Des Moines reviews tax-abatement program ahead of housing strategy, cites low uptake for sustainability incentives
Loading...
Summary
Development Services staff reviewed the city's Urban Revitalization (tax-abatement) program: Des Moines offers a 10-year, 100% residential abatement and a suite of declining schedules; staff reported only about 23% of new single-family homes choose sustainability features (R20 walls + EV-ready circuit) that earn an extra abatement year and said further stakeholder engagement will follow ahead of Q1 2025 policy discussions.
Cody of the Development Services Department presented a review of Des Moines' Urban Revitalization Program (tax abatement), outlining current schedules, recent state-code changes and options for updating the plan as part of a forthcoming citywide housing strategy.
Cody said the city offers a widely used 10-year, 100% abatement schedule for improvements to residential property, and noted the state tax-code changes that now protect school-district levies from residential abatements and require a minimum-assessment agreement for commercial abatements. "The state then sets the code, sets the limits on what cities have to work within," Cody said while explaining the constraints local schedules must follow.
On sustainability incentives, Cody reported his evaluation found that only about "23% are choosing to install those additional features" (R20 exterior walls and an EV charging circuit/conduit) that earn an additional year of 100% abatement for new single-family construction. Cody and council members discussed EV-ready options: roughed-in conduit (a 40-amp circuit to the garage) or full installation; Cody said when the city analyzed the option in 2021, roughing in conduit "was a few $100," while council members reported full-installation costs in the low thousands in practice.
Cody described targeted schedules for new construction and the missing-middle schedule that has encouraged townhome construction. He also explained how many multifamily projects combine abatement with tax-increment financing and cautioned that minimum-assessment agreements for commercial schedules carry a lock-in risk for owners if a major disaster occurs while the schedule is active.
Staff presented program statistics: as of Jan. 1, 2023, the city had accumulated abated value and more than 9,000 residential dwelling units receiving some form of abatement across single-family, townhome and multifamily categories. Cody emphasized the plan must evolve with market conditions and recommended stakeholder outreach to builders and residents before bringing formal changes back to council. He said the city aims to pursue more detailed discussions in Q1 2025.
Council members raised questions about competitiveness with suburbs, the cost-effectiveness of sustainability incentives and potential trade-offs between stronger requirements and keeping Des Moines attractive for builders. Cody said staff will use the citywide housing strategy and further impact analysis to shape recommendations and will engage stakeholders during the next phase of work.
