population estimates issued by the United States Bureau of the Census. 48.3(2) For projects that received a refund notice or tax credit certificate on or after July 1, 2021, a small city is any city or township located in this state, except those located wholly within one or more of the 11 most populous counties in the state, as determined by either the most recent population estimate produced by the United States Bureau of the Census or the most recent decennial census released by the United States Bureau of the Census. 48.3(3) On or after July 1, 2021, any city or township located wholly within one or more of the 11 most populous counties in the state, as determined pursuant to subrule 48.3(2), may be considered a small city if the city meets all of the following requirements: a. The city or township has a population less than or equal to 2,500 as determined by either the most recent population estimate produced by the United States Bureau of the Census or the most recent decennial census released by the United States Bureau of the Census. b. The city or township had population growth of less than 30 percent as calculated by comparing the population in the most recent decennial census released by the United States Bureau of the Census to the population in the decennial census released ten years prior.Related ARC(s): 6467C26148.4(15) Housing project requirements. 48.4(1) Eligible project types. a. To receive workforce housing tax incentives pursuant to the program, a proposed housing project shall meet all of the requirements of Iowa Code section 15.353. Projects located in a 100-year floodplain are not eligible. b. The authority will determine whether a dwelling unit should be classified as a single-family dwelling unit for the purposes of this subrule. The authority may consider factors such as: (1) Whether a unit is separated from other units by a ground-to-roof wall; (2) Whether the unit has a separate heating system; (3) Whether the unit has an individual meter for public utilities; and (4) Whether the unit has other units above or below. 48.4(2) Maximum cost. Except as provided in subrules 48.4(3) and 48.4(4) below, the average dwelling unit cost does not exceed the maximum amount established by the board for each fiscal year for the applicable project type and project location. The board shall establish the maximum average dwelling unit cost for the project types set forth in paragraphs 48.4(2)“a” through “d.” In establishing each maximum average dwelling unit cost, the board shall primarily consider the most recent annual United States Bureau of the Census building permits survey and historical program data. a. Single-family dwelling units located in a small city. b. Single-family dwelling units located in an urban area. c. Multiple dwelling unit buildings located in a small city. d. Multiple dwelling unit buildings located in an urban area. 48.4(3) Maximum cost for historic projects. If the project is a qualified rehabilitation project, as that term is defined in Iowa Code section 404A.1(8)“a,” the average dwelling unit cost shall not exceed 125 percent of the maximum average dwelling unit cost established by the board for the applicable project type and project location as provided in subrule 48.4(2). 48.4(4) Maximum cost on or before June 30, 2021. For projects that received a refund notice or tax credit certificate on or before June 30, 2021, the average dwelling unit cost shall not exceed $200,000 per dwelling unit. If the project involves the rehabilitation, repair, redevelopment, or preservation of eligible property, as that term is defined in Iowa Code section 404A.1(8)“a,” the average dwelling unit cost does not exceed $250,000 per dwelling unit.Related ARC(s): 1801C, 3581C, 5139C, 6467C, 7492C26148.5(15) Housing project application and agreement. 48.5(1) Application. a. A housing business seeking workforce housing tax incentives provided in rule 261—48.6(15) shall make application to the authority in the manner prescribed in this rule. b. The application required in paragraph 48.5(1)“a” shall include all of the following: (1) The following information establishing local participation for the housing project:- A resolution in support of the housing project by the community where the housing project will be located.
- Documentation of local matching funds pledged for the housing project in an amount equal to at least $1,000 per dwelling unit, including but not limited to a funding agreement between the housing business and the community where the housing project will be located. For purposes of this paragraph, local matching funds shall be in the form of cash or cash equivalents or in the form of a local property tax exemption, rebate, refund, or reimbursement.