UniverCity program aims to increase neighborhood diversity

 by Gigi Wood

IOWA CITY – Iowa City and the University of Iowa have formed a rare partnership in an effort to preserve neighborhoods and diversify housing stock near campus.

Known as the UniverCity Neighbor-hood Partnership, the program aims to maintain single-family homes and balance the number of rental units, provide affordable housing and maintain attractive neighborhoods.

“The (2008) flood really brought together the entities, Coralville, Iowa City and the university. We became a lot more cohesive. The flood really gelled us,” said Steve Long, Iowa City’s community development coordinator. “So I guess that’s something positive that came out of the flood, the communication and working together on projects.”

Within the program, the city buys rental homes in neighborhoods surrounding the UI campus, rehabilitates them and sells them at affordable prices with a host of financial incentives to people who agree to keep the houses owner occupied for a set time.


The city secured a $1.25 million grant from I-JOBS, a statewide initiative designed to create jobs, to buy and rehabilitate 25 homes in designated UniverCity neighborhoods.

“For years there has been talk about the plans but not the actual money, there hasn’t been a financial incentive like this,” he said. “It would not have happened without that $1.5 million infusion. Or it may have happened, but it would have happened a lot slower. It would have been one or two houses a year instead of 25 over two years.”

The program also provides affordable rental housing. Funding was approved at the May 10 city council meeting for the Housing Fellowship to buy and rehabilitate six homes to rent to income-eligible households.

“Not everyone that works at the university or anywhere downtown can afford or want to own a house,” Mr. Long said. “So it will give us an opportunity to provide stable, affordable rentals along with the ownership.”

The $408,000 to pay for the homes will come from annual funding from the U.S. Department of Housing and Urban Development.

“Rentals are important, too; it’s part of a college town and always will be, but everyone has a vested interest in having good, healthy, balanced, viable neighborhoods,” said Dave Powers, a rehabilitation specialist for Iowa City’s Housing Rehabilitation department. “The university does, the homeowner does, the cities do, even the college kids do in the long term, so that’s really what we’re striving to achieve to have that healthy balance.”

Application process

Applications were accepted until May 7 for the first three homes available for purchase, at 1207 Muscatine Ave., 517 S. Governor St. and 310 Douglass Court.

“The idea of I-JOBS money is to get people working so we wanted to get started immediately,” Mr. Long said.

Additional applications will be accepted as the city acquires more houses. According to the program’s Facebook page, UniverCity Neighborhood Partnership, which has more than 103 fans, the city last week accepted purchase offers on four additional houses, two in the northside neighborhood and two in the Miller-Orchard neighborhood.

Eligible applicants must be pre-qualified for a mortgage and gross household income must fall within set income limits. Households of one to two people must not earn more than $60,800, while those with three to four people must not make more than $69,920. Limits for larger households are posted at www.icgov.org/univercity.

Other requirements include that the home must remain affordable and owner-occupied for 10 years. If the homeowner stays in the house for five years, the renovations are free.

Four financial institutions – MidWestOne Bank, First American Bank, Hills Bank and Trust and the UI Community Credit Union – created a $1.5 million lending pool for the city to buy the properties. The banks provide below-market rates on purchases.

“We buy the homes and we renovate the homes using I-JOBS funds and we can put up to $50,000 per unit,” Mr. Long said. “We sell the home to an income-eligible buyer for the same price we paid for it plus some carrying costs like the interest charged by the lenders, lawn mowing and utilities.”

Carrying costs are estimated at $3,000. The UI awarded the program $200,000 to provide UI faculty and staff with $5,000 in down payment assistance, which is forgivable after five years if the applicant remains in the home and a UI employee during that time.

There were good reasons for the UI to become a partner, said Sarah Walz, an associate planner with the city’s urban planning division.

“The reason the university cared is there are certain neighborhoods that do contribute to the reputation of the university, particularly the northside neighborhood,” she said. “People see that and associate it with the university, so the university started to care that some properties aren’t being maintained well and there were some safety issues. A couple of years ago there were a number of sexual assaults happening off campus in the neighborhoods and there was also some concern about the condition of the rental housing.”

Applicants are selected for the UniverCity program through a lottery process. Preference is given to applicants who work within the designated neighborhoods, on the UI campus, downtown Iowa or areas with close proximity to the neighborhood where the house is located.

Program origin

The city mapped out rental properties in neighborhoods near campus and identified those under $200,000. Staff sent out letters to the owners of 400 rental houses in high-rental-density neighborhoods to gauge interest in selling and received 80 responses. The city negotiated with the respondents and ended up with the three properties.

“We have to evaluate them to make sure we can bring them up to code and into a decent living condition within the $50,000 we can put into it,” Mr. Powers said. “If a home is too far gone then we would not make an offer on it because we know we can’t do what we need to do with it.”

A committee made up of private individuals, bankers, university and neighborhood representatives and members of local homebuilding and real estate groups helps the city evaluate the homes and provide feedback on the process.

“We set up a time for them to walk through the homes, take a look at the neighborhoods, and evaluate them based on the big picture, what the neighborhood is like, what it could use and have them recommend which homes to make offers on,” he said.

Joan Tiemeyer, executive officer of the Greater Iowa City Homebuilders Association, is one of the committee members. Association members are often hired to rehabilitate the homes.

“Mitigation of lead issues would be one example that can be handled by our (association) members; they have the education and professionalism to handle those types of things.” she said. “(UniverCity) is a great program and a good idea.”

UniverCity is a product of the central district and historic preservation plans, which were approved in 2008 after extensive public forums.

“Residents were asking for ways for the city and the university to go together to encourage reinvestment in the neighborhood and do things to preserve those areas that still had single-family character,” Ms. Walz said.