Habitat for Humanity townhomes in Waukee get state funding needed to move forward

An affordable housing project led by Greater Des Moines Habitat for Humanity that would bring 48 townhomes to Waukee has received the state funding needed to move forward.

The Iowa Economic Development Authority announced Tuesday that 62 housing projects in the state would together receive more than $37 million in workforce housing tax credits. Greater Des Moines Habitat for Humanity received $720,000 in workforce housing tax credits for the Walnut Crossing affordable housing development to be built northwest of the intersection of North Warrior Lane and Northwest Douglas Parkway.

The property on both sides of Northwest Douglas Parkway that the city has been trying to develop into affordable housing is about 13.6 acres in total. Habitat for Humanity will be developing about 5.9 acres north of the parkway for Walnut Crossing.

Danny Akright, spokesperson for Habitat, told the Des Moines Register on Wednesday that the project is currently in the design and approval stage. Renderings that are available online will probably change and there's not a specific timeline for the project beyond construction expected to start in 2025.

However, Akright said Habitat plans to still build most of the townhomes with three bedrooms, while some units will have more.

Greater Des Moines Habitat for Humanity CEO Lance Henning told the Register in May that the townhomes would be 1,100- to 1,300 square-feet. Some would be single-story while others would be two-story. And he said the standard units will have three bedrooms and two bathrooms, but there will be some four-bedroom options as well.

Habitat's website for the project noted some townhomes may have as many as five bedrooms.

Who would be able to buy a Habitat townhome in Walnut Crossing?

Waukee assistant city administrator Nick Osborne said in May that sale of Habitat's townhomes would be restricted to buyers who make 80% or less of the area median income, which in 2024 is $63,300 a year for a single person or $90,400 a year for a family of four, according to the U.S. Department of Housing and Urban Development . Buyers still will contribute what the nonprofit calls "sweat equity" to help build their home.

Habitat also would have a period of exclusivity for buyers with ties to Waukee, such as families with students in the Waukee Community School District or employees of businesses in the suburb. Osborne said Habitat would be required to keep the income limitations for at least 21 years.

Habitat's website for the project says that townhome buyers will pay no more than 30% of their monthly income on their mortgage.

What are the next steps for the project?

Osborne told the Register in an email on Tuesday that once Habitat completes the planning and zoning process, the city will sell the 5.9-acre property to the organization for $1 within 60 days.

Waukee City Council approved in May the plan to sell the land to Habitat. The nonprofit also will get $500,000 in tax increment financing for the development.

That left a $720,000 funding gap that's now been covered by the state's award.

According to the development agreement with the city, Habitat must construct at least 12 townhomes by the end of July 2026. All 48 townhomes would be due by the end of July 2028.

Osborne said it's a condition of the workforce housing tax credits that all of the units must be complete within three years.

Uncertainty remains for proposed development across the street

Habitat's Walnut Crossing was born out of the initial failure of a proposal for Wisconsin-based Northpointe Development to build two 64-unit townhome complexes , one on each side of Douglas Parkway.

That development agreement between Northpointe and Waukee was rescinded in 2023 because the city did not receive a competitive, 9% low-income tax credit from the Iowa Finance Authority needed to fill a funding gap.

Waukee City Council in March approved new plans with Northpointe for the developer to buy about 6 ½ acres in the parcel south of Douglas Parkway for $1 and build 46 rental townhomes. Tentative plans also called for 14 additional owner-occupied townhomes in the southern parcel to be built by a third party.

But those plans depended on receipt of low-income housing tax credits, and Osborne told the Register the Iowa Finance Authority announced a few weeks ago that was not going to happen.

"Northpointe had some questions about the project scoring and asked IFA to clarify," Osborne said. "When that information comes in, city staff intends to present that and other alternatives to our city council so they can give us direction on which strategy to pursue."

He said the city's agreements with Northpointe were structured to dissolve if the company did not receive the low-income housing tax credits.

Editor's note: This story has been updated to correct how many acres Habitat for Humanity will develop.

Phillip Sitter covers the western suburbs for the Des Moines Register. Phillip can be reached via email at psitter@gannett.com or on X at @pslifeisabeauty.

This article originally appeared on Des Moines Register: Habitat for Humanity townhomes in Waukee get state funding needed to move forward