SIOUX CENTER—The Sioux Center City Council heard during its Monday, July 1, meeting about a possible plan that could be used to encourage the construction of multifamily housing.
The presentation of the plan was strictly informational to get feedback from the city council.
Called the urban revitalization plan, this type of plan would first have the city of Sioux Center establish and designate an area within the city limits to be included in this plan, explained Sioux Center economic development director Dennis Dokter.
Then, within the designated area, the city council can formulate a plan by which property taxes can be abated at a rate and for a period of time they’d determine. The maximum they could approve would be a 100 percent tax abatement for 10 years, or it could be anything less than that, according to Dokter.
The tax abatement incentives would be for the construction of buildings with at least three units.
There are some technicalities on whether or not a town house or condo would qualify under these sorts of plan under Iowa law.
“Our understanding is that this is more for rental apartments and complexes, that it’s there for multi-residential units,” Sioux Center city manager Scott Wynja said.
The city cannot incentivize building complexes with more units in them, Wynja confirmed: “The way the Iowa code reads, if you establish a designated area, any unit that’s three or more would qualify for that plan. So, if we try to offer a bigger incentive if they build a 24-unit complex, we can’t do that.”
The incentives in place would be the same for all complexes, regardless of the number of units it contains, so long as it has at least three units.
This plan is still in its earliest stages, with Dokter presenting the idea to the city council to see if there’s enough interest to continue forward with it.
Dokter said that other communities in the area have utilized this method to promote construction of multifamily buildings.
“It’s something that we see a need for in our community,” Dokter said. “We would like to spur some more multifamily growth in our community, and as we’ve talked with local developers or those interested in doing something like this, one of their hurdles are the financial aspects of putting a complex up and making it cash-flow. This would be a tool we could use to help promote that a bit.”
Wynja agreed, adding, “As the community continues to grow, we’ve done pretty well in the single family arena. The phrase here we use is that the city is a facilitator of growth, with residential growth certainly high on the priority list.”
He said that they’re hearing a need for these kinds of alternate forms of housing.
“For someone moving in here, they maybe don’t want to buy a home right away, so they’re looking for an apartment or a rental unit,” Wynja said. “One area we’re limited on is the multifamily or apartment complexes. We probably see ourselves falling a bit behind there.”
Wynja added that neighboring communities have offered between seven and 10 years of full tax abatements.
As Sioux Center mayor David Krahling put it, this plan could be an aggressive one if they wanted it to, but, as he observed near the end the discussion, he wasn’t hearing much interest in going with a plan for 10 years of 100 percent property tax abatement.
Krahling did ask one question during the discussion: “Are we training people to not do anything unless there are (incentives)?”
He did receive some agreement from council members.
In a follow up interview, Wynja said there has already been communication with other communities about how they’ve handled this.
He added that the city will need to get in touch with legal sources to have their insight and advice on going through with such a plan should the council pursue it.
There will be a lot of researching involved before something can be brought forward to the city council. The idea is to come back to the city council in a future meeting with a better understanding of their options going forward.