Atlantic City Council passes housing resolution
February 2nd, 2012 by Ric Hanson
After a lengthy period of discussion, the Atlantic City Council, Wednesday, passed a Resolution of Support for the development of an affordable housing project on the City’s south side. The City’s Finance Committee has discussed the matter twice, and recommended the Council approve the resolution, which does NOT commit the City to any financial package or incentives, but will serve to lower the developers’ operating costs, by allowing them to qualify for Low Income Housing Tax Credit through the Iowa Finance Authority (IFA). Councilpersons Kathy Somers and Shaun Shouse are the Council’s liasons on the Finance Committee. Somers said last night, the developer, Cohen-Esrey, has lowered the construction costs of its planned single-family homes in the area of 22nd and Olive Streets, to $100,000, including the land. That means the homes would cost approximately $88,500, wih an assessed value of $85,000.
The original proposal called for the City to offer, in the developers’ application to the IFA, a level of financial support of up to $160,000, but the Council voted to have the amount of $65,692 written into its resolution, which equates to about $4,105 per unit. The resolution also calls for a 10-year, $65,000 Tax Increment Financing proposal, instead a 17-year Tax Rebate, as originally proposed. A number of hoops remain before the City actually commits any funds for the project, including: public hearings, a minimum assessment agreement, and completion of a development agreement.
Cohen-Esrey says if their IFA application is approved, they will move forward with plans to build 16, 3-bedroom, 12-hundred square foot, single-family homes. Somers says studies have shown Atlantic could use some more Low Income Housing. Councilmen Dana Halder and Steve Livengood expressed concern about the quality of the homes…their energy efficiency and the types of studs used, for example…especially in light of how much they will sell for. Many questions still remain about the details of the construction elements, but one thing is known: the homes will be built on concrete slabs, and will not have basements, because of water drainage issues in the area.
Somers said the idea behind the project is that the homes will be rental properties for 15-years, but at the end of the 15-years, the homes will be sold. The renters will contribute $50 each month toward a maintenance fund/downpayment on home ownership. In 15-years, the renter could buy the home for about $65,000.