Marion seeing boom in multifamily housing

MARION — The city of Marion will see hundreds of new multifamily apartments built in the next few years, with several large projects already under construction.

Among those are:

Tom Treharne, the city’s community development director, said diversifying housing in the city of 40,000-plus residents is essential for its future growth.

The Gazette spoke with Treharne about the new multifamily and affordable housing in the city and what the future holds.

Q: What is the current state of multifamily housing in Marion? What will it be in a few years?

A: We’ve seen a big uptick in multifamily housing, and I think that has to do with costs. We’re looking at adding around 500 units in the next few years. That hasn’t happened in Marion in a long time.

With the increase in land costs and the ground being farmed, (an acre) is going for between $40,000 and $50,000. That’s driving lot prices. The market is responding and saying affordability in homeownership is going down and that’s showing.

Q: How do developers decide on where to build multifamily housing?

A: Well, it's interesting. In a lot of our higher density development, we like to ensure they are close to other commercial/retail establishments.

Right now because of the cost of construction, you don't see a lot of 100 percent market rate projects going forward. They almost always have to have some tax incentive with them. They have to be only so far from a grocery store, bus stop or retail center.

A lot of the reason you see those (projects) in the core of the community, it's because of requirements established with those tax credit programs.

Additionally, as we plan the city, it's important to have a mix of housing options. If you look on the northeast side, we have a (neighborhood) plan at Indian Creek. We have single- family homes, apartments, we've even got commercial mixed use. It's almost taking that Uptown area and trying to recreate that on the edge of town.

Q: Is there a way the city is able to measure demand for multifamily housing? How do you do that?

A: Most cities try to do housing needs assessments every few years. You need an updated one for state programs. If developers want tax credits, they have to go to the city and prove there's a need. Ours is beyond the five years.

At the last council meeting, we've secured a contract with Maxfield Research to do an assessment so that process is starting right now. It will help us support applications, and it's a marketing tool.

We can show we have needs to fill in certain areas, or it can show us we have a significant gap in affordable units, which is true. We need affordable housing.

Q: More specifically, what's the state of affordable housing in Marion currently? And how is the city trying to add more in the future?

A: It is strategic. Right now, it's hard because our data is old, and that's one of the primary reasons to get the housing assessment established. Once that is there, we can establish policies around the needs.

The city is very supportive of the tax credit programs (for developments), and we've supported them with some tax increment finance districts and urban revitalization to encourage those types of projects. That’s been our primary way of supporting them.

With (federal pandemic money) from the American Rescue Plan Act, we presented options to council that included $500,000 be set aside to acquire ground for affordable housing.

And then we've also set aside dollars in that spending plan specifically for single-family home rehab, similar to the PATCH program. That's a way to hit that affordability. Being able to support owner-occupied rehab is a way to keep folks in their homes and that existing housing stock is upgraded as well.

Q: How does the city fight negative connotations around the term ‘affordable housing?’

A: It’s really such a misunderstood term whether you use affordable housing or workforce housing. There is still a perception as soon as you say “affordable” that the income levels are going to be such that there's going to be problems.

That's a shame. I think it falls back to a lot of folks growing up and seeing Section 8 and state-run programs.

What (cities) have done to respond to some of those failed projects is they do a mix of income levels. There's this assumption that when it's going to be an affordable project, it's not going to look good. The state has really upped the standards.

Cities have a hard time dedicating the resources and folks to housing situations because until you're 50,000 population, state and federal (governments) don't provide dollars to the city as a recourse. Cedar Rapids gets dedicated funding sources for their housing folks.

We’re 41,000, and we have just as many housing issues with a community with 60,000. We’re stuck figuring things out on the fly sometimes.

As community development director, I'm trying to push us forward to be more engaged in the housing markets. My hope is that we come out with an action plan and committee as we grow toward 50,000, so we have a head start so we can address more of those affordability measures.

I think overall in the metro area, there's a lot of work being done to address affordable housing.

In the next six to eight months, there will be a lot more conversation going on and policies, resources to fill some of the gaps in the community.

Comments: (319) 398-8255; gage.miskimen@thegazette.com