On Tuesday night the City Council established an urban renewal plan that will fund affordable housing.

On Tuesday night, the Iowa City City Council established the final step in a urban-renewal plan that covers the Foster Road extension between Dubuque Street and Prairie du Chien Road. The plan will establish the space as an economic-development area.

The developments will be related to non-low- to moderate-income housing. Because of this, 45 percent of the tax-increment financing (TIF) will go toward affordable housing.

A TIF is a public financing method used for community-improvement projects. The estimated TIF approved for this project is around $4.6 million over 10 years. This requires at least 45 percent of this funding, around $2 million, be allocated to affordable housing.

City Manager Geoff Fruin said the city will take the $2 million to invest in projects that have longer affordability periods.

“With this approach, we are generating more value out of it from the public-infrastructure standpoint,” Fruin said. “It will also help the neighborhood and greater region.”

Because the plan includes a senior-resident facility and around 50 market-priced townhouses, Councilor Mazahir Salih urged for more low-moderate-income housing in the new renewal plan.

“We are still dividing the community by making people live in certain areas,” Salih said. “I want to see actual affordable housing in this area.”

Councilors Pauline Taylor and Kingsley Botchway reassured Salih and other community members by saying that the city is still moving forward.

“It may seem like baby steps,” Taylor said. “But it is progress.”

The hearing on Tuesday night was just to establish the renewal plan; more action will be provided by the city in future work sessions.

— Maria Kuiper