With the City Council’s approval, Iowa City’s plan to help spark development in the South District project area will move ahead with the purchase of its first two properties under the South District Home Investment Partnership Program.

The City Council approved buying a duplex at 1232-1234 Sandusky Drive on July 16. The duplex was built in 1978 and was vacated after a fire on April 17.

Because of the fire damage, the duplex will need to undergo extensive renovation and rehabilitation before being offered to buyers as part of the program. Once renovation is finished, the properties will be sold to income-qualified buyers, who would then receive homeownership education through Horizons and Iowa Valley Habitat for Humanity.

The program details that $240,000 will be allocated to two duplexes, or four units, in the South District Project area. Iowa City Neighborhood Services coordinator Erika Kubly said at the meeting the city was having difficulty finding properties that would suit the program’s parameters. The plan also states that potential buyers must be under 80 percent of the Area Median Income per HOME guidelines.

“This was just kind of a great opportunity that fell into our hands here,” Councilor Pauline Taylor said in the meeting. “It’s a step in the right direction for increasing affordable housing stock.”

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Taylor said she was excited about the program when it was introduced and was disappointed when the city could not find any qualified duplexes.

Kubly said the duplex’s price is $124,000, and up to an additional $60,000 will be allocated for renovation and for down-payment assistance. Federal HOME funds would contribute up to $25,000, and local funds would contribute up to $35,000 of the investment.

To find potential buyers, Kubly said, the city will probably work with the Housing Authority and the Neighborhood Association to reach local residents.

The council voted unanimously to approve the purchase. Taylor said this would be less expensive than building a duplex from the ground up, and Councilor Bruce Teague said two properties for $124,000 sounded like a phenomenal deal.

“Here we have at our fingertips right now an opportunity to help someone become a homeowner, and I think that is phenomenal,” Teague said.

The South District Partnership outlines goals for the project area, including re-establishing a balance between homeowners and renters in the area and encouraging reinvestment in the neighborhood while maintaining its character.

Some councilors, including Taylor and Susan Mims, expressed interest in seeing the renovation and investment funds used in part to make those properties more energy efficient.

“Tonight, I feel like we’ve had a lot of small, beautiful victories,” Councilor Rockne Cole said. “This was so hard to find.”