Rent-to-own homes planned for flooded neighborhoods

CEDAR RAPIDS - City Hall's commitment to build new homes on newly vacant lots in flood-hit neighborhoods may include 38 rent-to-own homes designed to one day make homeowners out of renters who can't get a mortgage.

The City Council last week authorized the city manager to sign an agreement with Cedar Rapids Rose Homes LP, a Hatch Development Group project, that will provide 35 city lots for 38 homes.

Hatch Development Group is based in Des Moines and is the developer of the Oak Hill Jackson Brickstones, which are apartment complexes built on Sixth Street SE after the Floods of 2008.

The city's agreement with Hatch is conditioned on the developer's ability to secure more than $5 million in low-income housing tax credits from the Iowa Finance Authority. That decision is expected in June, said Paula Mitchell of Cedar Rapids' Community Development Department.

Mitchell said the value of the 35 city-owned lots has been put at $572,212. Providing them to an affordable housing project is permitted under federal rules because the Hatch project meets a national housing objective.

The development agreement also calls for the city to provide a 15-year loan of $575,000 to the project should it secure tax credits.

Hatch's plan calls for 38 three-bedroom homes with average monthly rents of $700. Households earning 60 percent or less of the average median income in the county will qualify for the program, Mitchell said.

Council member Monica Vernon said she hoped the houses would fit the neighborhood and meet design standards, such as attractive roof pitches and front porches, that the city has asked for in other post-flood housing construction. Mitchell said they would.

Officials now have targeted for redevelopment more than 400 city-owned lots outside the 100-year flood plain and the construction zone for a proposed flood protection system. Hundreds more would be available with a protection system in place. Most of the lots had damaged homes on them that have been bought out and demolished.

More than 100 and as many as 200 new homes may be built on the lots as part of a different neighborhood rebuilding program called Rebuilding Ownership Opportunities Together. The ROOTS program features federal disaster dollars to provide attractive incentives to qualified buyers of the homes in exchange for their willingness to be part of the neighborhood-rebuilding effort. Buyers must meet certain affordable-income guidelines.

The Hatch Development plan will put homes on 19 northwest Cedar Rapids lots and 16 on the southwest side. Skogman Homes of Cedar Rapids will build the homes.

“Our hope is that Rose Homes will help the neighborhoods fill in the gaps that were left in the wake of the 2008 flood,” said Dale Todd, Hatch's regional director of development.

In the rent-to-own program, residents lease homes and a portion of their monthly rent is set aside for use in the future as a down payment toward buying a home.