Affordable Housing

Like many Iowa communities, Waukee faces a deficit in affordable housing for low-income residents. The City of Waukee decided to take a novel, proactive approach to address this critical need. The City purchased land specifically to build affordable housing. The development is part of the master plan for the neighborhood, so the units can be integrated among other types of housing, including access to trails and community amenities. Construction for the first phase of our project is underway! Greater Des Moines Habitat held a groundbreaking ceremony for Walnut Crossing townhomes on April 4, 2025.

What is affordable housing?

The U.S. Department of Housing and Urban Development (HUD) defines it as “housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities.” The need for affordable housing affects more people than you may think. Schoolteachers, firefighters or retail workers could be future homeowners or renters in this development.

Why is the City getting involved?

Our community needs a diverse workforce, with many types of skills. Residents want to have more retail, restaurant and entertainment options as well as other services businesses, including daycares. According to the U.S. Census Bureau, Waukee’s median home price is $305,300 (based on 2018-2022). In addition, many seniors need a home that works within their fixed income, but the waiting list for senior-friendly housing in Waukee is quite long. This project cannot address all needs, but it will add opportunities for people with ties to our community through the school or their job to be able to live in Waukee.

Why is this project special?

In addition to giving people an opportunity to own a home, this project is unique in a few ways. It is unusual for a city government to take the lead by buying land and seeking a developer to build new construction. Many other affordable housing developments are renovations of older, existing buildings and are led by housing trusts or other nonprofit organizations. Waukee is only the second city in Iowa to have a multi-family build with Habitat for Humanity, which traditionally has focused on single family homes.

What will it look like?
*Images are artist renderings. Final homes may differ.

The 13.5-acre site is near North Warrior Lane and Douglas Parkway. It will be divided into two phases. Phase 1 is called Walnut Crossing, which will be the parcel north of Douglas Parkway. It is expected to include 48 owner-occupied townhomes built by Habitat for Humanity of Greater Des Moines over three years. If they achieve all the funding targets, construction likely wouldn’t begin until 2025 at the earliest. A family of 4 with a total income of $83,440 or less can qualify to buy a townhome, which can both address housing needs and strengthen their future financial prosperity. When Habitat meets all the terms for the development agreement with the City, they’ll be able to purchase the 5.9 acres of land for phase 1 for $1.

When the townhomes are ready for sale, there will be a period of exclusivity for applicants with a tie to Waukee, such as children attending school within the Waukee Community School District or a job at a Waukee-based employer.

Phase 2 is the parcel south of Douglas Parkway. We are currently working on a new plan for this part of the development.

How is it being funded?

The entire development is estimated to cost about $51 million. For the first phase, Habitat was awarded $720,000 in Workforce Housing Tax Credits plus a $21,000 sales tax refund for a total tax credit of $741,000 from the State of Iowa in June 2024. Recent rule changes make this “greenfield” construction project eligible for the tax credit. In addition, Habitat will leverage private fundraising and pursue grants in addition to the revenue received from sales of the townhomes.

For the phase 2 portion, Northpointe Development was not awarded low-income housing tax credits for our original plan. This project narrowly missed the funding cut-off in 2023 and 2024. Intense competition for limited tax credit funding is a key challenge for affordable housing projects. The City is considering new directions for phase 2.

What challenges does this project face?

Funding math is the biggest challenge for affordable housing projects. The need is big and touches nearly every community, but funding sources are limited. This means there is intense competition for tax credits, grants and other funds. Labor and materials cost the same to build affordable housing as any other similar development, but the units need to sell or rent for less than market rate. This makes it challenging for developers to take on these projects, which makes tax credits, grants and donations critical to close that gap.

How will you keep it affordable?

The owner-occupied townhomes will come with restrictive covenants that maintain affordability. If an owner needs to sell within 21 years of purchasing the home, they must sell the home to a buyer in the same income bracket or give Habitat the option to purchase the home. Habitat would then resell the home to a qualifying buyer.