Sioux Center City Council looks toward additional housing

Additional housing in Sioux Center was the focus the Sioux Center City Council conversation this week.

The council approved official support for a developer’s application for state tax credits to help add a multi-family area in northeastern Sioux Center. Community Development Director Lucas Heiberger shared that the developer, Axis Capital, is considering creating a 32-unit multi-family development.

“We’ve identified an area in Country View North as the spot for this. It’s a place we’ve planned for future multi-family housing,” Heiberger said of the proposed project. “There’s good access with the 11th Ave. NE connecting to 20th St. NE now.”

The council’s resolution of support will be part of Axis Capital’s application considered by the state for the Workforce Housing Tax Credit. More than 5 residential projects in Sioux Center have previously received this incentive, which offers a state tax credit for a percentage of the investment.

Also this week, the council indicated interest in extending a local tax incentive program for multi-family developments to keep it consistent after a state legislation change. In 2019, the council created a local Urban Revitalization Plan for multi-family housing. This plan offers a five-year sliding tax abatement for developers building or redeveloping multi-family housing with three or more units, reducing the property tax burden on them in those 5 years. Recently, the state ruled this tax abatement could no longer include the property taxes paid to the school district. Previously it included property taxes paid to the school district, city, county, and community college.

“The school’s portion is around 50%, so we as staff are suggesting moving our plan from a five-year to a 10-year tax abatement to keep it at a similar amount of dollars,” Heiberger said.

“In our strategic planning, we have talked about housing being a top priority for us,” said City Manager Scott Wynja, adding that the council needs to take action at a future meeting to make the change official. “To stay basically at the same dollar amount at the end of the day by going to the 10 year makes sense.”

For a developer to receive this tax abatement, it must go through a council approval process. Councilmember Jennifer Vermeer noted that developers have used this incentive multiple times to add multi-family housing in Sioux Center.

“We’ve seen a good increase since 2019 in those multi-unit developments,” she said. “This policy has been really good for our community, making a significant impact on housing availability and providing much-needed options for our residents.”