116 3rd St SE
Cedar Rapids, Iowa 52401
Cedar Rapids picks HACAP to run Wellington Heights affordable housing project
City will turn over ownership when construction wraps this spring
CEDAR RAPIDS — Once rehabilitation work is complete this spring on a once-blighted building in Wellington Heights, Hawkeye Area Community Action Program will own and operate the old Colonial Centre property that the city of Cedar Rapids is transforming into affordable housing.
The Cedar Rapids City Council this week approved HACAP’s proposal to own and manage the building now dubbed “The Heights” at 1500 Second Ave. SE. When construction is complete in March, this city project will offer 25 affordable rental units and be turned over to HACAP to run.
“I think a lot of us look at that facility as a gateway into every day improving Wellington Heights,” Mayor Tiffany O’Donnell said. “I’m thrilled about the partnerships all around and even happier that we know there’ll be resources there on-site to have a more comprehensive and holistic support for citizens.”
The city in October issued a request for proposals to seek a qualified nonprofit or other third-party entity to own and operate the complex.
A committee met earlier this month to review four proposals from nonprofits. This review assessed owner capacity and experience with affordable housing as well as financial feasibility. The review panel also looked at the community benefit the project provides, and awarded extra points for serving a higher need population and providing additional amenities or services to tenants.
HACAP received the highest scores, city Housing Services Manager Sara Buck said. According to Buck, a local lender on the committee said HACAP provided the only pro forma that was realistic in looking at reserves and maintenance costs to be in long-term compliance with the 15-year affordability requirement.
In HACAP’s proposal, Buck said, the property would be staffed with supportive services and an employee would be on-site at least 30 hours a week. This facility would share an employee with another nearby HACAP property. HACAP also would leverage other funding sources to provide supportive services.
Under a development agreement that city staff will negotiate, Buck said HACAP has proposed having low overall rent rates, with 15 of the 25 units renting to those at or below 50 percent of the area median income, which was $63,170 for households, according to 2020 census data. The other 10 units are for those earning 80 percent or less of the area medium income.
All utilities are included in rent because the building operates off one meter.
Among the units earmarked for the lowest incomes, rent for a two-bedroom is $800 a month. For anyone above 30 percent of the area median income, monthly rent for a one-bedroom is $650. Those earning less than 30 percent of the area median income would have monthly rents totaling $575.
HACAP is trying to make it affordable for those on fixed incomes such as Social Security or disability, Buck said, “to make sure they have that additional funding to spend on food” and other essentials. Some people experiencing homelessness make more than 50 percent of the area median income, Buck said, but it can be hard to find a truly affordable unit if an individual is earning only Social Security, for instance.
Twenty-two of the units will be one-bedrooms and three will be two-bedroom. Six will be fully compliant with the Americans with Disabilities Act, though all will be fully ADA convertible. The property will include office spaces, a computer lab, meeting room, a laundry and a tenant storage area. A gas-powered generator will be installed.
Leasing depends on when construction ends, Buck said, but hopefully in early April. There will be a fair housing marketing plan to ensure that low-income and minority populations understand how to apply. City staff will work with HACAP to have an outreach plan in place, Buck said.
A lien will be placed on the property to ensure rent affordability for at least 15 years, and there will be ongoing performance measures to ensure accountability. A development agreement finalizing terms would come before council later in early 2024.
After purchasing the property in December 2021, Cedar Rapids leveraged four state and federal grants to fund the $6.9 million project: Community Development Block Grant-COVID-19 funds provided by the Iowa Economic Development Authority; city CDBG funds; the HOME Investment Partnership Program, a U.S. Housing and Urban Development effort funded by the American Rescue Plan; and American Rescue Plan Act funds that came to the city through the U.S. Treasury.
Council member Dale Todd, who represents District 3 that includes Wellington Heights, said he hoped to see this property’s redevelopment be the start of the area’s revitalization.
“As a city team, I think we’re looking at this being a component of revitalization of that block, that core part of the neighborhood in Wellington and Mound View,” Todd said. “This is really the first start in helping to stabilize what was a really blighted building. It probably came very close — very close — to the demo ball, the wrecking ball.”
Comments: (319) 398-8494; marissa.payne@thegazette.com
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