IOWA CITY — In a city struggling with high rents and low vacancies, City Council members are scheduled this week to again give initial consideration to an apartment rental project that would bring more tall buildings to town — four towers of up to 15 stories each.
The proposed development aimed at student tenants is a roughly $180 million project at 12 E. Court St., just south of downtown and near the historic Johnson County Courthouse. The project would replace the much smaller Pentacrest Garden Apartments and complete the Capitol Street right of way.
The first consideration of a rezoning for the property is once again on the agenda for Tuesday’s 7 p.m. Iowa City Council meeting at City Hall.
The consideration has been postponed a number of times this summer, at both the council’s and the developer’s requests. City Attorney Eleanor Dilkes said there isn’t a rule as to how many times a rezoning vote can be deferred.
This redevelopment would come on the heels of a number of other projects around the area that are considered tall buildings by Iowa City’s typical standards.
The Rise, Chauncey and Hilton Garden all dot Iowa City’s skyline at 12 or more stories. Additionally, other major rental housing projects include 7 S. Linn and Hieronymus Square, which are seven stories apiece, among others.
These projects are coming online as Iowa City still faces high rents and low vacancy rates. The average rent in Iowa City — $873 a month — is well above the state average of $715. Even Ames, home to Iowa State University, is less at $835, according to U.S. Census Bureau statistics.
Over the last decade or so, housing reports have shown that vacancy rates around downtown Iowa City are “near zero,” said Jerry Anthony, associate professor in urban and regional planning at the University of Iowa.
“So that shows a very, very tight market with very low supply and high demand,” Anthony said. “The near-downtown areas, the available rental housing, the competition’s very high because you have new entrants into the workforce but all students wanting to live off campus competing for the same few homes.”
Anthony said there are two beliefs when it comes to new high-end developments, which the proposed four-building development would strive to be, according to previous presentations to the council about its planned amenities.
Some believe that simply the addition of any new housing may help drop rents, while some think the addition of high-end housing may spike rent for everyone.
“I don’t think it’s going to make a big dent in the housing affordability, but it’s definitely going to have a small impact,” Anthony said. “I’m more inclined to go with that first school of thought that increased supply is going to lower rents a little bit.”
Gustave Stewart, the UI Student Government liaison to the City Council, said student government generally supports rental housing developments with the philosophy that more housing will reduce pressures on the rental market. He said generally students like to live near the downtown and campus, at a location like E. Court Street, for safer walks home at night or not having to rely on a car.
“You will see those people that already are willing to pay the higher price take those places and they’re out of the rest of market, so generally speaking that’s going to reduce the pressure for other units so they’re less inclined to bid up the pricing for other units,” Stewart said. “Generally speaking, you’re going to see reduced pressure and hopefully a calming down of the general rental market.”
Developer and owner 100-500 LLC, which is controlled by the Clark family of Apartments Downtown, is hoping to rezone the Pentacrest Garden Apartments from a high-density residential zone to a particular Riverfront Crossings zoning that allows for additional height.
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The Riverfront Crossings zoning does come with an affordable housing requirement. Projects must set aside 10 percent of their housing units to be affordable for 10 years, or otherwise pay a fee to be used toward affordable housing within the Riverfront Crossing District south of downtown.
“Those inclusionary units, if they come online, would be good for the affordable housing situation in the city. They would make a dent,” Anthony said. “That is going to make a pretty significant positive impact on the affordable housing market. So all these small things over time would make a big difference.”
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