Under an updated urban renewal plan approved this week, the City of Des Moines will extend tax incentives to housing options that typically cost less for residents while incrementally adding density to neighborhoods and supporting the city’s tax base.
The plan creates a new declining tax abatement schedule for 8 years (9 years for properties with enhanced sustainability features) for “missing middle” housing that contains between 2 and 12 dwelling units. It also enhances tax incentives available for accessory housing units.
Missing middle housing describes a range of building types including smaller apartment buildings or townhouse developments that used to be common in neighborhoods but are rarer in today’s environment of large suburban single family homes and apartment complexes.
Photos: Missing middle housing can take many different formats as these examples from the Pacific Northwest show. Options range from a duplex to small apartment buildings, townhomes, and more. Images via the Sightline Institute, licensed via Creative Commons.
The more modest floor plans missing middle housing provides can make it a lower cost housing choice. The scale of missing middle housing fits nicely within predominantly single family neighborhoods, where neighbors expect new development to match the existing building style.
The tax incentives included in the City’s plan will help incentivize housing that is well-positioned to be more affordable for households with incomes under $75,000/year who are looking to buy.
This will expand housing choices for people whose wages make attaining homeownership difficult in today’s market. In fact, Des Moines cited the workforce housing study Here We Grow is based upon as part of its rationale for the new policy.
Deputy director of development services Michael Ludwig said Des Moines’ action follows years of discussion about seeking ways to add more housing that matches the style of a neighborhood.
“We know we need a greater variety of housing options and housing types in the city to have a strong housing market - a market that has a range of prices in it so that hopefully people can move up within the city without moving out,” Ludwig said.
In addition, local housing advocates like the Polk County Housing Trust Fund have long endorsed missing middle housing as an option to provide more housing at lower costs.
The plan also enhances tax incentives available to accessory housing units (AHUs) that allow homeowners to construct a second housing unit on their property. Housing choices within neighborhoods play an important role as people seek to remain in communities they love through different phases of their lives. Accessory housing units seek to address that challenge, said Brad Anderson, state director of the AARP in Iowa.
During the pandemic, he saw a spike in families interested in providing an independent living for aging loved ones adjacent to their family’s homes.
“AHUs are quickly becoming a popular affordable housing option for families who want to stay close to loved ones or provide alternative options for long-term care,” Anderson said.
AARP has prepared a resource guide for local homeowners interested in AHUs. Anderson noted that AHUs also bolster the city’s supply of more affordable housing and can be an income source for homeowners who add a rental unit to their properties.
Ludwig says for cities, supporting these new housing units also makes sense because it allows more housing value to be added in a community with less land, ultimately supporting sustainable funding for city services.
“Land is a primary cost and infrastructure is a primary cost that goes into housing affordability, and if you can get two units on a property with existing infrastructure, there are economies of scale in adding that density incrementally to an existing neighborhood,” Ludwig said.
Note: AHUs are also often called Accessory Dwelling Units or ADUs. This blog post follows the lead of the policy Des Moines passed, which uses the AHU name.
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