Housing & Homeless Needs Assesment: Housing Needs Assessment:
In 1996, owner-occupied units made up approximately 46% (10,802 units) of the total housing stock in Iowa City compared to 72% for Iowa and 67% Nationally. In 1990 the Census showed that low-income households comprised 23.7 percent or 2,337 units of all owner-occupied units in Iowa City. Of the low-income owner-occupied households (2,337), 1,480 or 63.3 percent are non-elderly. The HUD data compiled does not separate the non-elderly households into small and large related as it does with rental housing.
When homeownership opportunities arise for lower income groups, it is generally for an older home that is likely to be in need of repair. The City's Housing Rehabilitation program assists first time and existing low-income homeowners. The City’s Combination Mortgage/Rehabilitation Program (COMBO) allows purchasers of older homes to incorporate rehabilitation costs into their first mortgage. This allows the homeowner to pay the costs of rehabilitation over the entire term of the mortgage.
Accessibility is also an important need addressed by the City’s rehabilitation program. Many persons who are disabled cannot afford to make the necessary modifications to their homes. As a result of the medical services and human services available in Iowa City, there are a large number of households in need of this type of assistance.
In order to assist potential homebuyers, several banks and real estate agencies planned and conducted homebuyer’s educational seminars. The seminars were targeted to first time homebuyers and focused on issues such as budgeting, credit and available assistance for lower income households.
In order to buy a home, many lower income households work with local lenders to access the State's Individual Housing Assistance Program (IHAP). In FY98 IHAP provided 54 grants to low income households at an average of $1,965 per grant. Through the first quarter of 1999 IHAP has provided downpayment assistance in excess of $200,000. The average per transaction is $2,031. Mercantile Bank operates a grant downpayment assistance program for first-time homebuyers in Iowa City. The City currently administers a loan program for downpayment assistance. Unlike the Mercantile program, any homebuyer may utilize the City’s program. Both programs use HUD income guidelines to determine applicant eligibility.
The need for emergency assistance for mortgage foreclosure prevention and utility payments was mentioned several times at the public meetings. There are lower income households that need assistance on an intermittent basis to pay outstanding bills that may prevent them from losing their homes.
As a result of Iowa City's expensive housing market, households have turned to other housing options. For instance, the number of manufactured homes being located in Iowa City and Johnson County greatly increased from 1980 to 1990 (43% and 50% respectively). Since 1990, the number of mobile homes located in Iowa City has remained fairly constant due to offsetting mobile home park closings and openings. There are currently an estimated 1,300 manufactured housing units in Iowa City or 5.8% of all housing units, compared to 6.0% statewide and 9.2% nationally. Although manufactured housing parks in Johnson County are expanding, the vacancy rate remains very low.
Due to the successful housing market in Iowa City, developers and contractors have concentrated on building single-family homes in the $150,000 to $350,000 price range. According to 1998 building permit statistics 52.5 percent of new homes fell in this category. This type of home helps to maximize the builder's return on investment. During the last two years there have been 264 single-family homes built in Iowa City alone. However, at an estimated average sales price of over $150,000, very few of these homes are affordable to households with incomes under 80 percent of median. There is a need to build homes in the $70,000 - $100,000 range, or lower, that are affordable to households between 50% - 80% of median income. To accommodate this need, there have been several higher density and condo developments undertaken.
According to the 1996 Special Census, Iowa City's owner-occupied housing stock consists of 10,802 units. Of this number 54.5% or 5,882 units were constructed prior to 1970. Housing that is about 25 years old begins to need some type of rehabilitation. These units were built before many energy efficiency measures and building codes went into effect. The needs of these homes may include insulation, weather-stripping, furnaces, window replacement, and other energy efficient measures.
Using 1990 Census data we estimated that approximately 2,337 units located citywide are owned by low-income residents. These homeowners are eligible for the City's Housing Rehabilitation Program (including accessibility). The Housing Rehabilitation program assists between 30 and 40 households annually and continues to have a waiting list for assistance. Johnson County has recently completed a countywide housing need assessment that estimated that as many as 40% of homes in the county are in need of rehabilitation. The East Central Iowa Council of Governments (ECICOG) applied for State housing funds to be used for housing rehabilitation in Johnson County.
The Small Repair Program, operated by Elderly Services Agency (ESA), handles approximately 65 inquiries annually. There is currently no waiting list for this program. Accessibility improvements, including major renovations, are a very important aspect of ESA's program. The program needs to be expanded to assist elderly, and low-income residents throughout Johnson County.
These two rehabilitation programs are essential in order to assist low-income households maintain a decent, safe living environment. Without the rehabilitation programs the City could lose a significant number of housing units now occupied by lower income households and many homeowners could lose their homes.
a. Elderly, Small and Large Related Households
Table II.1 shows that there were 484 owner-occupied households between 0-30 percent of median income (234 elderly and 250 other). Of these, 68% experienced some type of housing problem, 66% had a cost burden greater than 30% of their gross income and 39% had a cost burden greater than 50% of their gross income. Since the incomes of these households are so low (under $19,000), it is not surprising that they experience a cost burden or severe cost burden.
Figures also show that there were another 554 households between 31-50 percent of median income (280 elderly and 274 other). Of these, 36% experienced some type of housing problem, 35% had a cost burden greater than 30% of their gross income and 11% had a cost burden greater than 50% of their gross income.
Last, Table II.1 shows that there were 1,299 owner-occupied households between 51-80 percent of median income. Of these, 36% experienced some type of housing problem, 34% had a cost burden greater than 30% of their gross income and 1% had a cost burden greater than 50% of their gross income.
b. Non-elderly Single Persons
The number of single owners is not possible to determine by using the data that is available. Given the high cost of housing, a single wage-earning household would need to have a significant income to afford a home. If this household could afford to purchase a home they would probably not qualify for any housing assistance programs because their income would be too high. Experience suggests that the number of low-income, non-elderly single-member households is probably low in Iowa City.
As with the renter households, the foremost problem facing homeowners is the cost of housing, although the problem is not as acute. Maintenance and upkeep of homes may be another problem made particularly harsh for homeowners with low income. These households may be elderly persons on a fixed income that cannot afford maintenance and major repairs, or they may be families that have been able to purchase an older home but cannot bear the often times burdensome expense of maintenance. In either instance, housing rehabilitation and accessibility are significant issues, both in order to sustain the housing stock and to enable elderly persons to remain in their homes safely.
Homeownership opportunities for low-income persons are not especially prevalent in Iowa City due to cost and need for repair of older properties. There is an interest in and need for programs designed to assist low-income households. There are several affordable housing programs offered by local financial institutions and they are being well used by a number of lower income households. Similarly, the IHAP program is used by residents in Iowa City and statewide. IHAP has been exhausting its funds before the end of each year due to the increasing demand. In addition, the number of persons attending Homebuyers Educational Seminar shows that there is a strong interest in homeownership opportunities. Finally, there were several comments received through the CITY STEPS citizen participation process expressing the need for affordable homeownership options.
One outcome of this public input has been the Combination Mortgage/Rehab Loan Program for Homebuyers in Iowa City. The COMBO program allows rehabilitation costs to be included in the mortgage on a home at up to a 95% loan to value ratio. As of June 1999 five lenders were participating in this program. Another outcome has been the City’s and Mercantile Bank’s downpayment assistance programs. Both of these programs assist low and moderate-income households make the downpayment on the purchase of a house.
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