In Iowa, Efficient Design Turns a Vacant Lot Into Affordable Single-Family Housing

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In Iowa, Efficient Design Turns a Vacant Lot Into Affordable Single-Family Housing

 

Maquoketa is the county seat of Jackson County, Iowa, and home to approximately 6,000 residents. The city's 2023 Housing Action Plan suggests that the area's housing supply has not kept pace with evolving community needs. The Jackson County 2024 Comprehensive Plan identifies a pronounced need for workforce housing amid rising housing costs. The aging housing stock, dominated by large, single-family detached homes, does not meet the demands of either younger residents seeking smaller homes or older residents seeking to downsize. The Housing Action Plan recommends that the city encourage infill development of vacant properties and work toward creating a varied housing stock "that serves people at all income levels and at all stages of life."

To further these goals, the East Central Development Corporation (ECDC) and the Eastern Iowa Regional Housing Authority collaborated to develop Bear River Cottages. This small community provides 10 affordable single-family homes in a community designed around shared open space and community cohesion.

Designing for Community

ECDC is a nonprofit community development corporation and a subsidiary of the East Central Intergovernmental Association (ECIA). According to Michelle Schnier, director of housing and support services at ECIA, staff were inspired by the Pocket Neighborhood concept, which prescribes clustering groups of houses around a shared open space. Starting in 2015, ECIA set out to develop 10 small, moderately-priced homes that reflected the design philosophy's goal of "creating a small-scale community in a large-scale world," providing an affordable alternative for first-time homebuyers and downsizers. The project was named after the Maquoketa River north of town, which translates to "Bear River" in the language of the local Sac and Fox tribe.

In 2018, Jackson County sold a vacant parcel of land within the Maquoketa city limits for a nominal sum. The 2.3-acre parcel was already accessible by city streets to the north and east, but new streets to the west and south were constructed as part of the project. Civil and environmental engineering students from the University of Iowa designed the infill project as part of their capstone project. The final plan subdivided the site into 11 lots, with 10 residential lots measuring 50 feet by 110 feet each. The remaining lot became a common space with a walking path, a gathering area with a gazebo, and green space that can be used as a playground or community garden.

In 2019, the developers secured financing for Bear River Cottages and began construction. The project faced numerous delays and supply and labor shortages because of the COVID-19 pandemic and a series of intense storms that affected much of the Midwest in 2020. The development team was able to overcome these challenges and complete the project, with the final home being sold in 2022.

About Bear River Cottages

Bear River Cottages consists of 10 bungalow-style, single-family houses. Nine of the homes are reserved for households earning no more than 80 percent of the area median income (AMI), and one home is reserved for a household earning up to 60 percent of AMI. In keeping with the Pocket Neighborhood design philosophy, the homes surround a common courtyard that is intended to promote a close-knit sense of community.

Each home has a gross floor area of 1,064 square feet. Buyers were able to choose from several floor plans (ranging from two to three bedrooms) and selected their own paint colors, cabinetry, siding colors, and flooring material. Each unit has a two-car garage at the back of the home, a front porch, and an unfinished basement as well as LED lighting, low-flow faucets and toilets, and high-efficiency mechanicals and appliances, all of which are included in the purchase price of the home. A homeowners' association, with fees set at $75 per month, provides lawn care, snow removal, and general upkeep services to all homeowners.

Financing

Funding for the $2.6 million project came from grants, tax increment financing, and downpayment assistance programs. Jackson County provided the land for the development, and the city of Maquoketa supplied $432,589 in tax increment financing to support infrastructure development for the project. The Federal Home Loan Bank of Des Moines awarded the project a $200,000 grant through its Affordable Housing Competitive Funding Program. The Iowa Finance Authority facilitated a reduced interest rate on the project's construction loan from Maquoketa State Bank, generating $22,500 in savings. Maquoketa Municipal Electric Utility waived the cost of utility extensions for each house, saving the project $30,000. Additional funding came from the McDonough Foundation, Theisen's, the Iowa Area Development Group, and the Eastern Iowa Association of REALTORS®, as well as Black Hills Energy and the Jackson County Foundation.

The Eastern Iowa Regional Housing Corporation provided $355,675 toward the development, as well as $15,000 in downpayment assistance per home, from its Housing Trust Fund. The Iowa Economic Development Authority provided an additional $10,000 in downpayment assistance per home through the state's Community Development Block Grant program funding. Each home was sold for $150,000, with downpayment assistance programs reducing the cost to finance each home to $125,000. The downpayment assistance programs allowed buyers to avoid purchasing mortgage insurance, and owners who remain in their homes for at least 5 years do not have to repay the downpayment assistance.

A Positive Impact

Bear River Cottages has received several awards recognizing its affordability and community-oriented design. The National Association of Housing and Redevelopment Officials recognized Bear River Cottages with a 2023 Agency Award of Merit in the Affordable Housing category. The project also received a 2022 HousingIowa award in the Single-Family Development category from the Iowa Finance Authority.

Although ECDC does not currently have plans to produce more developments in this style, Schnier noted the positive impact of the development, citing an economic impact analysis that found that the project's construction generated $2.23 million in economic output. Ultimately, Bear River Cottages turned a vacant lot into an opportunity for affordable homeownership that meets community needs. "Not only did this project make newly constructed homes available to 10 qualifying families," said Schneier, "[it] also helped address the workforce housing shortage within the city of Maquoketa."