Study Explores Shortage of Affordable Housing in Iowa City

A study by the University of Iowa Public Policy Center Housing and Land Use program explores the growing shortage of affordable housing in Iowa City and highlights the need to involve the private sector, in partnership with public and nonprofit agencies to create more affordable rental and homeownership opportunities.

The core problem is that the cost of housing is rising faster than incomes. More homeowners and especially renters are paying more than 30% of their income on housing, a level widely considered unaffordable.  In Iowa City, a single mother with children may struggle to find a home for her family when the fair market rate for a two-bedroom apartment is $853 a month.  The income needed to afford such an apartment is $34,120, which translates into two full-time jobs at the minimum wage.

High-cost housing can lead to mental and physical problems and impaired achievement at work or school, because homeowners or renters have less money to spend on nutritious food, safe transportation and child or health care. Lower-income families live in more crowded and unstable conditions, and more end up homeless.

Existing zoning and other regulations as well as market dynamics make it difficult to develop new affordable housing in Iowa City.  Iowa City’s Annual Action Plan advocates increasing the amount of land zoned for multi-family housing, but most of the land currently zoned as such is either too expensive or is not zoned to an adequate density.

Federal funds for affordable housing continue to decline.  While charitable donations also support affordable housing, philanthropic funding is not enough to make up for federal shortfalls.

The study concludes that inclusionary zoning, in conjunction with other incentives for affordable housing, could:
• Increase the quality and availability of a diversified and dependable work force to strengthen the local economy;
• Enhance racial and economic integration, resulting in improved schools, deceased crime, and reduced poverty;
• Reduce transportation expenses and pollution caused by development far from the urban core;
• Harness the power of the marketplace to produce affordable housing and apartments without significant outlays of increasingly scarce public subsidies or new local taxes;
• Improve the quality of affordable rental housing; and
• Offer predictability and a level playing field to developers, because every developer is subject to the same policy and procedures.

To read the full report, click here.