Some buyouts send wrong message

By The Gazette Editorial Board

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Buyers who snatched up flood-damaged homes in Iowa City's Parkview Terrace neighborhood knew exactly what they were getting into.

In many cases, they were able to buy houses for pennies on the dollar from property owners who were uninsured and unprepared for the catastrophic 2008 event, trying to cut their losses and move on with their lives.

For the city to buy those homes now, as has been proposed, would be a misuse of taxpayer money. In fact, it sounds reckless for counselors to consider buying homes from post-flood buyers on one hand, while discussing steep budget cuts and tax increases for the next fiscal year on the other.

And buying out these owners - some of whom, it seems, bought flooded Parkview Terrace homes in the hopes of making a quick profit - sends the wrong message about developing in flood-prone areas.

There's a reason post-flood owners aren't eligible for federal and state emergency funding intended to help property owners negatively impacted by the flood: They felt no such impact.

There is nothing wrong with investing time and money in the hopes of big return. But it's not in the greater public interest for government to ensure that happens in every case.

Even if the city did have the money, to swoop in now and cut checks to those post-flood property owners - with the memory of the flood so clear in former residents' minds - would, rightly, leave a bad taste in the mouths of many Iowa City residents - flood victims or no.

We understand that buying homes from post-flood buyers is in keeping with the city's stated long-term goal of purchasing more than 130 homes in Parkview Terrace - something we have no problem with in general.

Already, the city has acquired more than 65 homes in the area and has expressed interest in buying other homes as they come on the market or as owners contact the city expressing interest in selling. That seems reasonable over the long term. But the city shouldn't feel obligated to reward those post-flood owners who took risks they should be well aware of.

With city leaders in budget talks looking for ways to cut up to $3.5 million from the capital improvement plan budget, the five-year, $500,000 earmark for city-funded buyouts seems a logical place for some trimming.