Walk through most any Iola neighborhood and you’ll invariably find a “for sale” sign, perhaps a vacant house or two. REAL ESTATE has been Brocker’s livelihood for the past 40 years, 35 of which has been at Allen County Realty. Brocker, a licensed Realtor, also has served on both the state and national Board of Realtors. BROCKER said he is intrigued by Iola Industries’ announcement they are considering construction of an apartment complex near a proposed grocery store at the old ACH site. BROCKER sees several reasons for the stagnating housing market, perhaps none more than the simple fact many working families cannot afford to buy homes.
As of Friday, a master list of homes for sale in Iola listed 51.
So, is there a housing shortage in Iola?
“There are some empty houses in Iola,” agreed John Brocker of Allen County Realty. “I would not classify that as being totally inaccurate.”
Except, “of those houses that are vacant, most would not suit your average worker; the empty houses tend to be on the lower-end scale,” Brocker said. “They need a lot of TLC. So, to say we have enough housing, I don’t think that’s accurate, either.
“There’s not a lot of choices when people come to town,” Brocker continued. “That 51 houses is for all price ranges. You have $400,000 homes, and some down to $15,000 or less.”
For Jim Gilpin, a local banker and secretary of Iola Industries, an organization whose concern for 60 years has been maintaining a strong workforce in the area, the lack of affordable housing is a definite problem.
“I can say that we have been told by employers in the county that housing is a hurdle they’re struggling to get over right now. Many workers drive into the county to work, and they cannot find affordable housing to permit them to relocate to Allen County.”
Gilpin is unpersuaded by those who claim that Iola, with its store of vacant homes, doesn’t require new housing — that the town can fulfill its obligations to new residents simply by repairing the existing stock.
Both spoke on a wide range of issues affecting the local housing market, which has come once again into focus as developers consider plans for one or more apartment complexes — along with a new grocery store — at the old Allen County Hospital site.
As such, he’s seen his share of booms and busts, here and nationwide.
Iola, and much of southeast Kansas, for that matter, continues to lag behind the state in home sales.
While Kansas home sales have risen by 6.6 percent in May compared to the same period last year, Iola’s housing market remains stagnant, Brocker said.
Since the first of the year, 15 homes have sold in Iola, compared to 21 in 2014. Countywide, 29 homes have closed or sold in 2015, compared to 29 last year.
“For a community our size, we’ve been tight on sellable housing, at least for the past three years,” Brocker said.
Mere vacancy, said Gilpin, doesn’t always make a home a candidate for tenancy. There are any number of reasons why a home remains dormant.
“As a banker” — Gilpin’s day job is as president of Community National Bank — “I can testify to the difficulty of obtaining home loans [in the current, tightly regulated lending environment]. So that’s one reason we have so many empty houses and that the demand for rentals is up, because even well-to-do-people don’t qualify for loans anymore.
“Secondly, we have houses around here that are in foreclosure, which means they’re empty until that gets resolved.
“And then we have housing around here that people ask too much money for, houses that may have delayed or deferred maintenance on it; houses in which the buyer is going to have to go in there and do wholesale remodeling on it to make it acceptable to their standard of living.
“And then you have a bunch of 80- to 90-year-old houses that just flat need to be torn down.”
“I don’t know that we need to go building new houses, because most people can’t afford them,” he said. “But we do need to free up some of the better, older houses we’ve got.”
In every situation in which a successful renovation can be done, Gilpin said, he is for it. But the key to unlocking the county’s housing woes has to involve a multifarious approach. A town can’t succeed depending on one option alone.
A new apartment complex could prompt some older residents who are looking to downsize to find a suitable home, one in which they don’t have to contend with property upkeep, yard work and maintenance.
The key, Brocker stressed, is the new complex must have market-based units, and not subject to income limits, as those in the Cedarbrook Addition on north Cottonwood.
“If the apartments are not tied to income restrictions, you might bring some home sales up in Iola,” Brocker said. “One of our biggest problems is that much of our new development in the recent past has income restrictions. Look at all the new houses in north Iola. Look at the elderly retirement homes.
“There’s a lot of elderly in town — I know, because I’ve talked to them — who would love to get out of their house, but they can’t because of income restrictions,” he said. “That’s been one of our downfalls. Everything we’ve done has been market-restrictive.”
Gilpin is enthusiastic about the multi-family apartment complex scheduled to share the 2-acre site with the new grocery store. And so is Iola Industries, which has offered preliminary backing for the development.
“Iola Industries is willing to test the concept that we need market-based rental property, because all of the rental property to date, since the flood of 2007, has been tax-credit, government-income limitation properties, not market-based properties
“For decades — close to 50 years — we’ve been working on low- to moderate-income, federally subsidized housing. There are units scattered out on the northern part of the community. There are the two high-rises. All those are subsidized housing. So, we really haven’t had much in the way of market-based housing.”
“[The proposed apartments] would be our first experiment investing in multi-family rental property. … Conceptually, we buy into it because it helps restore a neighborhood. It helps eliminate a property area that needs to be repurposed. And, frankly, the idea of having a grocery store on the east side of town — everybody is delighted with that.”
The shape of Iola Industries’ volunteer-led involvement in the effort would be the same as in nearly every project it takes on.
“Just as we did with Cedarbrook, we’ll put our resources into a project that looks like it’s something we can help with, and then get our money back in a reasonable amount of time. Our mission, again, is keeping jobs and bringing in new ones — and our perception is that market-based rental housing is very much needed.”
The apartments, explained Gilpin, would be available to any renter who can afford the market rate.
“If it’s a new employee coming to town, whether it’s a doctor or a factory worker, most will look at a rental opportunity, because they have to start work right away. What, currently, is there available to rent? We’ve known for years that there’s very little rental property available in this area.
“If it filled up in 30 days and we had a waiting list, that would argue that we ought to build some more on that same development, that would prove the need.”
“When I first got into real estate, the old rule of thumb was 25-35,” Brocker explained. “You could spend up to 25 percent of your gross income on a house payment, taxes, interest and principle and insurance. Your total indebtedness, adding in cars, credit cards, could not go over 35 percent.
“But what happens when you drive off the car lot with a $35,000 car?” he asked rhetorically. “That cuts into total indebtedness. What kind of house can you pay for if you have a car like that?”
Spending habits also have an effect.
“If you listen to your national news, you have more people wanting to rent instead of own,” Brocker said. “Part of it is the dynamics of our people. Part of it the tightness of credit scores. A lot of people around here can’t meet those to qualify for a mortgage.”
Local employers are not expanding much, and if they are, they aren’t bringing in high-paying jobs.
“The average, two-family household only brings in around $25,000 to $28,000 a year for the average worker at our local industries. “If they have kids, what can they really afford? Our average workers don’t make that much.”
That leads to Brocker’s other old standby for home-buyers
“The other old rule of thumb is you could afford twice your income,” he explained. “If you earned $30,000, you could afford a $60,000 house.”
Houses in that range make up perhaps the biggest dearth in Iola’s market.
Forces at play with Iola’s housing market
