Group that accused Iowa City of housing discrimination seeks funding

IOWA CITY – A nonprofit organization that accused Iowa City of housing discrimination two years ago is making another pitch for funding for the project that set off the dispute.

The Housing Fellowship, which provides housing to low-income people, accused the city of violating federal and state anti-discrimination laws following a split City Council decision in 2010 not to approve its plan for six two-bedroom rental homes at 2500 Muscatine Ave. on the east side of town.

The Iowa City-based organization has submitted a new request for $258,239 for the same number of units at the same location.

Iowa City's Housing and Community Development Commission will discuss the application during a Feb. 16 meeting. A recommendation to the City Council, which will have the final say over funding, is expected March 22.

The Muscatine Avenue project is one of 17 seeking federal Community Development Block Grant and HOME funds distributed by the city.

“It's a good site. It's by a lot of services. It's on the bus line,” said Maryann Dennis, executive director of the Housing Fellowship.

A majority of City Council members didn't agree two years ago in a dispute that was as much a continuation of a debate over subsidized housing as it was the Housing Fellowship's request.

In March 2010, most of the council members, in denying the project, said there was too much subsidized housing in east and southeast Iowa City and felt the concentration had a negative effect on nearby schools.

That June, an attorney for the Housing Fellowship said denying the organization's application made housing unavailable to minorities and families and violated state and federal laws. City Attorney Eleanor Dilkes rejected those allegations, and no legal action followed.

The council a year ago approved a model to guide decisions on the location of affordable housing funded with CDBG and HOME money. That model includes shuts off parts of east Iowa City to funding, but 2500 Muscatine Ave. is situated between them and is eligible.

The four council members who opposed the project in 2010 – Connie Champion, Terry Dickens, Susan Mims and Mayor Matt Hayek – are still on the council, while the three supporters are not.

Mims, however, said the proposed location being in an acceptable area under the housing model changes the situation for her.

“If it fits in the model, somebody's going to have to come up with a strong argument to oppose it,” she said.

It's still far from certain the rental housing will be built, however.

The city has received 17 applications asking for nearly $3.4 million in CDBG and HOME funds next fiscal year, with a little more than $1 million available.

Most of the housing projects are paid from the HOME program, which has seen its funding reduced in recent years and has $381,851 next fiscal year. There are nine applications for housing assistance, including the Muscatine Avenue project, seeking more than $2 million in all.

Tracy Hightshoe, Iowa City's community development planner, said the funding process will be very competitive.

Dennis said the Housing Fellowship project probably won't happen without the city's financial support.