$3.752 Million Grant Breaks Down Housing Barriers and Builds Up Business

Posted July 8, 2024

Iowa City is set to receive $3,752,000 in federal funds to remove barriers to housing for both homeowners and renters. On June 26, 2024, the U.S. Department of Housing and Urban Development announced that the City of Iowa City is one of just 21 recipients nationwide to receive grant funding through the Pathways to Removing Obstacles to Housing (PRO Housing) funding opportunity. PRO Housing provides grant funding to communities that have demonstrated prior progress in addressing local housing barriers, a consistent goal for Iowa City.


Through these funds, the City of Iowa City is positioned to not only relieve housing pressures and increase community well-being, but to boost a local resilient economy across all of Johnson County. With the implementation of these federal funds, area businesses can attract a robust workforce due to the availability of livable, affordable, and plausible homes for households of all incomes. This will also benefit small businesses. Decreasing the costs of housing for existing low- to moderate-income households will stimulate the local economy through increased disposable income. Small retailers, restaurants, and attractions will reap the benefits of a community that is not overly burdened with housing costs.


Although the funding will be used within Iowa City, its impact will be felt across Johnson County. Increasing the overall housing supply will alleviate the housing pressures and decelerate increasing housing prices throughout the entire area. The funding will also be used for a regional housing study, enabling the entire area to pinpoint exact shortfalls and highest priority needs in the greater Iowa City area. With the results from this study, our region can work to solve our housing complexities together.


Let’s zoom out to the issues and current programs in place. In Iowa City, 22% of homeowners and 61% of renters are paying more than 30% of their income on their housing payments, effectively making those groups housing cost burdened. Outlined by Iowa City in their PRO Housing grant application, and shown in HUD’s Iowa Housing Profile, the current and most pressing barriers to affordable housing in Iowa City are:

  • restrictive land use policies like parking regulations and zoning regulations
  • limited availability of housing options
  • dwindling capacity for local housing developments including affordable housing projects


To alleviate these issues, The City of Iowa City currently owns 102 affordable housing units and distributes 1,595 housing vouchers to residents. Further, Iowa City’s Neighborhood Services Division spent $15.6 million on services such as rental assistance or affordable housing creation and preservation. (Source: City of Iowa City). The additional $3.752 million PRO Housing funding plans will coincide with the City’s previous housing efforts stated above, and other prior efforts such as updating the City’s Affordable Housing Action Plan and amending the zoning code to expand housing supply.


Iowa City plans to use the PRO Housing funding on incentivizing the creation of affordable housing developments and updating its housing plans and land use policies. Actions will include creating a pilot affordable housing project, offering housing counseling assistance for low- and moderate-income households, creating a housing assistance program to address short-term barriers, and enabling the Iowa City Housing Authority to construct new, permanent affordable housing units for low- and moderate-income households. In addition to conducting a regional housing study, the city also has plans to update the City’s Comprehensive Plan.


Greater Iowa City, Inc. supports the use of these funds for the purposes outlined by the City of Iowa City. These programs and projects align with Pillar 2 of the All In Vision Plan created through Better Together 2030. This plan and the community members who participated in the planning process recognize that affordable housing is a foundational element to a thriving community and economy. This grant will strengthen both in the greater Iowa City area. Greater IC leads our community’s Pillar 2 work as a BT2030 partner. To stay updated on affordable housing programs throughout Johnson County, including rural areas, sign up for Greater IC newsletters here.


Photo credit: The Daily Iowan