The cost of limited affordable housing has dramatically outpaced wages, and local families cannot keep up. That’s the overwhelming consensus of area leaders who feel the nation’s housing crisis has hit individuals in the Corridor hard in recent years, especially after the COVID-19 pandemic and natural disasters like the 2008 flood and 2020 derecho. “Individuals […]
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The cost of limited affordable housing has dramatically outpaced wages, and local families cannot keep up.
That’s the overwhelming consensus of area leaders who feel the nation’s housing crisis has hit individuals in the Corridor hard in recent years, especially after the COVID-19 pandemic and natural disasters like the 2008 flood and 2020 derecho.
“Individuals just cannot afford the cost of rent or owning a home,” said Heather Harney, regional housing director at the Hawkeye Area Community Action Program (HACAP). “That happened on the coasts 10 years ago. It has happened [here]… probably more quickly than we were prepared to handle. Wages aren’t keeping up with the pace of inflation. Even though wages have gone up a little over the last two years, it’s still not enough.”
Since 2019, rent has gone up 3.5% in Johnson County and 5.5% in Linn County, according a Washington Post analysis. The problem goes back further. A 2022 affordable housing action plan from the Iowa City Council found rent increased 11.3% in Johnson County from 2014-2019.
U.S. Census Bureau projections show Coralville, Iowa City, North Liberty and Tiffin are all expected to see population surges over the next 25 years, with city officials predicting more than 8,800 housing units will need to be built in the metro area (including 4,500 in Iowa City) to meet demand. However, the last two years marked the lowest number of single family lots produced in Iowa City since 2010.
But while there may be a lack of affordable housing for some households in the Corridor, there’s no shortage of mission-based organizations looking to help struggling families.
Making a difference
In Johnson County, the Housing Trust Fund reviews applications from nonprofits, private developers and landlords to preserve or create affordable housing. In operation since 2004, the Housing Trust Fund has committed $12 million to affordable housing and created or preserved 1,000 units. Every $1 invested yields an $8 return, says Executive Director Ellen McCabe.
Some groups focus more on advocacy and partnership to generate a consensus and push for funding and policy change. The Johnson County Affordable Housing Coalition fights for annexation and zoning changes within cities, laws that protect renters, fair housing protections and advocates for increased funding and direct subsidies for people.
HACAP serves nine counties in Eastern Iowa by operating their own housing units for near-homeless households. They also work with community shelters to pull homeless people off prioritization lists in a process called rapid rehousing. Veterans who enroll in Operation Home Program receive case management services, connections to veteran benefits and financial assistance.
Other organizations, like Inside Out Reentry Community in Iowa City, helps formerly incarcerated individuals returning to society handle the challenges that come with finding employment and housing.
In Linn County, the Affordable Housing Network manages and owns more than 800 properties designed specifically for low-income individuals. Under the Four Oaks umbrella, they also provide rental assistance through grants from the Iowa Finance Authority, leverages its financial empowerment program to help people with bad or no credit and allows tenants to participate in a homeownership incubator program.
All the organizations agree education plays a critical role in helping individuals navigate a tricky environment, whether that is through financial literacy training, substance use treatment meetings, mental health support groups or sharing community resources to connect families to the right organizations.
Cost-burdened households are defined as paying 30% or more of income on housing costs, while severely cost-burdened individuals pay more than 50%. Nearly one in five people in Johnson County fall into one of these two groups, according to Ms. McCabe.
“The housing wage, or the money you have to earn to afford a modest two-bedroom apartment, is almost $20 an hour,” said Sara Barron, executive director of the Affordable Housing Coalition. “There are a lot of people in our community who work entry level positions, service jobs, in our schools, our banks, our health care institutions — people we depend on to perform functions in our community — who cannot afford to live here. If I work minimum wage, and I’m the only income earner in my household, I would need to work three of those full-time minimum wage jobs in order to afford that apartment.”
“Housing conversations can sometimes get bogged down in percentages, area median incomes and ratios,” she explained. “I think it’s much more effective to ask ourselves, ‘if I can only afford to spend $300 a month on a place to live, where can I afford to do that in Johnson County?’”
Local leaders say some members of the community face additional struggles, based on their life experiences, that make housing a uniquely daunting problem to solve.
“Households that are led by Black women are disproportionately affected by eviction,” said Ms. Barron. “They are evicted at a rate that is much, much higher than other groups in the community. We see racial disparities baked in across the board on our housing challenges. We are not on a level playing field for all of our neighbors.”
For others, natural disasters of the last 15 years uprooted housing circumstances unexpectedly.
“We never built our housing stock back up after the 2008 flood,” said Danielle Rodriguez, director for the Affordable Housing Network. “We built housing stock, but they weren’t affordable. Then with the derecho, that wiped out another chunk of those affordable houses. Take those two big chunks … then people are really competitive. Landlords can increase the rent and then you have people that are already on the lower end of the poverty level that have a hard time getting into housing or maintaining it.”
Private equity firms have disrupted the mobile home park industry in Eastern Iowa, but manufactured housing is not the only type undergoing change. According to Ms. Harney, the rental market has consolidated, and that directly impacts the affordable housing market.
“I think locally, the pandemic forced a lot of mom-and-pop landlords to sell their units, so affordable housing units have gone to larger property management companies who have stricter rental criteria,” she explained. “Smaller landlords couldn’t keep up with property taxes and other things because of an eviction moratorium, and they had to sell their assets to stay afloat. There were some pretty good deals around the community for rental units and larger property management companies.”
“It’s very difficult for a lot of for-profit entities to build affordable housing because it’s really hard to finance,” she added. “As a landlord, we know how expensive it can be to rent to high-risk tenants. That’s why you don’t see a lot of for-profit builders doing affordable housing, and if they are, they’re doing maybe four or five units in a 50-unit complex.”
Individuals can be denied housing because of previous offenses — even for small offenses like disorderly conduct from house parties, says Ms. Rodriguez — making applicants waste their time and money on application fees.
“We hear horror stories of people spending over $300 on application fees and getting denied every single place,” said Michelle Heinz, executive director of Inside Out.
These types of situations have generated support for the ‘Ban the Box’ movement, which advocates hope would stop employers and landlords from inquiring about applicants’ criminal records.
Local government has tried to help these organizations through funding. Over the last five years, Iowa City has invested more than $9.8 million in initiatives, creating or assisting more than 1,250 affordable homes.
Congresswoman Ashley Hinson announced May 11 that NeighborWorks America awarded $684,000 in grants to affordable housing and disaster recovery initiatives.
But with the cost of supplies still volatile and expensive, and the effects of the pandemic still not evident in data yet, there is hope that innovative building techniques could reduce the cost of housing – resulting in renters and buyers saving money on housing.
A $1.4 million Strategic Infrastructure Program (SIP) grant for Iowa State University’s 3D Housing Project is using 3D printing technologies to lower construction risks, reduce material usage and waste and provide sustainable housing. Pilot homes are set to be built this fall, according to Assistant Professor of Industrial Design Pete Evans at an Iowa Energy Center Board meeting May 12.
Locally, the Shelter House in Iowa City opened Cross Park Place in 2019, housing 24 individuals experiencing chronic homelessness. Thirty-six more apartments will open at the 501 Project at 501 Southgate Ave. under the same model, said Director of Development Christine Ralston. The total project cost is an estimated $6.3 million.
The Housing Trust Fund committed $450,000 to 44 affordable units over 30 years at Coral North Apartments at 2500 Holiday Court, set to open in the fall. They continue to seek American Rescue Plan Act (ARPA) funds from local city councils to fund more initiatives.
Inside Out Reentry is in the process of raising money for the purchase of a short-term reentry house. Within the next year, the nonprofit hopes to buy a four- to six-bedroom house in Iowa City for recently incarcerated individuals to stay until they develop a plan to move forward. Eligible individuals will be able to stay for 12 months before moving on to find a new living situation, said Ms. Heinz.
The biggest way to enact change for families in the region is for Linn and Johnson counties to come together and collaborate on this issue, says Ms. Rodriguez.
“Then we would have more people per capita,” she said. “We are in agreement that we need more affordable housing stock that’s equitable. It’s being able to come together and be a bigger voice at the state level to get more funding to be able to do that.” CBJ