Merle Hay Plaza Project Won Housing Competition

The development earned eligibility to apply for $14 million in federal tax credits for senior apartments.

Updated on Sept. 21, 2026 in Apartments

Merle Hay Plaza Project Won Housing Competition

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Should your community prioritize converting aging shopping malls into affordable housing units?

The Merle Hay Tower project has won the Iowa Finance Authority affordable housing innovation competition. This victory makes the site the only development in the state eligible to apply for $14 million in federal housing tax credits this year.

Why it matters

Converting the tower into housing is designed to generate foot traffic for the surrounding mall area. This initiative supports a broader transition toward creating a mixed-use district in Des Moines.

The $19.5 million development will convert the tower into 59 income-restricted apartments for residents aged 55 and older. The project plan also includes demolishing a former theater to build an outdoor plaza.

The players

Iowa Finance Authority

This state agency oversees housing finance programs and administered the competition.

Gratus Development

This firm is the developer responsible for managing the predevelopment phase of the tower conversion.

The details

Gratus Development is currently managing early predevelopment work for the site. The plan focuses on revitalizing the existing tower structure to support the city's senior housing needs.

The project is eligible to apply for federal tax credits in 2026.

Culture Shift

This conversion reflects a growing national trend of repurposing commercial infrastructure into mixed-use residential spaces. By integrating senior housing into existing retail hubs, developers are challenging traditional zoning that keeps commercial and residential areas separate.

Eligible residents aged 55 and older will gain access to 59 new income-restricted housing units in the Des Moines area. The addition of the outdoor plaza may also improve local pedestrian accessibility and public space near the mall.

The takeaway

Repurposing aging towers into senior living spaces can provide a second life for retail districts. These projects offer a practical model for balancing the need for affordable housing with the desire to preserve existing suburban infrastructure.