Local housing boom doesn't need an economic recovery; it's got Uncle Sam's dollars

CEDAR RAPIDS - Boom times seemed at hand last week as builders scurried to get in front of the City Planning Commission to win regulatory approval for a robust list of residential building plans.

Six different building proposals were on the commission's plate, proposals that called for the construction of 135 units of housing, some traditional single-family homes and some duplexes. Also in the mix was the development of a 75-acre parcel north of 74th Street NE that has room for a few hundred residential units.

Recession: What recession?

In fact, what is happening is the result, not of a down economy leaping to its feet, but of a federal and state government disaster-recovery plan to help replace some of the 1,300 or so homes lost in Cedar Rapids to the June 2008 flood.

The Single-Family New Construction Program, which provided $8 million in funds in 2009 in Cedar Rapids for the construction of 184 units of new housing, is about to launch a second round of building with $13.35 million in federal help - help for both for builders and buyers - that is expected to add 235 more units of housing to the city.

There is little question that program is helping with residential building that otherwise would not be occurring in Cedar Rapids.

“This is allowing people to go ahead and move forward with plans that have been on the shelf,” says Allen Witt, business development manager for Hall & Hall Engineers Inc.

Drew Retz, vice president of Jerry's Homes in Cedar Rapids, says 25 percent of his crews and the crews of his subcontractors would have been out of work in 2009 but for the jolt the replacement housing program gave to the local construction economy.

The city's building-permit numbers seem to make the case: In 2007, the city issued 350 permits for new residential construction of all types. In 2008, the number was 338. But in 2009, with the help of the subsidies from the replacement housing program, that number jumped to 398, according to city figures.

Builders now are up against a March 12 deadline to submit new proposals to City Hall.

The flurry of activity, however, comes with something of a clash of interests:

-- The City Council wants as many of the housing units as possible built closer to the urban core in what the council calls “infill” development.

-- However, developers say there is a dearth of buildable lots in the urban core, at least until flood-wrecked homes are demolished and a new flood-protection system is in place. Developers say the definition of “infill” means different things to different people: Isn't building on available lots in new neighborhoods “infill” development, too? they say.

-- Meanwhile, existing homeowners now are faced with fast-track construction plans, some of which propose to more densely place homes and duplexes next to existing single-family homes that enjoy larger lots.

Neighbors last week turned out to object to three of the proposed developments: a proposal to build up to 34 duplexes in the already heavily developed area at Boyson Road NE and at Creekside Drive NE on a spot one neighbor had hoped to see low-traffic dentist-type offices; a proposal to build eight single-family homes, two duplexes and a triplex at 2340 C St. SW, next to long-established single-family homes; and an undefined proposal to build more densely than current zoning allows on 75 acres north of 74th Avenue NE.

“The neighbors are getting a little restless,” Witt said to the planning commission last week as he heard neighbors in the audience at the ready to take to the microphone to voice objections to the request to change the zoning on the 75-acre parcel to allow more homes per acre on it.

The planning commission tabled the matter for now, but gave the go-ahead on the other projects.

The housing proposals in front of last week's planning meeting were only some of those in competition to get into the Single-Family Housing Construction Program.

“The housing program is a crapshoot,” Jerry's Homes' Retz said. “We don't know if we're going to get accepted or not.”

But getting development proposals past the City Planning Commission, even if they don't end up in the program, will position developers to build when the real economy finally comes around, he said.

At least half of the 235 units in the program cannot have a sale price of more than $150,000 with no unit having sale price of more than $180,000.

Among the attractions for builders is an extra payment of up to $12,000 per lot to offset the cost for streets, sidewalks, water lines and sewers and the almost-certain prospect of a buyer. Buyers can receive a subsidy of up to 25 percent of the cost of the units, which should mean more buyers than units to buy.

Prospective buyers who meet income guidelines can begin to apply for the program in April. Call 286-5872 for more information.