A proposal to allow low-income individuals the chance to reside downtown in high-rise condos is still being reviewed.
The U.S. Department of Housing and Urban Development will examine a proposal for Iowa City to purchase five high-rise luxury condominiums in the Chauncey for $1 million, which would then be rented out to low-income individuals who are primarily disabled or elderly.
Roughly a year and a half ago, the city proposed to make the property on the intersection of College and Gilbert Streets available for a private developer to build a structure that complied with certain city goals, Iowa City City Councilor Jim Throgmorton said.
The Chauncey, a high-rise building created by the Moen Group, won the bid. Since then, the city staff negotiated with the City Housing Authority to purchase five small condominiums as affordable housing units.
“One of the things that we were urged, as a council, to do by many, many people was to provide incentives for affordable housing within any new development we chose for that site,” Throgmorton said.
Local attorney Rockne Cole has concerns about whether the proposed purchase complied with a federal statue that, he said, explicitly states Housing and Urban Development funds should not be used to provide luxury housing for low-income tenants.
Cole requested that the department take a look at this proposal in order to determine whether it was appropriate.
Throgmorton said he is very confident the city staff members have looked into this and they know whether it is illegal or not.
“The real question is whether the city should spend $200,000 per unit to buy the condos if the new Chauncey structure is built, he said.
Cole said this is his primary concern.
“Is that the best way they can use $1 million for five units? And we believe that it is not,” Cole said. Throgmorton said dispersing affordable housing throughout the city becomes a challenge because housing in downtown comes at a higher cost.
“Land is expensive, therefore new housing units would be expensive,” Throgmorton said. “The staff’s proposal is for us to buy these units at what’s not really an outrageous price. It’s costly for low- income housing, but it’s not outrageously expensive.”
Another issue Cole had with the proposal was that he said the city is targeting the disabled and elderly as tenants.
“One of my first concerns is why would these units be limited only to the disabled and elderly folks; we believe families should also have access to these low-income units,” Cole said.
Throgmorton said the larger the family, the larger the square footage has to be, which means the unit would be more expensive.
Developer Marc Moen said he is a proponent of the city’s attempt to incorporate affordable residential units into developments throughout the city, but this also comes with a price on his side of business.
“We were asked to sell some of the units at Chauncey to the city at below market rate to accommodate affordable housing,” Moen said in an email statement. “While this ultimately adds to our cost of the Chauncey development, I support the city’s efforts, and therefore I agreed to sell a number of units to the city at below market rate.”