The number of new housing units Oskaloosa will need by 2025

According to a 2017 Housing Needs study by Maxfield Research & Consulting

0 %

of Oskaloosa’s workforce travels greater than 50 miles to work, nearly twice the national average

As with most rural communities, housing is a top concern for the future of Oskaloosa. Challenges include blighted and abandoned homes, as well as lack of; modern apartments, 2nd story downtown units, single family mid-range homes, and active adult and senior options.  

A 2017 Housing Needs study by Maxfield Research & Consulting projected that Oskaloosa is in need of over 640 new housing units by 2025. Additionally, representatives from the largest employers in the Oskaloosa Market Area were surveyed finding that while 42% of workers currently reside w/in 10 mile radius of employment, 23% travel greater than 50 miles to get to work, almost twice the national average according to the Census’s American Community Survey.  

The survey noted that employers felt that a lack of quality rental housing is directly impacting their recruitment and retention efforts. New employees cannot find quality rental units, or housing with desired amenities that today’s tenants are looking for leading to long distance commuters, accepting less desirable housing or taking a job elsewhere. 

This is problematic both for local businesses as the local economy when workers do not have the option to live, work and play locally.  

The Cost Gap 

The problem lays in the cost gap; the cost to build does not equal the cost to sell or rent. Because of this, property owners and developers must charge a high amount to recoup costs. That leaves consumers with the choice to buy or rent an older home that needs significant work, be cost burdened by choosing a more expensive modern home or living in another community.  

This challenge combined with the fact that it is easier and more economical to build in urban metros and a developer will normally need to pull in sub-contractors from metro areas, this compounds the housing shortage. However, good paying jobs exist in Oskaloosa and the quality of life is strong. We can build upon this to lure in developers, but we need to incentivize them.  

While there has been some progress and Oskaloosa has many existing packages and programs that can provide benefits, a consolidated plan and new incentives are needed urgently to attract developers and spur housing development immediately.   

Single family homes

For a 3 BR house to be sold for under $180,000: In order to create new, in-fill lot housing, developers are short an average of $25,000* per housing unit.  

Estimate 65% = 114 Infill lots  

  • Need $25,000 per infill lot to fill the cost gap
    = $2.85M total need for infill  

The average shortage for new lot development without utilities is $60,000*.  

Estimate 35% = 61 – No infill  

  • Need $60k – per to fill the cost gap  
  • $3.6M – total needed for non-infill  

*This number can drop if the land is donated and/or owned by the municipality. 

Total needed to fill cost gap for single family homes: $6.51 million 


Infill Lots


Per Lot

$ 0 M




Per Lot

$ 0 M
Preliminary Apartment Concept

The Elks lodge leadership has expressed interest in selling their current building at 202 2nd Ave East so they may find a more accessible location for their members. The Elks building is one block from the square and would be a perfect location for a downtown apartment complex. The existing building could be redeveloped; however, the roof has experienced significant damage and the third floor is currently unusable. A structural integrity evaluation would be needed to determine if the existing building is useable. If a new development complex would be desired, the McClure Land Development team has created a concept for a 24 unit, three-story complex with 42 parking stalls when combined with the city’s property adjacent. 



The average shortage for a new multi-unit complex is $400k each.
Estimate: 6 complexes of 12 units each  

To get rents to be:
1 BR $690/ mo or less
2 BR $1,000 /mo or less 

Total needed to fill cost gap for apartments:

$ 0 M

*This number can drop if the land is donated and/or owned by the municipality. 

Total to fill cost gap for both SFH & Apartments:

$ 0 M
Revolving Loan Fund Infographic


The fund is meant to be a revolving loan fund, meaning that it will perpetually put dollars back into the fund as it grows. The fund is also meant to sunset after a period of time, ideally the market has met the demand due to the success of the fund over a number of years. For this fund we are recommending a sunset in 7 years, with a realignment of funding every 2-3 years. 

  • Developer meets pre-determined criteria for eligibility for the fund
  • Developer asks for gap financing through the application process
  • 70% of dollars traditional loan to Developer at a 1% interest rate over 10 years.
    Total available $6,237,000. This will be recouped in 10 years plus interest
  • 30% of dollars are a forgivable loan to Developer over 10 years. The Developer must stay with the project for 10 years or these funds will need to be repaid in full at 1% interest if sold before then.
    Total available $2,673,000. This money will not be returned by the developer but you will have immediate development and an increased tax base so the costs will be more than recouped
  • Developer has 6 months to begin/break ground on their plan once the dollars are granted 

Revolving Loan Fund 

While the housing shortage in Oskaloosa is caused by several factors, there is only 1 solution – bridge the gap between the cost to build and the cost to sell. In order to achieve affordable rental and/or new home prices, the city needs to work with developers to create a revolving loan housing program to address the issue head on. 

The goal of this fund is three-fold: 

  • Incentivize developers to Oskaloosa 
  • Create a self-sustaining fund 
  • Achieve enough success to make the program obsolete 

The goal of this plan is focused on incentivizing development of general occupancy units to meet 60% of the projected need by 2025. After this, the market should take over and there won’t be a need for additional incentive packages.  

Goal: 250 general occupancy units by 2025

  • 70% – 175 single family homes
  • 30% – 75 modern apartments

According to the Mahaska County Assessor 394 vacant residential lots over 5,000 square feet currently exist within the city limits. This number does not include parking lots or buildings, but many might be adjoining parcels under common ownership. Using half of this number would allow for approximately 197 infill lots available to be developed.

$ 0 M/YEAR

This fund will be created with resources from the city, private sector, the county and the state

City contributes $500k per year for 7 years = $3.5 M total  

$5,410,000 remaining: 

1/3 – Private
$1,803,334 over 7 years ($257,619/year) 

1/3 – County (Bond)
$1,803,334 over 7 years ($257,619/year) 

1/3 – State*
$1,803,334 over 7 years ($257,619/year)
*IF city, private and county all contribute 

$ 0 M

Combined annual estimated economic impact

This plan consolidates the existing programs into a streamlined system, solves the local housing challenges, increases the population and tax base, while also generating money to cover costs associated with the program creating no need for increased taxes. This is only true if the plan is followed as outlined above.  

Economic Impact  

Adding 175 new single-family homes with an average of 3 people per house, and 75 new apartments with an approximately 125 people, means there will be an estimated 650 new residents in the city.  

Of those, roughly 500 will be adults who would spend an average of $10,000 a year into the community’s local economy, equaling $5 million. Additionally, around 150 of those residents would be children who would bring approximately $6,000 per student to the Oskaloosa school district from the state, equaling $900,000 annually.  

Action Steps


The City of Oskaloosa

Identify what entity/person(s) will lead the new RLF program.

Build a plan to consolidate existing programs into one streamlined system.


The City of Oskaloosa

Estimate total costs of existing program by the city annually to establish amount for RLF.

Identify list of potential private sector contributors and host a CEO meeting to lay out plan and recruit investments.


The City of Oskaloosa, Mashaska County Supervisors

Once city and private funds are committed, set up meeting with the County to solicit funds.

We recommend a bond from the county based on estivated value and low debt.

The State has money ready to invest in rural housing development but they will need to see the city, county and private investments committed first


The City of Oskaloosa, The State of Iowa (Either Iowa Finance Authority or Iowa Economic Development Authority)

Once city, private and county funds are committed, set up a meeting with the State, either the Iowa Finance Authority or the Iowa Economic Development Authority to apply for state investments in rural redevelopment.


The City of Oskaloosa

Once program is established, create a webpage that clearly outlines the program, eligibility, benefits, application process, timeline, regions, etc.

Create a press release and push on statewide media platforms to attract publicity.