City report: 2024 residential permits fall; analysis projects housing shortfall of about 1,419 units by 2030 if trends persist

Rachel Schaffer, associate planner for the City of Iowa City, presented the 2024 Residential Development Analysis to the Planning Commission and summarized recent permitting, platting and vacant-lot trends.

“In 2024, 145 units were permitted,” Schaffer said. She reported 11 dwelling units were demolished in 2024 and that total permitted units were well below 5- and 10-year averages, with multifamily permits at a decade low.

The nut of the analysis: using the Metropolitan Planning Organization’s population projection for the city and recent permit trends (2020–2024), the analysis concluded the city would produce roughly 3,120 new dwelling units by 2030 while projected demand would require about 4,610 units, leaving an estimated shortfall of roughly 1,419 units — about 68% of projected demand met if permitting rates do not increase.

Key data points Schaffer highlighted:

- Final plat activity was low in 2024: the city approved six final plats; most created small single-family infill lots. Four plats accounted for 13 single-family lots, and one large replat (the Western Homes 55+ development) accounted for the majority of the larger planned-unit development capacity cited in the presentation.

- Building permits: 145 units were permitted in 2024, a figure below the five- and ten-year averages; single-family detached permits slightly exceeded recent five-year trends, but multifamily permits were at a decade low and duplex/attached single-family permitting was minimal.

- Demolitions: 11 units were demolished in 2024 (down from five-year and ten-year averages of 34 and 39).

- Vacant lots and buildout timing: a methodological change in counting buildable vacant lots (removing a prior assumption that adjacent-owned outlots would always be sold together) increased the reported available lot supply. Based on current permits-per-year averages, Schaffer said the city’s vacant supply would take about 3 years to build out for single-family detached lots, 5.3 years for attached single-family lots, 7.6 years for duplex-sized lots and about 2 years for multifamily sites.

- Forecast: using the MPO projection of about 85,070 residents by 2030, the city calculated demand of roughly 4,610 new dwelling units and estimated that current permitting trends would yield about 3,120 units, producing the identified shortfall.

Schaffer and commissioners discussed causes and implications. Commissioners and staff observed multiple contributing factors beyond local land-use regulations: acquisition costs for land, fragmented ownership that can leave developable parcels land-banked, infrastructure extension costs, financing constraints for small developers, and developer preferences for neighboring communities where land or entitlement conditions are perceived as simpler. Staff noted some regulatory changes — reduced minimum lot sizes, ADU code changes and form-based allowances in certain new neighborhoods — are intended to expand housing options but may take time to affect permitting and construction.

Commissioners asked follow-up questions about specific sites (Carson Farm, a large undeveloped area where annexation was previously withdrawn), the Western Homes plat, and whether duplex and ADU permit changes are producing immediate results. Schaffer said recent regulatory changes had not yet produced a marked increase in permits, and that some outcomes will appear with more time and as final plats and building permits progress.

The analysis warned that insufficient new housing in Iowa City can push growth to surrounding cities such as North Liberty and Tiffin, increasing commuter distances and car dependence and undermining local environmental and affordability goals. Schaffer said the report will inform both the comprehensive-plan update and council discussions about infrastructure and housing strategy.