Iowa City was awarded a $3.75 million grant to expand affordable housing efforts from the U.S. Department of Housing and Urban Development’s Pathways to Removing Obstacles to Housing grant on Wednesday. 

The grant will be used to identify and remove barriers to affordable housing production and the preservation of affordable housing units. The grant comes as Iowa City and other Johnson County communities grapple with a need for affordable housing or housing that costs less than 30 percent of the household’s income. 

More than half of Iowa City renters spend more than 30 percent of their income on housing costs and more than 20 percent of homeowners spend more than 30 percent of their income on housing, according to Housing and Urban Development data. 

Iowa City Mayor Bruce Teague said the city council has been “laser-focused” on solving affordable housing issues in the community. The council has moved to change housing and zoning codes to support affordable housing development, including allowing accessory dwelling units or “mother-in-law suites” in city code. 

“The need for affordable housing has been on the mind of Iowa City for a long time,” Teague said during a news conference at Iowa City City Hall on Thursday. “And our community’s strong economic base and high quality of life attracts many residents to this region. But our housing supply has not kept up with the rising demand. As a result, we have a laser focus on this council to ensure that people can get the housing that they need at the prices they can afford.” 

The grant can be used to create affordable housing plans, commission studies on zoning codes, and incentivize the creation of affordable housing. 

HUD Assistant Secretary of Administration Elizabeth de León Bhargava said the PRO-Housing grant is aimed at beginning to fill the gap in affordable housing stock in the U.S. by empowering community-based solutions. 

Studies show there are 4-7 million housing units needed in the U.S. to fill current needs, and President Joe Biden’s administration’s goal for housing unit creation is set at 2 million. 

“Nationwide, there was a need for more housing, especially affordable housing for working families,” Bhargava said in a press conference on Thursday. “Since day one, the Biden-Harris administration has made investing in our communities a priority. For over a decade, the housing supply has not kept pace with housing demand. And communities across our country have experienced the effects of this firsthand.”

HUD awarded $85 million to 21 applicants in the first round of grant awards on Wednesday, with another round of funding coming later this year. 

“The Biden-Harris administration is tackling this challenge by investing historic levels of funding for housing, infrastructure, and economic development,”  Bhargava said. “Today’s announcement builds upon actions taken through the Biden-Harris administration’s housing supply action plan to boost housing supply and lower costs for families in short efforts to develop and build resilient and sustainable communities.”