MEDCO to seek $1.5M in state funding to bolster Marion’s entry-level housing stock

MARION — Marion city leaders hope to expand on the preliminary success of a COVID-era housing program by enticing the state to invest $1.5 million into a pilot program to help “regenerate” the city’s housing stock.

Led by staff from the Marion Economic Development Corp., area officials next month will pitch the program to the Iowa Economic Development Authority. If successful, MEDCO intends to use those funds to jump-start a permanent housing revitalization fund.

That fund would then be used to promote “strategic investment” into the city’s existing housing stock through the repair or renovation of homes within the city’s oldest neighborhoods and through infill development.

“Communities across Iowa — across the country, really — have an issue” with workforce housing shortages, said MEDCO President Mark Seckman. “Our strategy here is to provide a blueprint that can be replicated anywhere in the state.”

While Iowa has statewide programs that incentivize multifamily rental projects, Seckman said fewer options exist with a more dedicated focus on owner-occupied, single-family workforce housing.

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MEDCO’s proposal aims to fill that gap by focusing on the revitalization of Marion’s existing housing stock via the rehabilitation of existing households and the acquisition and development of infill and/or rental lots.

Seckman said the proposal was borne from discussions with area employers — many of whom have reported a lack of entry-level housing as a key concern when it comes to workforce recruitment in and around Marion.

“In general, you think about your young professionals: Your medical technicians, your teachers, nurses (or) firefighters. Whatever it may be, the question is ‘Where can they afford to buy their first home?’,” Seckman said.

It presently costs upwards of $450,000 to build a new home in Marion, which Seckman pointed out typically falls outside the price range for working professionals in roles with annual salaries between $52,000 and $63,000.

But costs decrease when you look at the acquisition of a preexisting property or an infill development. The housing revitalization fund, Seckman said, could be used to ensure such opportunities are available to new and current residents.

The fund could be used to help upgrade existing homes, purchase and renovate additional properties and/or support infill development focused on meeting the needs of first-time homebuyers.

If the money was used to purchase a property outright, any revenue generated upon resale would then return to the housing fund itself — offering long-term financial support even after the expenditure of any state-allocated funds.

The pitch expands in some ways on a COVID-era housing program funded through the city using $530,000 in American Rescue Plan Act Funds. That program — run in partnership with the Housing Trust Fund for Linn County — began in the fall of 2023 and focused on helping low- to moderate-income households with home repairs.

Assistant City Manager Kim Downs said that program will have supported improvements to 26 Marion households by the time it concludes this spring with projects running from window and/or siding replacements to more extensive work such as foundation repairs or HVAC replacement.

The program had the obvious benefit of helping residents afford necessary home improvements, Downs said, but it also means that if or when those homeowners choose to sell the property that it will be in a better condition to attract new residents.

The city’s “comprehensive plan talks about the need for more housing, but more specifically the need to establish sustainable neighborhood life cycles,” Downs said. “We have a lot of aging housing stock (in Marion), but we still want to preserve those neighborhoods’ vitality.”

If the goal of the ARPA program was preservation, Downs this week told Marion City Council members that MEDCO is looking to take the next step toward housing “regeneration” through the revitalization fund.

Later this month, the council will vote on whether to issue a letter of support for the program to accompany MEDCO’s pitch to the IEDA and discuss if doing so could lead to the potential need for a partial funding match.

The meeting with the IEDA will then take place in early February, after which a waiting period will likely ensue as the proposal is considered. Should state funds not be awarded, Seckman said MEDCO will have to reevaluate the program to identify potential means of moving forward at a reduced scale.

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