Housing: A New Priority For Economic Development Groups?

4 Steps to Consider Before Taking the Plunge

As IDM works with economic development groups across the state, the concerns about housing continue to escalate. Housing for workforce, rental housing, improved housing, new housing, senior housing… the needs are overwhelming. As housing issues impact business location decisions and the availability of workforce for new and existing businesses, more and more economic development organizations are getting involved in housing. How deeply involved varies by organization. Before diving in, consider these four steps to help you determine the role your organization might play in housing and what might work for your economic development group.

Step One: Know your issues. Do you and your stakeholders really know your county or city’s housing problems and/or needs? Often this first step will be the completion of a housing study or needs assessment. This can be a reality check, a step to confirm or deny everyone’s “suspicions.” A study or assessment will provide relevant data – for grant applications, developers and stakeholders. It will describe your current housing situation and identify your strengths and challenges – what you can build on and/or what needs to be fixed. A study or assessment can map out issues to determine what/where resources/efforts should be focused and where new infill or open space development makes sense. Finally, a good study or assessment will help develop consensus among community stakeholders and identify specific priorities in housing and suggest actions to address them.

Step Two: Determine your role: Advocate, Liaison or Developer? Consider whether other entities or organizations are working within your community, county or region on the types of housing issues and needs identified in your housing assessment. Understand where development gaps remain. Think about your organization’s capacity and scope of influence. Organizations with limited staff time and budgets may only wish to dip their toes into the housing waters as an advocate for housing improvement efforts in their community or county. The advocate supports the idea of housing projects within the community by serving on housing committees; offering public endorsements for city or county decisions related to incentives and zoning changes as needed to promote housing; and providing letters of support for grant applications submitted by the city, county or local housing agencies.

Organizations with a little more capacity may consider wading further into the waters and taking on the role of liaison. The liaison can be a one-stop resource for developers, builders, city and county governments and others with housing interests by collecting and maintaining a comprehensive list of available housing programs, sites and incentives. There are numerous local, state and federal resources that can be used or developed depending on the needs of the community. Programs are available to help individuals, governments and developers (both private and nonprofit). As a liaison, it is important to know about and educate community leaders, developers, realtors and financial institutions about these programs. In some cases, you may have the capacity to write grant proposals, assist with the administration of programs and/or fulfill reporting requirements. Economic development groups can also help local governments develop incentive programs to promote community housing improvements. From tax abatement to infrastructure – there are many incentives that local governments may set in place to support new development and encourage rehabilitation of existing housing. In the liaison role, you know about the available resources and connect the necessary stakeholders.

Some organizations may have the capacity to swim into the deep end and become housing developers themselves. Partnerships are key in the role of developer. Knowing and getting the support of local bankers, investors and realtors will be necessary for success. You will also need to find a contractor or builder willing to work in your community – in some Iowa communities, this is easier said than done! If housing development is to become a large part of your organization’s work, you may want to take an even deeper dive and look into becoming a HUD-designated Community Housing Development Organization (CHDO). At least 15% of HOME Investment Partnerships Program (HOME) funds are set aside for CHDOs. To use the set-aside funds, a CHDO must be the owner, developer or sponsor of an eligible project, which includes the purchase, rehab and/or construction of housing (rental or homebuyer properties) as well as direct financial assistance to purchasers of HOME-assisted housing developed by the CHDO. A word of caution – a CHDO is not a good fit for a one-person operation! (Learn more about CHDOs here: https://www.hudexchange.info/home/topics/chdo/)

Step Three: Identify helpful partners and programs. After you’ve considered your organization’s role, it becomes clear that knowledge and partnerships are the foundation for any role you decide to play in housing. Partners from all aspects of community development will be critical to engage:

Local Community Development Organizations (CDOs) that work to house people (elderly, low income, etc.) or develop/rehabilitate housing for targeted populations (Community Action Agencies, Local Housing Trust Funds, etc.)
Local Resource Providers that write grant proposals and administer housing programs
Financial Institutions
Real Estate Agents
Contractors/developers/builders
Government stakeholders at all levels
Employers
Schools and colleges

For links to programs that offer incentives or assistance to people, developers and governments in Iowa, CLICK HERE.

Step Four: Seek out best practices. You won’t need to reinvent the wheel. Great things are happening throughout the state. Many cities and counties have already identified incentives and programs that might fit your needs. CLICK HERE for links to some great ideas for incentives and housing development projects from Iowa communities.