Iola City Council members are throwing their support behind an effort to entice housing development in the north part of town.
Council members unanimously endorsed the first steps to creating a Rural Housing Incentive District covering what was a portion of the old Cedarbrook Golf Course.
A Rural Housing Incentive District (RHID) is a program geared to aid developers in towns with a proven need of affordable housing, explained Jonathon Goering of Thrive Allen County.
An RHID captures incremental increases in property taxes by a housing development for up to 25 years. The taxes may then be returned to the developer as reimbursement for infrastructure costs, or the money could be used to pay off debt service if the city issues bonds to pay for such infrastructure improvements.
Reimbursements can be used for such things as land acquisition costs, site preparation or utility infrastructure.
The impetus was a series of discussions between city officials and a developer who has expressed an interest in building homes for moderate-income residents in the Cedarbrook Addition.
A recent housing study already indicates the need for such housing, Goering noted, plus Iola’s population of less than 40,000 clears another barrier for RHID qualification.
City Administrator Matt Rehder noted that approving the RHID resolution does not bind the city to a particular developer.
“You’re not determining who’s gonna build houses,” Rehder said in response to a question from Councilman Carl Slaugh.
That said, it’s noteworthy that Iola has an interested developer, Mayor Steve French added.
“We have not had developers beating down our doors,” Goering agreed.
Without incentives, the cost to build homes in Iola is almost certain to exceed what moderate-income families could afford, French said.
If, or when, Iola receives the RHID designation — the city should know by January — the next step would be to apply for Moderate Income Housing (MIH) funds made available each year.
In response to a question from Councilwoman Kim Peterson, Goering noted the housing would not be targeted for low-income residents, but rather working class families.
For example, a single resident could qualify with an income of $90,000 or less, Goering noted. “That’s very much in line with our industries in town,” he said.
COUNCIL members approved the city’s $25 million budget for 2023, supported in part by one of the largest tax increases in recent memory.
