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

Proposed, 81-home Sugar Creek development next to Ellis Golf Course has City Council asking: Will requested incentives really provide affordable housing?

In City Hall on July 1, 2009 at 9:16 pm

A proposed 81-home development called Sugar Creek across Zika Avenue NW from the Ellis Golf Course was set aside for now by a City Council concerned last night that it was being asked to give big incentives for what really is market-rate housing.

The council has been willing to provide city incentives on projects that address the city’s need for affordable housing, a need exacerbated by all the affordable housing lost in the June 2008 flood.

However, most on the council last night were unclear how the plans of developer Darryl High, president of High Corp. of Cedar Rapids, met the affordability criteria. Only 20 of the 81 homes, which will be “rent-to-own” ones, clearly met the standard, some council members said.

High is seeking $2.5 million in incentives or $31,000 a home. Part of the money will go to him to help install streets and other infrastructure and part of the money goes to the builder to buy down the buyer’s cost of the home.

The council also noted that the city hasn’t identified a funding mechanism to pay for the incentives that High is seeking.

The state of Iowa only recently agreed to fund down-payment assistance for 177 new homes in Cedar Rapids in an amount equal to 30 percent of the cost of the home or up to $60,000.

The city is applying for a second round of that state disaster funding, and High might be able to qualify if it comes through, Marty Hoeger, the city’s real estate development coordinator, reported to the council last night.

Council member Chuck Wieneke said most of the High Corp. proposal seemed to him as if the city was being asked to subsidize a typical, market-rate housing development. He said it would be a terrible precedent to set and might open the City Council up to paying for infrastructure and other help for every new housing development that comes along.

Wieneke informed his council colleagues that the City Planning Commission turned down the Sugar Creek’s site development plan last week on a 4-3 vote because of concerns about water runoff and the density of the proposed development.

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