UniverCity gives new life to old haunts

Remember in college when you’d go to a house party in your friend’s dank basement, prop yourself up for that keg stand, take a good look around at the upside-down graffiti-covered walls and think, “Gee, this would make a great nursery?”

Yeah, me neither. But for those few among you who have had visions of domestic bliss for the unlikeliest of houses, you’re in luck.

Iowa City officials, with support from the University of Iowa and a few local banks, have started fixing up run-down rental houses to sell as single-family homes near the UI campus. Called UniverCity, this initiative provides $50,000 of renovations for low to middle-income buyers.

While this initiative has the potential to significantly improve neighborhoods, its indirect effects must be strategically managed, in order to prevent a squeeze on Iowa City’s already tight rental market.

UniverCity, funded from the state I-JOBS program, is partly a response to our skewed housing market. There is enormous pressure for rental housing in neighborhoods close to the UI campus, primarily from its students. Anyone who wants to buy and live in a house in those areas has to compete with would-be landlords and it seems that most potential buyers are finding it difficult. UniverCity wants to level the playing field by offering affordable homes near campus solely for homeowners, particularly for workers at the UI and downtown businesses.

Despite the slow housing market, interest in the program has been increasing. Currently, 10 homes have been acquired, 13 buyers have applied, and two of the three completed houses have accepted purchase offers.

The interest is not surprising. Selling prices are kept low by excluding the $50,000 in renovations from final costs, which range from $60,000 to $189,000. Sounds like a pretty good deal–especially for the 25 people buying a renovated house in a prime location for low dollar–but, you may be asking, why on earth are my state taxes paying for some dude I never met to get a cheap house? Turns out, the effect may go far beyond those 25 homes.

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A main impetus for the program was concern among city and UI officials about the deterioration of some rental units and its effect on the surrounding neighborhoods. According to Jerry Anthony, a UI professor of Urban Planning, those concerns are well-founded.

“Research shows that when urban spaces decline, there is a tipping point beyond which they are beyond help,” Anthony says. However, he believes programs like UniverCity can help “stem the tide” of decline and tip things toward improvement with strategically placed investments.

These potential wide-reaching effects are a big part of the program’s strategy, says Steve Long, Community Development Coordinator for the City of Iowa City, and director of UniverCity. His staff cluster UniverCity homes in areas that are close to a “tipping point,” in order to give a “jump start” to neighborhood improvement. Long has already seen this principle at work as neighboring homes start sprucing up when the UniverCity crews get to work on their block.

This strategy has made the program more appealing to applicants like Gail Falk, who currently rents a home in the UniverCity’s west-side neighborhood. Due to the number of run-down homes, she was initially concerned about buying a home in her neighborhood. However, when she saw the extent of the city’s investment, she became more optimistic.

“They are renovating four other houses on the street and I think that’s going to help. All the time and money they are putting into this will make a difference,” Falk said.

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UniverCity targets neighborhoods where the majority of properties are rented. The program plans to convert several of these rentals to single-family homes in order to create an even “balance” between owners and renters. According to Barbara Eckstein, UI representative for the program, such a balance between rental and owner-occupied properties could inspire better landlord oversight and improve safety. She said owners put “eyes on the street,” and act as a stabilizing force that benefits renters and owners alike.

However, rental housing in Iowa City is in high demand and city officials say vacancy rates remain low. Although UniverCity currently targets only a small number of houses, it still raises the question: If we are taking away rental housing in key neighborhoods, where and how do we plan to add rental housing?

“It’s like putting a puzzle together,” Long says. A city needs to “provide options” for all kinds of rental, single-family and multi-family housing. UniverCity is part of the city’s extensive plan for housing, which includes expanding and improving all options, including rental units.

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Even with those efforts, the infusion of single-family homes into core neighborhoods could complicate the housing puzzle because the displaced rental units have few options for relocation. As Anthony points out, zoning codes restrict the location and quantity of rental housing, which is part of the reason for its high concentration in the first place. UniverCity is creating a better balance in a few neighborhoods, but Anthony recommends the adoption of inclusionary zoning to create balance across the entire city.

Spreading rental housing throughout the city could prove difficult, however, due in part to negative stereotypes against multi-family or rental housing.

“A lot of people…don’t understand why I want to live closer to downtown,” said program applicant Jennifer Kerns. “It’s looked down upon to live close in.” She believes this could be partly the result of negative views of potential downtown neighbors, something she herself has wondered about. Shortly after her first purchase offer, the 21-only ordinance sparked debate about increased partying in her future neighborhood, due to its high concentration of student rental housing. “What have I gotten myself into?” Kerns said.

Though her fears were later allayed, this type of negative press surrounding rental housing can make it difficult for some to accept it in their own neighborhoods, making it hard to “relocate” rental units displaced by a program like UniverCity.

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The low pricing of UniverCity homes could be another source of concern for some Iowa City residents. According to local realtor Dave Biancuzzo, the artificially low prices of UniverCity homes may skew the local housing market, putting open market sellers at a competitive disadvantage. Property owners may also sense the advantage of selling through UniverCity, which could explain why nearly 100 owners have offered to sell to the program. However, in the long term, this program could possibly help open market sellers by raising property values across the neighborhood.

To further complicate the picture, a new vision from the UI could be a game changer for the entire Iowa City housing system. Currently the UI houses only about 20 percent of its students on campus, leaving tens of thousands to flood the rental market. A program like UniverCity is, on a small scale, replacing low quality housing that is intended for students with properties that are geared toward local professionals. Since rental housing is so tricky to “replace,” where do we expect students to live instead? According to some, the answer may be back on campus. UI Vice President of Student Services Tom Rocklin said the university wants a higher percentage of students to live on campus, since studies show that students in dorms perform better on average. Such a move could relieve some of the pressure for rental housing, making programs like UniverCity less of an uphill battle.

UniverCity is one small part in the complicated business of housing the varied and growing population of this university town. In the short term, the program can revive fading homes and improve the look of neighborhood streets. It can provide a few more housing options for our professionals and can keep some building contractors busy during a slow time. In the long term, it can help maintain Iowa City as a community of thriving, diverse neighborhoods. However, we must consider all the pieces of the puzzle to ensure that the pursuit of these goals does not prevent our city from accommodating the needs of any particular group, in this case, students and other renters. UniverCity’s success will depend on how well it coordinates the entire housing system, from UI dorm construction to local zoning codes to picking out the nursery wallpaper.