I serve on the Housing Task Force, the Planning and Zoning Commission, live downtown and am a business owner with an office downtown. I’m writing to reply to your points and add some information for readers. Thank you for your examination and post.
At tonight’s 7pm City Council meeting, I believe the only Housing Task Force recommendation you’ll be presented with is stricter code enforcement. The moratorium and other items follow in future meetings.
Some background on these recommendations
As you noted, we sit with a surplus of rentals at this time. This holds across the board in the neighborhoods most affected: downtown and college hill. In a four year period ending in 2012, there were just under 250 conversions of single family homes to rentals. 90% of these occurred in R1 & R2 zones. UNI is adding supply and many multi-unit complexes just off campus are underutilized, as you said. There is supply, yet there is also a disproportionate conversion of single family homes in spite of this already abundant supply and this is the issue.
Why is this happening?
1. Single family home prices and availability, age of homes (most homes in this area of town were built with a one-car garage, on smaller lots and on streets that are 31 feet wide or narrower, not designed for on-street parking to accommodate all 4 renters and their cars with a safe allowance for emergency vehicles). I agree with regarding getting away from car culture, but I think we offering broader solutions here is also necessary.
2. Landlord rental income. While there’s a surplus of rental options on and just off campus via the multi-unit complexes, landlords are buying (again 250 conversions in 4 years) single family homes and making them into rentals because they are profitable. And the more kids they are able to fit into a property, the more profitable. The State Landlord Association has tried in years’ past to get the legislature to pass a law to raise the maximum unrelated persons allowed in a rental. Currently that number is 4. Last I read, this was being pursued again. The president of the association is a local landlord and attends nearly all of our Housing Task Force Meetings. He has asked us to consider raising this ceiling in the City. I do not agree with this idea. It is profitable for the landlord, but isn’t a viable solution no matter how it’s sliced.
3. Property owner inability to sell home resulting in sale to landlord for conversion to rental. This is obvious and is inextricable from 1 and 2 above.
4. UNI student parent purchases. It’s increasingly popular for parents to take advantage of low interest rates and buy a house, convert it and rent to son/daughter and 3 buddies. Parent-owner may live out of town, albeit likely in Iowa, but if they are out of town, they are required to hire a local ‘property manager’, the likelihood of which could be one item that stricter code enforcement could take on, perhaps. Stricter code enforcement is being recommended to the Council tonight because until recently, health and safety code violations were the focus of code enforcement, in addition to incoming complaints.
What does ‘stricter code enforcement’ really mean? Why ask City Council to vote for it?
1. It allows for the use of city resources to enforce minimum property standards vs. just health and safety violations, which are the current focus.
2. Zoning violations will be targeted.
3. Maintenance issues (mowing, snow removal, trash) targeted.
4. On and off street parking issues targeted.
We are hoping stricter code enforcement is approved.
You remarked with opposition to the moratorium on conversions. This item will be before City Council on August 4. Moratorium is an ominous word. In this case, it is a 6 month freeze on conversions while the City (assuming approval by Council) dons stricter code enforcement. In an already prolific housing market, issuing a temporary ban or moratorium will decrease options for students and renters, yes, but we’ve established that the market (right now) is flush with options, so of all times this is the best time to do so. Some landlords are not happy with this restriction because it diminishes their business opportunity and any business owner would feel the same. However, business owners invested in their communities and who take proper care of their properties, may be more able to see the forest for the trees. They also see the poorly managed properties downtown and on the Hill and if doing their job well, may be in favor of stricter enforcement and decisions made by the city that encourage responsible ownership. We have many landlords who do fit this criteria, they just may not be as vocal.
Part of the reason for the moratorium is to control for X (halting conversions) while we study Y (effects of stricter code enforcement) and also present the City Council (sooner than later I’m hoping) with incentive ideas, catered to conversions in the opposite direction: from rentals back to single family homes. We should be able to accomplish all of this in the 6 months that conversions to rentals are held steady in R1 and R2.
You mentioned a concern regarding this moratorium as a lofty solution aimed at neighborhood balance, worried that with supply down, renters will head to other parts of the city to find available housing. The moratorium is short term, the surplus of housing will not markedly change in the next 6 or 7 months and perhaps now understanding the broader reason for the moratorium, I’m hopeful that this item is also approved by the City Council in coming weeks.
Regarding Incentives, some of which you mentioned: these are extremely important. City staff has already delved into options on this and as a Task Force, we will be looking closely at these. There are significant shortfalls to the CDBG and HOME Funds options: income restriction for purchaser and maximum sale price limited to $138,700, commitment to occupy for 5 years, etc. For someone to purchase an existing rental property that generates significant rental income and likely at a higher sale value and then convert it to single family residence knowing the income limitations and sale price restrictions are unlikely.
Per City staff’s analysis of previous rehab projects, it’s estimated that the cost of converting a four-unit rental structure back to a single family home is between $50K – $75K.
Urban Revitalization and Urban Renewal plans do offer more hopeful options and I’m excited to begin looking at these with the rest of the Housing Task Force soon.
All told, this isn’t an assessment of renters are bad people. The fact is, this is a College town and we enjoy college town advantages. But the number of conversions, especially in light of availability tells it’s own story: excess. And the reasons are listed above.
The way to address this particular rental-excess and ‘take down’ of many of the older homes in the historic section of the city, as well as the Hill, is to look at how we got here, examine ideas and determine effectiveness of action: stricter enforcement, short term halt on conversions, best-practice incentives and who knows what else we may be able to come upon…it’s a great time to be able to look at this issue knowing supply is there to meet need, and that sincere efforts to protect neighborhoods and maintain home values is being honored.
The Task Force is made up of landlords, a UNI Student, UNI employee, realtors, homeowner and myself. Any public support of the protection of the older parts of the city and housing preservation is welcome, as voices in defense of home value is needed.
Thank you for this forum and your service.
See you at tonight’s meeting!