Merle Hay Plaza and Apartments Wins Iowa Housing Innovation Competition, Bringing Affordable Senior Housing to Underutilized Mall Space

What this means

DES MOINES – The Iowa Finance Authority (IFA) today announced Merle Hay Plaza and Apartments, proposed by Gratus Development, as the winner of the 2026 Federal Housing Tax Credit Innovation Set-Aside Competition. The project will transform underutilized space at Merle Hay Mall into affordable housing for seniors, creating new opportunities for seniors to age in place with convenient access to everyday services and amenities. As the winning proposal, Merle Hay Plaza and Apartments will receive an award of Federal Housing Tax Credits representing up to approximately $14 million over 10 years, bringing the project one step closer to development.

Official release

Source material from Iowa Economic Development Authority. The wording below is the issuer’s statement.

Merle Hay Plaza and Apartments Wins Iowa Housing Innovation Competition, Bringing Affordable Senior Housing to Underutilized Mall Space

Thursday, September 10, 2026

Press Release

Image

DES MOINES – The Iowa Finance Authority (IFA) today announced Merle Hay Plaza and Apartments, proposed by Gratus Development, as the winner of the 2026 Federal Housing Tax Credit Innovation Set-Aside Competition. The project will transform underutilized space at Merle Hay Mall into affordable housing for seniors, creating new opportunities for seniors to age in place with convenient access to everyday services and amenities.

As the winning proposal, Merle Hay Plaza and Apartments will receive an award of Federal Housing Tax Credits representing up to approximately $14 million over 10 years, bringing the project one step closer to development.

“This competition challenges developers and communities to think differently about where and how housing can be created,” said Debi Durham, Director of the Iowa Finance Authority and Iowa Economic Development Authority.

Merle Hay Plaza and Apartments does exactly that, reimagining underutilized commercial space as a place where older Iowans can live affordably, stay connected and age in place.

Debi Durham

The Innovation Set-Aside is the only affordable housing pitch competition of its kind in the country, providing developers an opportunity to compete for a dedicated allocation of Federal Housing Tax Credits based on innovative approaches to affordable rental housing. Now in its fourth year, the competition is designed to identify ideas that may not fit traditional development models and give promising concepts an opportunity to move from proposal to reality.

Three finalists presented their proposals live at the 2026 HousingIowa Conference in Des Moines before a panel of national housing, design and development experts. Proposals were evaluated for innovation in development, financing, partnerships and design, as well as their potential to address housing needs in new and replicable ways.

Merle Hay Plaza and Apartments will transform the vacant Merle Hay Tower into deeply affordable housing for adults age 55 and older. The development will allow older Iowans to remain connected to groceries, dining, banking, health-related services, recreation and year-round walking opportunities. A new Plaza Park will feature senior-friendly exercise equipment, public art and gathering spaces.

By converting underutilized commercial space into housing, the project will expand affordable housing options for Iowa’s growing senior population while turning a vacant landmark into a vibrant residential community. More information about the rental innovation pitch competition is available at the 2027 Innovation in Rental Housing Pitch Competition webpage.

Ashley Jared, Communications Director

Location

Iowa Finance Authority

1963 Bell Avenue

Des Moines, IA 50315

Email Address

[email protected]

Phone(s)

515.452.0474

Related Links

2027 Innovation in Rental Housing

Release text attributed to Iowa Economic Development Authority. Consult the official publication for any subsequent corrections or updates.