The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

An ‘affordable’ housing project wins Planning Commission approval despite neighbor protests; city might get one of these projects built yet

In City Hall on March 6, 2009 at 4:24 pm

The city might actually see some affordable housing built.

Most of the housing lost in the June flood was old, working-class housing, and many of the residents who lost out were on fixed incomes or were earning moderate to lower incomes.

For that reason, City Hall has been intent on building so-called “affordable” rental housing in the city to replace what has been lost.

In fact, the City Council and the state of Iowa both lobbied Iowa’s congressional delegation hard and successfully to secure additional federal tax credits for the state to help provide funding for affordable housing.

At the ninth-month mark of the flood, the City Council has backed in concept and with local financial support five different affordable housing projects, all designed to use federal tax credits to pay for the bulk of construction.

None of the projects, though, has started.

However, one of the five projects took a big step toward realization this week when it won the City Planning Commission’s approval to move ahead despite strong opposition from neighbors. The City Council now will vote on the commission recommendation.

The latest project calls for the construction of 48 two-bedroom units and 42 three-bedroom ones with affordable rents on 11.2 acres of land east of Edgewood Road south of Williams Boulevard and north of Wilson Avenue SW on property that, in part, used to house Chapman Fun World.

The developer of the Cedar Pond Townhomes is Greg McClenahan, president of EverGreen Real Estate Development Corp., Prior Lake, Minn.

McClenahan addressed the City Planning Commission this week as did a dozen or so neighbors.

One particular strong note from McClenahan: He pointed out that a previous developer – who abandoned a project a few years ago after some grading and sewer work — had gotten all the city approvals to build 128 apartments on the same site. And those units would have been three-story; the Cedar Pond development will have two-story units, he said.

The neighbors centered their objections around water runoff issues and around increased traffic in and out of their developments and on busy Wilson Avenue SW.

One line of reasoning that didn’t resonate with the Planning Commission members was the worry that people living in the new development of “affordable” rental units would lower property values and increase crime.

One objecting neighbor asked the commission “to protect us from these social differences of these people from us.”

McClenahan noted that those who will be renting apartments at his other tax-credit properties are people who work for a living.

Scott Olson, the local commercial Realtor who is one of six partners who own the land, argued to the commission that 90 percent of those who rent apartments in Cedar Rapids have the same incomes as those who will rent one of McClenahan’s units.

Some objectors noted that McClenahan is from Minnesota. He pointed out to the commission that he grew up in Iowa, graduated from the University of Iowa School of Law and practiced law in Cedar Rapids for three years.

He has 11 other tax-credit projects, including ones in Waterloo, Ames and Fort Dodge.

McClenahan has yet to obtain tax credits for the project from the Iowa Finance Authority, the authority said this week.

The authority has noted that there are fewer investors for tax credits now that the economy has taken a tumble.

In the tax-credit program, a private investor provides money upfront for a housing project and then the investor gets its tax liability over 10 years lessened by the amount put up for the project and some additional amount. The project developer then uses the money for construction, which means the developer does not have to take on so much debt and so can keep rents lower than the developer otherwise could. The local jurisdiction usually contributes money to the project as well.

As for the status of other tax-credit project proposals in Cedar Rapids:

One developer has called off one project, which had been proposed for the former chipping green area at the Ellis Golf Course, in the face of organized neighborhood opposition. A second developer’s plans for senior-living apartments on O Avenue NW also has drawn neighborhood fire as well as a cool reaction from the City Planning Commission.

Des Moines developer Jack Hatch’s plans for two new apartment buildings in the Oak Hill Neighborhood are still in the works, though he has not yet secured tax credits from the Iowa Finance Authority, IFA said this week.

A fourth project, the renovation of The Roosevelt downtown, may start by April, the developer said this

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