Four Oaks and its Affordable Housing Network Inc. have been at it for two years now with their ambitious TotalChild housing initiative designed to turn around decline in an 18-block area of Wellington Heights in Cedar Rapids.
To date, the residential program has purchased 80 deteriorated properties, the majority of which are undergoing renovation to resell or to provide improved rental options for the neighborhood.
Now the project is taking a new step it did not think possible two years ago in a neighborhood of declining property values — it is building new homes.
On Friday, Four Oaks and AHNI said they will support the development of four new homes in the 18 blocks where they are working while the local non-profit Neighborhood Development Corp. will build a fifth one.
These are the first new homes to be built in this part of Wellington Heights in some 50 years, Corey Houchins-Witt, AHNI’s real estate development director, said on Friday.
Houchins-Witt said the ability to take a first step to build new homes is directly attributable to AHNI’s work in the last two years to buy and renovate properties.
"I think the impact that we’ve had, securing those high-crime addresses, taking care of dilapidated properties, has stabilized the neighborhood," he said.
Even so, AHNI has had to work to piece together the necessary public and private financing to assist prospective homebuyers who must meet lower-income qualifications, have good credit and be able to secure a bank mortgage.
As importantly, the new-home construction effort requires pioneering homebuyers like Josh and Alyssa Hulme to be willing to take on a mortgage in an uncertain neighborhood housing market with no guarantee that property values will increase.
"There’s always risk in any investment," Josh Hulme said.
At the same time, the new-home program is allowing the Hulmes — he’s 20, she’s 22, and young son Silas, two and half months — to buy a new home at a remarkably young age.
Skogman Homes will build their new two-story, three-bedroom on a lot owned by AHNI at 1402 Fourth Ave. SE. The home has been designed to fit into the neighborhood.
But for the new-home program, Josh Hulme, who works as a member consultant for Collins Credit Union, said it might have taken five to ten more years for his wife and him to save enough for a down payment on a home.
Alyssa Hulme recommended that other families follow their lead.
"I think it’s a great opportunity for families and for young couples wanting to have a family," she said. "Being a new homeowner is a great benefit."
The foray into homebuilding in Wellington Heights is being propelled by Cedar Rapids city hall and its flood-recovery, home-replacement program called ROOTs.
ROOTs uses federal disaster funds to provide an attractive incentive to homebuyers — it pays 25 percent of the cost of the new home — who meet lower-income guidelines and to provide some support to homebuilders willing to participate in the program
To date, the ROOTs incentive program has provided help that has put 534 households in new residences in Cedar Rapids, with 118 more homes now under construction. In total, the city has federal-funding support for 845 units.
Even so, AHNI’s Houchins-Witt said the ROOTs incentive on its own has not yet been sufficient to convince homebuyers and builders to dip their toes into AHNI’s 18-block area of focus in Wellington Heights. Thus, additional incentives from other grants outside the TotalChild program also are helping to enable the Hulmes to buy their new home, which will cost up to $150,000 to build, for $85,000 plus closing costs.
Houchins-Witt said the Hulmes and others who step forward to buy a new home are risk-takers, but AHNI’s neighborhood improvement effort around the Hulmes should guarantee that their property value and the value of properties around them increase in the years to come.
"Ten years from now, they will enjoy some nice equity by taking a chance on this program," Houchins-Witt said.
He said program hopes to identify four other families who qualify for the housing-assistance funding and agree to a mortgage on a new house on one of four vacant lots — at 1542 Bever Ave. SE, 1707 Washington Ave. SE, 1419 Fifth Ave. SE or 1508 Sixth Ave. SE.
Kyle Skogman, president of Skogman Homes, said his company has built perhaps 70 of the new homes in the city’s flood-recovery home-replacement program in Oak Hill in southeast Cedar Rapids and in the flood-damaged neighborhoods in northwest and southwest Cedar Rapids. Two years ago, when Four Oaks and AHNI announced their new initiative in Wellington Heights, Skogman said it was too early to build new homes there.
"It would have been hard to find people to have confidence to buy new homes in that area because of all the problems," Skogman said. "Now, you’re clearly seeing a change in the neighborhood since the renovation program instigated by AHNI started."
In first months after the city’s historic 2008 flood, Skogman stepped forward to say he would use a previously unused city incentive program to help build replacement homes in Oak Hill, another core neighborhood in decline where builders had not been willing to build.
About 30 new Skogman homes now are in place in Oak Hill, and property values in that neighborhood now are on the rebound, Skogman said.
"We’re in a position and we want to help in Wellington Heights," said Skogman. "We want to see this thing work. I don’t know where it stops if you don’t get your arms around it as a community."Four Oaks is in the middle of a $6-million capital campaign for its TotalChild program, some of the money of which is used for the purchase of dilapidated houses and their renvoation and some for direct services to children. Skogman is co-chairman of the capital campaign.