Iowa City buys, sells homes to 'stabilize' downtown neighborhoods: UniverCity Neighborhood Partnership

City spends up to $50,000 on renovations per house

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IOWA CITY — A seven-year-old program has put Iowa City in the middle of the downtown real estate business.

The UniverCity Neighborhood Partnership allows the city to purchase downtown homes — typically duplexes or separated into apartments — rehabilitate them into single-family homes and sell them to income-eligible buyers, with the stipulation they remain owner occupied for 20 years.

These types of duplexes and apartments came under fire from city council last week when it placed a moratorium on new rental or building permits for downtown to prevent these from increasing in numbers or size.

UniverCity is “designed to basically help stabilize our older residential neighborhoods to make them increasingly viable as locations for homeowners and families to live in,” Iowa City Mayor Jim Throgmorton said.

Lucy Joseph, a code enforcement specialist with the city, said the program, begun in 2010, has purchased or is in the process of purchasing 60 homes. On average, the city tries to buy homes for under $200,000 and can spend no more than $50,000 in renovations to convert them back to a single-family space, she explained.

Joseph said that while a home’s renovation budget comes from city dollars, the money to purchase the building is obtained through loans, which are paid back after the house is sold. The renovation fees are forgiven if a buyer lives in the home for five years and the city sells the building at its purchase price plus carrying costs.

While the program is producing single-family, owner-occupied homes downtown, it takes rental apartments out of commission in a city in which the average rent is much higher than the state’s — $865 versus $697, according to US Census Bureau estimates — and has low rental vacancy rates, recently quoted as 1.43 percent among the three major Johnson County cities, according to the most recent Cook Appraisal rental survey.

“That would have no significant effect on the rental market or on rents. What it does do is help stabilize particular blocks in particular neighborhoods and increase the viability of those blocks and neighborhoods as places for homeowners to live in,” Throgmorton said.

Darian Nagle-Gamm, senior transportation engineering planner with the city, moved into a UniverCity house in the Longfellow neighborhood in 2013. She and her family always were hoping to move closer to downtown, she said.

Her 1890 house was rented as a five-bedroom home, with the dining room being used as a bedroom, before it was converted back to a three-bedroom, owner-occupied house with UniverCity.

“I was one of those folks that lived as close as I could live to downtown, but I wanted to be close. To get any closer to downtown was really difficult because most of the housing stock had been student rentals for so long,” Nagel-Gamm recalled. “To me, I really like that the city is investing in the neighborhoods close in and is trying to bring close-in neighborhoods back into a better balance.”

Jen Knights, another UniverCity homeowner, said she wouldn’t have been able to afford a house in her downtown Iowa City neighborhood without the program. Her northside neighborhood home had been a duplex, even as early as the 1940s.

“We also feel a responsibility, as longtime residents of Iowa City, to stabilize the core of our beautiful city and make sure that regular, long-term Iowa City residents and their families can actually also enjoy the downtown,” Knights said. “Regular middle-class normal people that live in Iowa City are getting priced out of those downtown neighborhoods because it’s so lucrative from a landlord standpoint.”

l Comments: (319) 339-3172;

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