Iowa City townhouse tenants may be displaced during renovations

IOWA CITY - A second Iowa City affordable housing complex is relocating tenants to do renovations, but unlike the Rose Oaks Apartments, the owners of Walden Ridge must keep rents low in half the rehabbed townhouses and pay relocation expenses for displaced tenants.

SouthGate Companies, based in Iowa City, sent letters this week to tenants of Walden Ridge, a complex of about 100 townhouses west of Mormon Trek Boulevard, just behind Kum & Go, alerting them to the renovations, already underway in nine vacant units.

'We're asking tenants if they are interested in moving into the renovated units in July or August,” said SouthGate President Jerry Waddilove. The company will install new cabinets, countertops and flooring as well as do interior painting in the 53 townhouses SouthGate owns. The rest of the units have other owners.

Iowa City is giving SouthGate a $600,000 loan in Community Development Block Grant funds for the project, which means the company must limit rent in 26 renovated units. SouthGate also must provide relocation assistance to tenants displaced by the project, said Tracy Hightshoe, Iowa City neighborhood services coordinator.

'This is much better for the tenants than (for tenants at) Rose Oaks,” Hightshoe said.

Rose Oaks owners told hundreds of tenants in March their leases would not be renewed and they would need to find alternate housing as soon as possible. Tenants were offered $500 for transition costs. Owners said they would not be able to keep rents low after paying for the upgrades.

Some Rose Oaks tenants told city leaders and the media they couldn't find other housing at comparable rates. Iowa City's 2.38 percent apartment vacancy rate for 2015, as calculated by Cook Appraisal, was far lower than the 5 percent national rate. Vacancy rates outside the mile radius around the University of Iowa are below 1 percent.

Walden Ridge residents who choose to stay will pay comparable rent in the renovated units, Waddilove said. For example, a two-bedroom townhouse will stay at $875 per month, which is below the $1,064 average rent for an Iowa City two-bedroom, according to Cook Appraisal.

New tenants who earn 80 percent or less of the area median income, which is $65,800 for a family of four, will pay no more than $802 per month, minus the cost of utilities, for a two-bedroom apartment; $1,182, minus utilities, for a three-bedroom; and $1,420, minus utilities, for a four-bedroom, Hightshoe said.

Some tenants may have to move temporarily, but SouthGate will pay those expenses, Hightshoe said. 'I don't believe they will displace anyone permanently.”