Joe Mitchell wants Iowans to know he’s skeptical of government housing subsidies. As a Republican candidate for Iowa’s 2nd Congressional District, he’s called the federal Low-Income Housing Tax Credit or LIHTC “a disaster” that needs to be “totally reformed.”
However, he doesn’t mention the housing tax credit that helped pad out his real estate portfolio in voicing his opposition to these subsidies.
In May 2021, then-state Rep. Mitchell voted for Senate File 619, which expanded Iowa’s Workforce Housing Tax Credit — a state program that allocates $35 million annually through the Iowa Economic Development Authority.
As a developer, he’s been a partner at BAM Development, Monroe Street Landing, Emerald Cove LLC, Bousselot & Mitchell Company, and J Mitchell Real Estate LLC, according to his House financial disclosure report.
Both BAM Development LLC and Bousselot & Mitchell Company went on to develop housing projects that applied for, and received, Workforce Housing Tax Credits: a 16-unit development in Grinnell, a 30-unit development in Clear Lake, and a 20-unit development in Dyersville. The three projects received a combined $2,559,880 in credits.
These credits are awarded through a competitive application process run by state economic development staff, not directly by lawmakers, and Mitchell wasn’t yet part of either company when he cast his 2021 vote. What the record does show, however, is a lawmaker who voted to grow a subsidy program, then built out a real estate portfolio that leaned heavily on that same program in the years that followed.
Meanwhile, Mitchell has been less supportive of other housing development subsidies. For example, he’s been a critic of LIHTC which has been used to develop low-cost housing across the United States. Groups like the Cato Institute have criticized the program saying that developers can capture roughly half of a project’s subsidy value as profit, with tenants seeing comparatively modest savings, and pointed to construction costs running well above market rate in some states. Mitchell’s criticism is more rooted in the perspective of a developer.
“It’s too much paperwork. It’s too much compliance. Too much cost,” Mitchell said on Business Talk With Meghan McNulty earlier this year.
But that same critique—that subsidized developers capture more of the benefit than the public housing they’re supposed to produce—applies at least as easily to Iowa’s Workforce Housing Tax Credit. Unlike the federal credit, Iowa’s program isn’t targeted at low-income renters at all; it’s designed to fund homes in the $200,000 to $285,000 range for what state officials call “working professionals.”
Mitchell told Business Talk he wants “Washington to look a little bit more like Iowa” on housing policy. He’s already gotten a preview of what that looks like: a program with fewer restrictions and less scrutiny than the one he calls a disaster — while $2.5 million of it went to companies he owns.
