March 28, 2024

What is low income housing?

City trying to break away from stereotype

A discussion on potential uses for the former Seed Store property led to an education on what low income housing means by the city council during a recent meeting.

As the city has tried to move forward on housing projects that fall in the low to moderate income, public backlash has been voiced over bringing “that type” of housing to downtown Newton.

“The title is a hot button topic,” city administrator Bob Knabel said. “There is a real difference between Section 8 housing — a real federal subsidy program paying for or covering the rent — versus tax credits through a low to moderate income program that allow, under certain guidelines such as the size of family and income, established rents.”

Low income tax credits are often used by developers to subsidize costs for large projects. In 2015, the Iowa Finance Authority allocated more than $7.8 million in tax credits to projects throughout the state.

“What is unfortunate is that these tax credits are named by the government entity that issues them,” mayor Mike Hansen said. “They call this program that, we can’t change it. It really doesn’t identify what the program is all about and it gives it that bad connotation that we trying to bring in not the best clientele to those building, which is not the case.”

Councilwoman Evelyn George agreed and explained when she first heard the term low income, she felt the same fears that citizens often express. Then, during the negotiations with Hubbell Realty for the former Maytag Headquarters property last year, George had the opportunity to visit a Hubbell property in downtown Des Moines that fell in the low to moderate income housing.

“I had an education,” George said. “We are truly talking about housing for employees at all of our major employers, the school, the hospital, Hy-Vee, Trinity. They are entry, beginning level jobs for a lot of people, whether they are college or high school grads, tech grads, they are getting started.”

According to guidelines used by Hubbell in 2014, low to moderate incomes had wage requirements geared toward people with incomes in the 60 percent area of the median which is approximately $26,100 per year for a single person. That amount increases to $37,260 for a four-person household.

Not including utilities, the projected rent would range from $515 to $604 for a one bedroom and $575 to $723 for a two bedroom apartment.

George also said one of big differences with low income housing is all of the residents pay their own rent and utilities.

“That is the key, it is not paid for or subsidized by the government,” George said.

As the city continues to move forward with plans for the former Seed Store property and other potential development properties, the council will continue to try to break down the stereotype that comes with low income housing label to bring more affordable housing to young or new professionals looking for homes in Newton.

Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or jpierson@newtondailynews.com