Iowa City is one of 21 communities to receive HUD's multi-million dollar affordable housing grant

Iowa City has received a multi-million dollar grant that officials say will facilitate additional affordable housing, aid prospective homebuyers and lower construction barriers.

The $3.75 million grant comes from the U.S. Department of Housing and Urban Development's Pathways to Removing Obstacles to Housing program, also known as PRO. Iowa City is one of 21 communities nationwide — and one of just three in the Midwest — to receive funding from HUD's $85 million program.

"The need for affordable housing has been on the mind of Iowa City for a long time," Iowa City Mayor Bruce Teague said during a press conference on June 27. "And our community's strong economic base and high quality of life attracts many residents to this region. But our housing supply has not kept up with the rise of demand."

Teague said the grant will allow the city council to be "well-positioned" to continue its affordable housing efforts.

Milwaukee, Wisconsin, and the Twin Cities of Minneapolis and Saint Paul, Minnesota, were the other two Midwest cities to receive grant money from this program. Iowa City was also the third smallest city by population to receive money from the PRO program, with awards going to Los Angeles County, California, New York, New York, Seattle, Washington, and Philadelphia, Pennsylvania, among others.

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Grant money will benefit local housing authority

HUD Assistant Secretary of Administration Elizabeth de León Bhargava delivered the check to Iowa City Mayor Bruce Teague on Thursday, June 27 echoing the mayor's praise for staff and the city, saying its application "stood out."

This grant will "boost housing supply, lower costs for families, ensure equitable development and build resilience and sustainable ways," de León Bhargava said.

Bhargava said a December 2022 law generated the $85 million, and another $100 million with similar goals will be available in the near future.

The nearly $4 million grant will be given to the Iowa City Housing Authority, which helps individuals and families throughout Johnson County and parts of surrounding counties find a place to live at an affordable price. However, this particular pool of money is only authorized for use within Iowa City city limits.

In the past, Iowa City has funded projects like the South District Investment Partnership Program, which purchases and rehabilitates duplexes with the help of local contractors, then resells the homes to low-income, prospective buyers.

More: Iowa City is working to help low-income families become homeowners. Here's how.

Housing authority experiencing influx of interest

The local housing authority recently stopped accepting applications for its Housing Choice Voucher Program, better known as Section 8, after the estimated wait for the program swelled beyond four years. In June, Housing Authority officials told the Press-Citizen that more than 1,900 "priority applicants," those already living or working in the area, are on that list.

The $3.75 million grant allows the housing authority to boost the city's offerings while also supporting its residents.

"The funding will empower us to expand our efforts and accelerate our plans to identify and remove barriers to affordable housing production and preservation," Teague said. "By carrying out activities highlighted by HUD, we are not only enhancing this quality of life for our residents but we're also being a showcase for anyone (in a) small or large community within the Midwest."

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Ryan Hansen covers local government and crime for the Press-Citizen. He can be reached at [email protected] or on X, formerly known as Twitter, @ryanhansen01.

This article originally appeared on Iowa City Press-Citizen: Iowa City awarded $3.75 million affordable housing grant from HUD