Cedar Rapids to spread some house reconstruction funding to city’s outskirts

CEDAR RAPIDS — New housing developments on the city's outskirts will benefit from federal disaster dollars that once had to be spent exclusively in flood-hit and core neighborhoods.

Paula Mitchell, the city's housing and redevelopment manager, said Tuesday that the city no longer has a sufficient number of available city-owned lots in flood-hit and core neighborhoods for building replacement homes.

At the same time, the deadline for the city to use the U.S. Housing and Urban Development's Community Development Block Grant disaster funds is Sept, 30, 2015. So the city now needs to look to housing developments on the city's periphery if it is going to try to use most of the money, Mitchell said.

In August, the City Council had amended its rules for the single-family new construction program — which the city calls Rebuilding Ownership Opportunities Together, or ROOTs — to allow steering some of the replacement housing funds away from the city's core.

Mitchell told the council Tuesday that the approaching deadline has required a 'balancing of interests,' both to continue to rebuild in the core and to replace as many houses lost to the city's 2008 flood as possible before funds vanish.

For instance, the city is requiring builders to construct a ROOTs home in the core for every home ROOTs home that is built outside of it.

The ROOTs program is in its fourth round of funding, and it now has $11 million to spend. The funds should provide support for the construction of 190 new homes. To date, builders have signed up to build 155 units, with 119 in flood-impacted and core areas and 36 in developments on the city's periphery, Mitchell said.

The ROOTs program uses federal dollars to provide buyers a down payment of 25 percent of the cost of the home and to provide the builder with up to $12,000 to cover infrastructure related costs that are part of the construction.

The buyers must qualify for a mortgage and at the same time not have too much income so they don't meet income guidelines that come with the program.

The 190 new residential units in Round 4 of funding will bring to 834 total new units in the program, the vast majority of which have been stand-alone, single-family homes. A total of $44.4 million in public funds will have been spent to go with $81,1 million in private investment.

City Council member Ann Poe, chairwoman of the council's Flood Protection Committee, on Tuesday said the City Council has done everything it could to rebuild in the flood-hit neighborhoods within the limitations that have come with the federal housing dollars. New homes have not gone up, for instance, in the 100-year flood, she said.

At the same time, Poe said the city's development staff and the council's Development Committee have been 'very thoughtful' as it now is looking outside of the core to spend some of the last housing dollars.

'We've gotten a lot of rebuilding done in our core,' she said. 'There are still opportunities there. Our priority still is on our core.'

Kyle Skogman, president of Skogman Homes, estimated that his company has built some 50 or more homes in the ROOTs program in the first three rounds of funding and is continuing to build in Round 4.

He said the homes built in Round 1 of funding, for the most part, also were built in new housing developments on the city's outskirts because the federal funding for replacement homes arrived before the city's flood-recovery buyout program had gotten going. Eventually, flood-damaged homes in the core of the city were bought out and demolished with the resulting vacant lots outside of the 100-year flood plain made available for new construction.

At that point, the City Council then required that all the ROOTs money be spent in the flood-hit neighborhoods. Along the way, the council modified the requirement to allow ROOTs money to be used in core neighborhoods that had not been flooded.

According the city, 182 residential units were built in Round 1 of funding, 256 in Round 2 and 176 in Round 3 with 190 expected to be built in Round 4.

City Council member Scott Olson on Tuesday said local Realtors expressed some concern about their ability to sell existing homes in the $150,000 price range outside of the core of the city as ROOTs homes in the same price range were going up there with attractive down payment assistance. On an annual basis, the city has been tracking the impact of ROOTs home on the larger real estate market, and Olson said it is 'probably time' for the program to draw to a close this year.

At the same time, he said there is no doubt that ROOTs program has transformed and revitalized the city's flood-impacted neighborhoods in a way that would not have happened without it.

Olson said he's attended many a ribbon-cutting at a new ROOTs-supported home and he said most of them have been purchased by young families. The young children in the families have repopulated the Harrison and Taylor elementary schools on the city's west side that were facing closure after the flood as homes were destroyed and the population scattered, he said.

'It's brought new life to these neighborhoods besides providing the housing we needed after the flood,' he said.