Affordable housing helps renters save

CEDAR RAPIDS - Some 200 households not unlike Tim Conlon's have applied to get one of 20 new homes in a first-of-its-kind program in Cedar Rapids that sets aside a portion of the monthly rent for use by the tenant to one day buy a house.

Ten of the 20 “rent-to-own” homes now have tenants even as the remaining potential tenants wait for the last of the homes to be finished up. All 20 three-bedroom homes are part of the new 80-plus-home development on Zika Avenue next to a piece of the Ellis Golf Course.

“We just couldn't believe it,” Conlon said Tuesday from his front porch as he recalled learning that his family's application to the rent-to-own program was accepted. He said the new rental home with all-new appliances feels three times as big as the manufactured house he, his wife, Jeni, and one child had been living in before June.

“We sit out on our back deck now and watch the deer playing on the golf course,” said Conlon, who has worked as a locksmith, in restaurants and a calling center and in building maintenance.

At an open house in the development Tuesday, Joe Lock, executive director of the Affordable Housing Network Inc., and Kyle Skogman, president of Skogman Homes, said that 200 applicants for 20 rent-to-own homes is proof of what Lock said is a “genuine need for affordable housing” in the Cedar Rapids market.

He pointed to a pre-flood study by the city that showed Cedar Rapids had a deficit of affordable housing - even before the 2008 flood destroyed much of what had been in place in the city's core neighborhoods.

The flood, Lock said, only “exacerbated” the need.

Those who qualify for the rent-to-own program must meet household income guidelines. For 10 of the homes, the requirement is 50 percent or less of the annual median household income for the area ($35,050 for a family of four); for the other 10, it's 60 percent or less of that measure ($42,060).

Monthly rent for the homes is $625, with $100 of the total put in escrow for the renter to use to buy a house in the future. Tenants also take ongoing consumer-credit classes. After five years, the renter will have $6,000 in escrow to make a down payment on a house, Lock pointed out.

He called the rent-to-own program “literally a homeownership incubator.”

Federal financing from affordable housing tax credits administered by the Iowa Finance Authority helped to pay for the construction of the rent-to-own homes, which were built by Skogman Homes of Cedar Rapids. The homes must stay as rentals in the program for 15 years, so renters who move on to buy homes likely will be buying homes elsewhere in the neighborhood or in the city, Lock noted.

A partner of the Affordable Housing Network, Community Housing Initiatives Inc., is the managing landlord for the rent-to-own program. Community Housing Initiatives, which has headquarters in Spencer and an office in Cedar Rapids, can be reached at (319) 362-1020.

City Hall, for instance, has used federal disaster funds to provide incentives for two rounds of new-home construction. A third round of new-home construction is slated to start soon in the city's flood-impacted neighborhoods. Those homes will be built on lots outside the 100-year flood plain that once held flood-damaged homes, which have been demolished to make way for the new.

Both Lock and Skogman said the ongoing need for affordable housing in Cedar Rapids should guarantee that program's success, too.