Iowa House Bill HF2188

Iowa 2023-2024 Regular Session

• Introduced: 1/29/24
• Refer: 1/30/24

Caption

A bill for an act removing the maximum annual amount of real estate transfer tax receipts that may be transferred into the housing trust fund.(Formerly HSB 557; See HF 2634.)

Impact

The removal of the cap on RETT receipts has the potential to significantly increase funding for the HTF. This change could facilitate more substantial investments in affordable housing projects, which are essential given the growing demand for housing assistance among low-income residents in Iowa. The financial support could enable new housing initiatives and help maintain existing affordable units, thereby addressing critical housing shortages and improving living conditions for vulnerable populations.

Summary

House File 2188 seeks to amend the existing legislative framework governing the real estate transfer tax (RETT) receipts in Iowa. Specifically, it proposes to eliminate the annual cap of $7 million on the amount that may be transferred from these tax receipts into the housing trust fund (HTF). The HTF was established to promote the development and preservation of affordable housing options for low-income individuals, as well as to support the Iowa mortgage help initiative. By removing the cap, the bill aims to enhance financing for these crucial programs, thereby positively impacting housing availability and affordability across the state.

Contention

While proponents of HF2188 argue that eliminating the cap will foster more robust support for affordable housing, there may be concerns regarding the fiscal implications of increased allocations to the HTF. Critics might express apprehension about the reliance on RETT revenues and whether such funding can effectively meet the housing needs without affecting other budget priorities. As the bill moves through legislative channels, discussions may emerge around the balance between funding housing initiatives and ensuring adequate state revenue for other essential services.