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Landlord aid may be more hindrance than help

I’m still working on this story.

A new program meant to help flooded landlords is too restrictive and will discourage participation, some local landlords say.

When Gov. Chet Culver announced the Rental Rehabilitation program, in which flooded landlords can apply for up to $25,000 in forgivable loans for building repairs, landlords greeted the news with enthusiasm.

But the devil’s in the details.

The program is funded with federal community development block grants from the U.S. Department of Housing and Urban Development. As a result, property owners who accept help will be required to rent only to low-income residents, and rent for any two-bedroom unit — even houses — will be capped at $634 per month.

Many landlords have already sunk thousands of dollars into flood repairs and face the added burden of paying for flood insurance. The owner of a two-bedroom home — and many flooded properties are rental homes, not apartments — will want to charge more than $634 per month.

“There are many people that will not be able to participate in the program,” said Mari Davis, who owns rental property and manages rentals for other small-time landlords.

Davis said some landlords won’t be able to recoup their losses, and the program will funnel low-income residents to flooded neighborhoods, perhaps lowering property values and leading ot undesirable tenants.

CDBG rules stipulate that landlords who accept federal money must rent to people who are at 80 percent of area median income or less. Rent can not exceed $634 for a two-bedroom unit, or $898 for a three-bedroom unit.

“The large percentage of rental properties that were damaged by the flood are single-family homes, they’re not apartments,” Davis said.

Landlords have received none of the recovery aid that’s gone to home and business owners affected by the flood.

The new program will change that and is supposed to provide much-needed affordable housing in Cedar Rapids.

In addition to the $24,999 available for repairs, landlords can apply for further assistance — for lead hazard reduction, project delivery costs and temporary relocation. Total assistance per unit cannot exceed $37,500.

Each landlord can get assistance for a maximum of seven units, though state officials are working on a different program that may expand that limit.

Filed under: Flood, , , ,

One Response

  1. Hope the money goes to the “good” landlords.

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