Iowa Code ch. 403A § 403A.6
Operation of housing not for profit
Operative Text
It is hereby declared to be the policy of this state that each municipality shall manage and operate its housing projects in an efficient manner so as to enable it to fix the rentals or payments for dwelling accommodations at low rates consistent with its providing decent, safe and sanitary dwelling accommodations for persons of low income, and that no municipality shall construct or operate any housing project for profit, or as a source of revenue to the municipality. To this end the municipality shall fix the rentals or payments for dwellings in its projects at no higher rates than it shall find to be necessary in order to produce revenues which, together with all other available moneys, revenues, income and receipts in connection with or for such projects from whatever sources derived, including federal financial assistance, will be sufficient to do all of the following: 1. To pay, as the same become due, the principal and interest on the bonds issued pursuant to this chapter. 2. To create and maintain such reserves as may be required to assure the payment of principal and interest as it becomes due on such bonds. 3. To meet the cost of, and to provide for, maintaining and operating the projects, including necessary reserves therefor and the cost of any insurance, and of administrative expenses. 4. To make such payments in lieu of taxes and, after payment in full of all obligations for which federal annual contributions are pledged, to make such repayments of federal and local contributions as it determines are consistent with the maintenance of the low-rent character of projects. Rentals or payments for dwellings shall be established and the projects administered, insofar as possible, so as to assure that any federal financial assistance required shall be strictly limited to amounts and periods necessary to maintain the low-rent character of the projects.
Iowa Code § 403A.6 establishes a state policy that municipal housing projects must be operated efficiently and without profit motive, with rents set only as high as necessary to cover defined costs. Those allowable costs include bond debt service, required reserves, operating and maintenance expenses, insurance, administrative costs, and certain payments in lieu of taxes. The provision also directs that any federal financial assistance used must be limited to what is strictly necessary to preserve the low-rent character of the projects.
Plain English — not legal advice.
Municipal housing authorities operating projects under Iowa Code § 403A.6 are expected to set rents at the minimum level needed to cover bond obligations, reserves, operating costs, and administrative expenses—not to generate surplus revenue for the municipality. Compliant operators document how each rental rate is calculated against these enumerated cost categories and avoid structuring rents in ways that could be characterized as profit-generating. Operators also track federal financial assistance carefully, since the statute requires that such assistance be limited to amounts and periods strictly necessary to maintain the low-rent character of the housing.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Iowa Code § 403A.6 reflects a state policy that residents of municipal housing projects are entitled to rents set at rates no higher than what is needed to sustain the project's operations—not to enrich the municipality. Tenants who believe their housing authority is charging rents inconsistent with this non-profit mandate may raise the provision as a basis for inquiry or complaint with the relevant municipal housing authority or a tenant-rights organization familiar with Iowa public housing law. Consulting a legal aid organization or tenant advocacy group can help residents understand whether the rent-setting practices at their project align with the cost-based framework § 403A.6 requires.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 18, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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