Story County supervisors consider using TIF revenue to fund housing assistance; tight Dec. 1 deadline prompts rapid plan amendment

Story County Board of Supervisors members on Oct. 3 discussed using tax-increment financing (TIF) to support housing and directed staff to prepare a draft urban renewal plan amendment and related documents ahead of an Oct. 14 consultation and a Nov. 4 public hearing, after hearing that a Dec. 1 certification deadline affects fiscal-year 2027 TIF availability.

John Danos, a lawyer with Dorsey & Whitney in Des Moines who serves as bond counsel on county matters, told the board that Iowa's urban renewal statute (Iowa Code chapter 403) sets distinct rules when counties use TIF to support housing. "What we have in terms of TIF law, chapter 403 of the Iowa code is our state's urban renewal law," Danos said, and he summarized three key constraints that apply when TIF supports market-rate housing.

Those three constraints, as Danos described them, are: (1) TIF can pay only for public improvements related to the housing project (streets, water, sewer, sidewalks, stormwater and other publicly held assets), not private construction costs such as home foundations or roofing; (2) while economic-development TIF districts commonly have 20-year collection windows, parcels that contribute TIF to market-rate housing projects are limited to an 11-year collection period for that parcel; and (3) if TIF is used to support market-rate housing infrastructure, the county must create an LMI set-aside equal to the county's LMI percentage applied to the TIF amount (Danos used an example: $1 million of TIF…