Communities wanting to develop housing for a growing workforce can apply to the Iowa Finance Authority for low-interest loans. The state agency announced a new program Friday that provides $5 million in low-interest loans to create multifamily dwellings for low-to-moderate income renters.
"It has to be a long-term assent for the community," says David Jamison, executive director the Iowa Finance Authority. "We look at the construction material, the type of constructions, trying to distinguish between essential amentias, or luxury amenities obviously, quality construction, and that there's quality in the energy efficiency."
Special consideration will be given to project applications in cities that have showed annual job growth during the last three years. Also, cities with populations less than 50,000 will also be prioritized since smaller communities tend to have a more limited tax base and personnel resources.
“Jobs are moving into communities all throughout our state. These jobs are both attracting current Iowans to move within the state as well giving us the opportunity to welcome new Iowans,” says Gov. Terry Branstad in a press release. “This employment growth is, in turn, creating the need for additional workforce housing and this program will allow communities to increase available housing stock to meet that demand.”
University of Northern Iowa economist Bulent Uyar says in an email that while the loans will inject resources and funding into communities, he wonders why the private sector is not meeting the demand in certain communities.
"After all, the ability and the willingness of the private sector to satisfy a need is one of the virtues of a free-market system," write Uyer. "If this program results in lower overall rents, the existing landlords might lose income. That may eventually adversely affect the quality of the available rental units due to less attention paid to maintenance and upkeep."
The loans have a one-percent interest rate and with a maximum term of 20 years. Applications are due in early November.