Housing commission backs CDBG recommendation for Iowa City Housing Authority request

The Housing and Community Development Commission voted Sept. 15 to recommend that the City Council approve the commission staff recommendation to fund the Iowa City Housing Authority’s single CDBG application for the current funding cycle. The motion passed on a voice vote with no opposing votes. The commission’s action is a recommendation to the council; final funding is decided by the City Council.

Commissioners and staff said the application addresses an unmet need for larger-family affordable housing in the city. “I’m gonna vote to approve this. I thought it was a good application,” said a commissioner during discussion, noting the project’s focus on four- and five-bedroom units and the city’s recent change to the housing code allowing certain multifamily units with larger bedroom counts.

Staff warned commissioners that because this year brought only one competitive proposal, the commission was effectively deciding whether to fund that single application or to roll the CDBG funds into the next competitive round. A city staff member explained, “Because we received one proposal, it doesn't necessarily mean you're obligated to fund it. If for some reason you didn't want to, we would roll those funds into the next competitive funding round.”

Commissioners asked about the application’s pro forma, management fees and the risk that costs or project scope could change after award. One commissioner queried whether the housing authority could split funds to serve more than one property or pursue acquisition strategies that used more of the applicant’s equity; staff responded that the commission was reviewing the application as submitted and that any future changes would be addressed in subsequent procurement and funding steps.

During discussion commissioners highlighted affordability targets tied to voucher levels and household size. One commissioner said the proposed rents would align with voucher assistance for large households and stressed the importance of any project that increases supply even by one unit. Another commissioner noted concerns about timing for sellers and project closings if the city’s federal grant funds are not available until the following fiscal year.

After discussion, the commission chair moved to recommend approval; the motion was seconded and approved by voice vote. The commission’s approval sends the staff recommendation to the City Council for final action.

The application and staff recommendation are part of the city’s CDBG allocation process; staff emphasized the commission is not obligated to fund the only application and that unallocated funds can be held for the next round. The commission did not set specific funding contingencies or amendments during the meeting.

Next steps: the City Council will receive the commission’s recommendation and act on the CDBG funding decision. The commission and staff noted that procurement, property acquisition, and any construction or rehabilitation work will be subject to federal regulations that can affect project costs and timelines.