(Radio Iowa) – The owners of apartment and condo buildings are urging the Iowa House to reject a Senate plan that would raise taxes on their properties. Multi-family properties are currently taxed as residential property, but the Senate’s plan creates a new classification for apartments, condos and assisted living facilities — with a higher tax rate. Kyle Gamble, president and C-E-O of Hubbell Realty, says it will lead to rent increases for at least 30 percent of Iowa residents who rent their housing.
“We estimate this proposal could increase rents by approximately $200 a month for many residents across the state of Iowa,” Gamble said. Gamble spoke at a public hearing at the statehouse this (Tuesday) morning. A spokesman for community colleges told lawmakers a higher property tax rate for apartments will have a big impact on college students. Kyle Vogel, who owns a condo in Iowa City that he rents, is a spokesman for the Greater Iowa City Apartment Association.
“The overwhelming majority of our members are local ‘mom and pop’ property owners who have single-family duplex properties in and around Johnson County. This legislation will mean drastic increased property tax costs for these individuals,” Vogel said. “…We’re sure hopeful that all of you will consider the negative impacts from these proposed changes and move forward with reform that does not put their cost burden on property owners and tenants statewide.”
Other developers told lawmakers it will be harder to get loans to build apartments if the tax burden on those properties is higher. Tony Jacobson spoke on behalf of Landlords of Iowa, which represents 800 landlords, as well as his local chapter in Fort Dodge. “When the cost of operating rental housing rises landlords are forced to adjust their rents simply just to keep the properties insured, maintained and financially viable,” Jacobson said. “This means the very Iowans who are least able to absorb the costs like working families, seniors on fixed incomes and individuals with limited housing options end up paying this cost.”
Debbie Fisher, a senior advisory at NewburyLiving, spoke on behalf of the Iowa Assisted Living Association. Fisher says the average age of residents in the nearly 500 certified assisted living communities in Iowa is 87. “We serve the most frail population of our elders,” Fisher said, “and it’s critical to prevent a shift in the tax burden for these essential apartment homes for our elders.”
Fisher says if taxes go up, rents will go up in assisted living communities and it will have a ripple effect. Older Iowans will stay in their single family homes longer and home buyers will have access to less inventory.
