Christmas Could Come Early for Iowa City Developer

Christmas could come early for an Iowa City developer if its request to use tax increment financing (TIF) to subsidize young affluent professionals who make up to 120% of the area median income to live in a swanky new 96 unit apartment complex on Riverside Drive is approved.1 This request for a $1.8 million dollar plus TIF comes before Iowa City Council for consideration at its December 2nd meeting.2

A TIF in exchange for 12 “workforce” housing units might sound like a good deal to some; however, in practical terms, Iowa City property tax payers could be subsidizing a twenty-four year old who makes $66,840. Were this individual to pay 30% of his or her income for housing, he or she would have $20,052 available to pay rent and utilities or $1,671 per month. Everyone should be so lucky! Unfortunately, Iowa City’s Economic Development Council recommends this subsidy.

This latest subsidy is an insult to people who are living on budget, paying their bills and trying to save for their own children’s education and retirement. It is also an affront to retired individuals living on a fixed income who have high Iowa City property taxes of their own to pay on top of their living and medical expenses. And even though the developer has committed to providing Iowa City with right-of-ways to improve bicycle and pedestrian traffic, improvement of bicycle and walking trails will only help the developer to better market its building, another reason why Iowa City should not grant a TIF.

This idea that Iowa City staff wants us to now subsidize “workforce housing” for “young professionals and graduate students” who earn up to 120% of the median income is problematic in so many ways, including:

1) It is not a “hand up” for someone in need but a “hand out” for an individual who makes more money per year than over one-half the Iowa City population and a gift by taxpayers to the developer.

2) Since the median income for Iowa City black households is less than white households,3 subsidizing “workforce housing” instead of “low income housing” has the potential to discriminate against black households if affluent young white professionals are selected for the workforce housing units instead of truly low income individuals.

3) Age discrimination—if it is not a violation of Iowa City’s Fair Housing Code to discriminate on the basis of age by marketing to “young professionals,” it should be. See Title 2 Human Rights, Chapter 5 (at 2-5-1C) http://www.sterlingcodifiers.com/codebook/index.php?book_id=953.

4) It’s tacky to discriminate against blue collar workers.

5) Workforce housing discriminates against non-working disabled individuals.

6) Nowhere are tax credits the developer may receive for “workforce housing” mentioned in Iowa City staff’s memorandum in support of the TIF–this benefit should be addressed and factored into any proposed rate of return before any consideration is given for such a TIF.

7) Where are we going to draw the line if we start to subsidize housing for students and professionals? Aren’t all projects, even those such as the Riverside project, which are near the University and therefore destined for development anyway, going to expect the same?

8) Take a lesson from the recent sales tax vote-if the city wants more revenue from the taxpayers it needs to be able to say that it is NOT providing TIF gifts (even though it is the holiday season) to some while expecting others to pay for the unnecessary generosity.

Iowa City Council should just say NO to this subsidy. And Council should not schedule this item for a Tuesday meeting after the Thanksgiving holiday because too many people who might otherwise comment are enjoying the holiday. TIFs deserve full transparency. I have no objection to a developer building apartments with amenities aplenty for affluent people; however, any such development should NOT be supported by Iowa City’s taxpayers subsidizing a TIF!

1See developer EMRICO LLC’s letter (by Kevin Hanick) starting at page 12 and Iowa City staff’s memorandum in support of the TIF starting on page 17 at http://www.iowa-city.org/Weblink/DocView.aspx?id=1435272&dbid=0.
2See Item 7, starting at page 472 and especially page 485 at http://www.icgov.org/docs/auto/council/12-2-2014_RegularFormalMeeting.pdf
3See City of Iowa City Equity Report 2013 at page 264/10 at http://www.iowa-city.org/Weblink/DocView.aspx?id=1440821&dbid=0.

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This entry was posted in Economic Development, Iowa City, Iowa City Council, TIF. Bookmark the permalink.

2 Responses to Christmas Could Come Early for Iowa City Developer

  1. Ludie says:

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