Affordable housing not affordable

BY PAUL OSGERBY | JULY 22, 2014 5:00 AM

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Correspondence between local attorney Rockne Cole and city staff has been released to the public concerning source funding for five proposed units of “affordable” housing in downtown Iowa City’s newest high-rise, the Chauncey.

“This is essentially 2 percent of the total building cost,” said Cole, a former City Council candidate and co-head of the Iowa Coalition Against the Shadow, a group that has spoken out against the development.

“It’s a waste of tax dollars forced upon working families,” Cole said.

Reports released earlier this month from the Economic Development Committee and Jeff Davidson, the director of City Planning and Community Development, suggest that the city wants to acquire and construct five units of affordable housing for $1 million in the high-rise building.

Affordable housing is defined by identifying local median income and expenses. The federal government has different branches in the U.S. Department of Housing and Urban Development to assist families or individuals that are financially or physically burdened, such as Public Housing subsidies or Section 8 Housing Vouchers.

Eligibility for these programs is need-based, focusing on disabilities, elderly, or responsibility for young children. Applicants must go through thorough criminal background checks.

Funding goes into these Public Housing and Section 8 separately and cannot be mixed.

“It’s comparing apples to oranges,” said Doug Boothroy, the director of Neighborhood and Development Services. “They are two different branches with two different pots of money.”

Boothroy said that funding for the proposed five units in the (at least) $49 million tower would come from the Public Housing funds in Iowa City, which are financed by the federal government.

Downtown developer Marc Moen is spearheading the 15-story project and is asking the city for approximately $12 million assistance through tax-increment financing.

Tom Jackson, the director of the National Development Council, reported to Davidson last month that the project had a total financial gap between the city and developers of approximately $14 million, accounting for the requested TIF assistance.

The remaining $2 million, Jackson’s report said, would be funded by the city through the sale of property and subterranean rights to the developer.

Cole said that the $1 million price tag for all five affordable-housing units is too expensive and unjustly adds even more money to the already $14 million commitment the city has made to the property.

“We agreed to sell these units at well below market rate,” Moen wrote in an email. “These represent about 10 percent of the residential units that area potentially for sale in the building.”

 There is no official developer agreement in place, and the city is still discussing about entering negotiations with Moen, Boothroy said.

“We’re still speaking in hypotheticals,” he said.

The Iowa City City Council selected the Chauncey as its preferred project at the intersection of Gilbert and College Streets last year after roughly a half a dozen groups presented development opportunities for the site.

The decision to make an agreement will be put to a City Council vote. A public hearing regarding the high-rise is set for Aug. 19.

In email responses to the city, Cole asked city officials whether the funding for purchasing the affordable-housing units would come from regular housing sources or alternative sources, such as a federal grant.

“There is a clear a need for affordable housing in Iowa City,” Moen wrote in the email. “The city’s approach is that this housing be scattered and not concentrated in one particular area or in one particular building. I agree with that approach.”

“Incorporating these units in developments, including those in and around downtown, is important in efforts to accomplish that goal,” he said.

As reported in the Iowa City Housing Authority’s annual report for 2014, there are 81 Public-Housing units in the city limits. This represents 0.5 percent of the 17,000 rental units in Iowa City.

According to the U.S. Department of Housing and Urban Development there are 1.2 million Public-Housing units nationwide.

Cole said that he has filed a petition for certiorari with the city of Iowa City in a challenge of the city’s denial of Iowa Coalition Against the Shadow’s appeal to rezone the property so it could not accommodate the high-rise plans.

The Daily Iowan calls seeking comment from a number of attorneys in the City Attorney’s Office were not immediately returned Monday evening.

“Affordable housing is very important for working families in Iowa City,” Cole said. “We will never be able to address the problem like this.”

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