Free...to a good home renovator

City Hall is giving away houses for free.

Cedar Rapids city officials are attempting to save some of the 476 “least badly” flood-damaged homes among the 1,200 or so buyouts. The premise is that private and non-profit sectors can best determine which homes are worth saving and which aren't.

The answer is: 100.

Eighteen builders and contractors and three non-profit programs identified 100 homes that they have an interest in obtaining - free but in exchange for renovating and selling the homes with a 15 percent profit margin.

A total of 564 requests were submitted by the 21 qualified bidders for those 100 homes. The five most-sought-after homes are at 1137 11th St. NW; 1511 Eighth St. NW; 1784 Mallory St. SW; 1621 10th St. NW; and 1006 10th St. NW.

The bidder with the highest score - based on experience in disaster renovation work and the capacity to complete projects - was awarded a home for which more than one bidder was competing.

At least a few of the homes are sufficiently desirable that their owners have dropped out of the city buyout program.

Jeff Capps, executive director of Cedar Valley Habitat for Humanity, said only 10 of the 15 homes his organization has been awarded appear to be buyout candidates.

“But we feel pretty good about the 10, and we're ready to tackle them,” Capps said.

Once the city buys out a home in the giveaway-for-renovation program, the city will notify the developer, who has 21 days to submit a renovation plan. The renovation must then occur within 60 days, with a sale to someone who owns and occupies it within a year. The flood victim who previously owned it and was bought out with disaster funds has the right of first refusal in the sale.

The city will post on its website for seven days any of the 476 homes once they are bought out and headed to demolition. Any qualified bidder can then rescue a home from the demolition list for renovation and sale.

Private bidders include Allen Connerly, owner of Connerly Construction, who has been awarded two homes, and builder Jim Sattler, owner of Jim Sattler Inc., who has been awarded 21. Two well-known non-profit groups active in flood recovery - the Affordable Housing Network's Block by Block program and Cedar Valley Habitat for Humanity - have been awarded 14 and 15 houses, respectively.

---- Connerly said he has done home renovations for the city for years and is accustomed to programs that limit the contractor's profit margin. He also said he has bought three flood-damaged homes, renovated them and resold for a profit in the 30 percent range.

The giveaway program doesn't come without some concerns, one of which is flooding the housing market.

Kyle Skogman, president of Skogman Homes, which has been awarded three houses, suspects that fewer than 100 homes will get renovated under the program, once the city buys them and builders get inside to see the damage.

“If the number drops to 25, that's manageable. Fifty may be fairly manageable. If it's up to 100, it could be a little bit of a market problem,” Skogman said.

Jim Ernst, president/CEO of the non-profit Four Oaks family services agency and its non-profit subsidiary, the Affordable Housing Network, suggests rent-to-own would be a way to get people into some of the homes.

Ernst adds that sale prices of the renovated homes should not be so low as to undercut the value of other homes on a block.

Of the 476 homes in the giveaway program, 275 sit in the 100-year flood plain or in an area designated as a construction zone for a new flood-protection system. The program requires those homes be moved before renovation.

Qualified bidders offered to move just six of those houses: 1808 C St. SW; 2108 C St. SW; 1654 Eighth St. NW; 623 H Ave. NW; 1723 Eighth St. NW; and 1118 Second St. SE.

The city has been and is demolishing another 650 homes that have been deemed “imminent threats” to the public's health and safety.