The Disaster Recovery component of the Workforce Housing Tax Incentive Program is designed to provide financial incentives for the development of housing in counties impacted by disasters in spring of 2019. Housing developers that are approved for benefits under the Workforce Housing Tax Incentive program can receive a state investment tax credit of up to 20% of the investment directly related to the construction or rehabilitation of the project. Developers can also receive a refund of the sales, service and use taxes paid during the project.
Housing projects must be located in a county that received a presidential disaster declaration on or after March 12, 2019 AND in which individuals are eligible for federal individual assistance.
A map showing these eligible counties can be found here: https://floods2019.iowa.gov/individuals.aspx
Iowa Code states ,“The housing business must also submit documentation that provides evidence that the qualified housing project is needed due to impact of the disaster that is the subject of the presidential major disaster declaration.” Projects MUSTdemonstrate the project is necessary due to the disaster resulting in a declaration on or after March 12, 2019. Projects merely located in an eligible county may not qualify for these tax credits.
Public Records Policies
The Iowa Economic Development Authority (IEDA) is subject to the Open Records law (Iowa Code Chapter 22). Treatment of information submitted the IEDA in an application is governed by the provisions of the Open Records law. All public records are available for public inspection.
Primary Program Requirements
An eligible housing project consists of one or more of the following:
- Rehabilitation, repair or redevelopment in a Brownfield or Grayfield site.
- New construction on a greenfield site.
- Rehabilitation, repair or redevelopment of dilapidated units.
- The rehabilitation, repair or redevelopment of dwelling units located in the upper story of an existing multi-use building.
Minimum Project Size
- Four or more single family dwelling units, or;
- Three or more multifamily dwelling units under a single roof, or;
- Two or more dwelling units located in the upper story of an existing multi-use building.
Average Dwelling Unit Cost Cap
The average dwelling unit cost cannot exceed $200,000 per unit OR $215,000 per unit if the project is located in one of the 88 least populous counties. The average dwelling unit cost may not exceed $250,000 per dwelling unit if the project meets the definitions outlined in Iowa Code 404A.1, subsection 2.
Projects must be completed within 3 years of approval from IEDA.
Completing Your Application
- All applications will be submitted through IowaGrants.gov.
- Applicants may request technical assistance from IEDA staff during the application development process.
- Within the narrative of the application, reference supporting documentation and explain its relevance.
- Costs incurred in the preparation of this application are NOT eligible or reimbursable.
- A supporting resolution from the local government entity must be submitted with the application. At minimum, the resolution must clearly identify the project and identify the source of local matching funds required for the project.
- All required attachments/ documentation must be submitted with the application to initiate review and approval.
Agreement and Fees
Approved applicants will enter into an agreement with IEDA for the successful completion of all program requirements. The compliance cost fees imposed in Iowa Code 15.330, subsection 12, apply to all agreements. These fees include:
- A one-time fee of $500 to be collected by IEDA prior to the issuance of a tax incentive certificate.
- A compliance cost fee equal to one-half of one percent (0.05%) of the value of tax incentives claimed pursuant to an agreement that has an aggregate tax incentive value of $100,000 or greater. This fee is collected from the housing business after the tax incentive is claimed from the Iowa Department of Revenue.
Important Note on Claiming the Sales and Use Tax Refund
- Iowa Code 15.331A requires the eligible housing business to notify the Department of Revenue in writing of intent to claim the sales tax refund for a Workforce Housing Tax Incentive project. The housing business must also make application to claim the sales and use tax refund within one year of project completion. Failure to meet both requirements will result in forfeiture of the project’s sales and use tax refund. IEDA will verify documentation at the end of the project, establish a project completion date, and notify the housing business through IowaGrants.gov.