Cedar Rapids’ core sees flurry of ‘market-rate’ housing projects

CEDAR RAPIDS - It didn't take the historic flood of 2008 to convince city leaders that the downtown and nearby upstart commercial neighborhoods needed an infusion of housing if they were going to matter.

But for the flood, though, it's not certain that B.J. and Jim Hobart would have been showing off the 16-foot-high, open-rafter ceilings and the inviting view of the Cedar River that are becoming part of their transformation of the century-old, one-time factory into the Mott Lofts across the river from downtown.

The 2008 flood, which inundated downtown and New Bohemia, Kingston Village and Czech Village as it did residential neighborhoods along the river, brought in its wake a tide of federal disaster money that has allowed the city to more than replace all of some 1,400 residential units lost to the surge.

In terms of new post-flood multifamily housing projects, 1,142 new apartments have been built or are in the process of being built as part of 46 housing projects with a total public and private investment of $165 million.

In addition, 804 new single-family houses with a total private and public investment of $120 million have been built with the help of federal disasters dollars.

However, all of those have come with some income-based strings because of federal funding support. For the apartment developments, that has meant a mix of rental units - some market rate, some more affordable.

The Hobarts' $4.6 million redevelopment of the Mott Building is different and is part of a leading edge in new housing options coming in and near downtown in which all the units will be market-rate, either rental or for-sale condominiums.

B.J. Hobart called market-rate a 'missing component.”

She said the Mott project, which will feature 16 one-bedroom or two-bedroom loft apartments on the top two floors and office and commercial space on the first floor and in the basement, has generated interest from prospective tenants because of its granite-countertop-type amenities, prime location and great views.

'I have preached this and preached this to the city of Cedar Rapids,” said Jim Hobart. 'There is a place for (income-based units.) But in the downtown area, you also need to do market-rate units with people who have discretionary income that they can spend downtown and keep your downtown going.”

It is a sermon that Hobart is preaching to the choir at City Hall, said Community Development Director Jennifer Pratt.

Pratt said much of the housing that has been built in the city since the flood has been in the range considered affordable because of the infusion of federal disaster dollars and because much of what was lost had been affordable housing.

'Making sure those affordable units were there was critical,” Pratt said.

However, she said the city's housing market analysis now shows that there is a 'gap” between the supply of market-rate housing in and around the downtown and the demand for it.

So private-sector developers, she said, are stepping up to meet demand from young professionals, those contemplating retirement or recently retired and others attracted to living in a downtown-like environment.

At the same time, Pratt said the federally supported housing projects have played an important role in giving developers the confidence to invest because most of the affordable projects also have included market-rate units, which developers have been able to fill, she said.

Pratt said New Bohemia, the commercial and entertainment district south of downtown, is an example of how housing - such as the WaterTower Place and Bottleworks condominiums in renovated warehouses next to one another - can help to bring life to a place.

Craig Byers, developer and part owner of NewBo Station under construction at 1028 Third St. SE in the heart of New Bohemia, said all but one or two of the building's 14 market-rate apartments are rented ahead of the scheduled Feb. 1 occupancy.

Byers said being first to the market in what will be a flurry of other new market-rate projects in the next year or two has helped to fill the apartments. But so, too, has the higher-end quality and location of the apartments.

'The only marketing we did is that flimsy sign out front,” Byers said.

He said the city has seen a lot of 'great housing projects” with the help of federal dollars go up since the flood, which he said the city 'drastically” needed to replace the housing stock it lost.

'Now that the downtown is back, and now that New Bo and Kingston Village are vibrant communities and neighborhoods, the developers and the city need to provide market-rate housing so we have everyone at both ends of the (income) spectrum living in these neighborhoods,” Byers said.

The Hobarts and their company, Hobart Historic Restoration, are scheduled to break ground in the next few weeks in the 400 block of First Street SW in Kingston Village on their new six-story, market-rate, apartment-condominium project with a first floor of commercial and office space.

They've changed the name of the project from the Lofts at Red Cedar to The Metropolitan. They had come to fear that the downtown area might have too many projects called 'lofts,” they said.

In total, the city's Community Development Department has given the go-ahead on a total of 10 new market-rate-only projects in the core district that will provide some 236 residential units and $84 million in new investment. All come with city support in the form of property tax breaks.

Those include The Depot residential/commercial/office project under construction behind the NewBo City Market; the Clockhouse project under construction downtown in the former Great Furniture Mart building; and the proposal for the former Smulekoff's Home Store building downtown.

'Your urban downtown needs to have some high-end stuff so people living there have some money to spend,” Jim Hobart said. 'Businesses see people with money to spend downtown, and they will open up and make it.”