The countdown has begun for when the first 30 River Valley Homes constructed in 2010 will meet the 15-year deadline for when they will either be sold at market prices or continue to be rented at their current rates.
The development at the former Cedarbrook Golf Course north of town took root in the aftermath of the 2007 Flood that wiped out sections of south Iola. More than 200 residences were destroyed by the floodwaters with many more displaced.
Tom Carlson, a developer from Springfield, Mo., partnered with Iola officials to develop the land with income-based housing.
Carlson used federal tax credits to fund construction of 30 rental homes geared for low- and moderate-income households. Before construction was even completed on the initial phase, Carlson purchased another 29 lots, which became available in 2014. The homes there are referred to as Phase II.
The demand for the lower-priced homes exceeded expectations.
When first built, guidelines mandated a family of four could earn no more than $31,380 a year to qualify for occupancy. Rent for the three-bedroom, two-bath homes was expected to be $400 or less, depending on an applicant’s income. They were picked up almost immediately with occupancy beginning in late 2009.
Income guidelines limit tenants from making more than 60% of the area median income, said Carlson. For Allen County, today’s median household income is about $57,000, of which 60% is $34,000.
The grant’s guidelines for the Phase 1 homes limit rent increases to 3% to 5%, Carlson said.
Average rent today for the Phase I three-bedroom, two-bath homes is closer to $500. The Phase II homes constructed in 2014, average about $560 a month. If on the open market, rent for a comparable home would be about $1,300 a month, said Ivy Vyhlidal, property manager of the development since its inception.
WITH Phase 1, if the tenants do not wish to purchase their homes, the homes will “roll over” for another 15 years into the tax credit program.
“They’re not going to get displaced” for that extended period, said Vyhlidal. Of the 30 original tenants, “a handful remain,” said Vyhlidal.
The purchase terms are attractive, said Carlson.
For every year a tenant has lived in a Phase I home, the purchase price of the home is reduced by 3%
“So over 10 years, that’s a 30% reduction,” he said.
Vyhlidal estimated the homes could sell for $200,000 on the open market.
