City officials are trying to salvage some of the homes damaged by flooding in Cedar Rapids, Iowa, in 2008 by offering them to builders and nonprofit groups for free.
In exchange, the homes would be renovated and sold at a 15 percent profit margin.
Officials hope to save some of the 476 “least-badly” damaged homes among about 1,200 buyouts. Eighteen builders and contractors and three nonprofits have identified 100 homes they’re interested in obtaining. The 21 qualified bidders submitted a total of 564 requests for those 100 homes.
The bidder with the highest score, based in part on experience in disaster renovation work, was awarded a home for which more than one bidder was competing. A few of the homes were desirable enough that their owners have dropped out of the city buyout program.
Executive director Jeff Capps of Cedar Valley Habitat for Humanity said only 10 of the 15 homes his organization has been awarded appear to be buyout candidates.
“But we feel pretty good about the 10, and we’re ready to tackle them,” Capps said.
Under the giveaway-for-renovation program, once the city buys out a home it will notify the developer, who has 21 days to submit a renovation plan. The renovation must be done within 60 days, with the home sold to someone who owns and occupies it within a year.
Flood victims who owned the home previously and were bought out have right of first refusal in the sale.
The city will post on its Web site for seven days any of the 476 homes once they are bought out and headed to demolition. Any qualified bidder can then rescue a home from the demolition list for renovation and sale.
Private bidders include Allen Connerly, owner of Connerly Construction, who has been awarded two homes, and builder Jim Sattler, owner of Jim Sattler Inc., who has been awarded 21.
Connerly said he has done home renovations for the city for years and is used to programs that limit the contractor’s profit margin. He also said he has bought three flood-damaged homes, renovated them and resold for a profit in the 30 percent range.
Some are concerned the giveaway program will flood the housing market.
Kyle Skogman, president of Skogman Homes, which has been awarded three houses, suspects that fewer than 100 homes will get renovated under the program, once the city buys them and builders get inside to see the damage.
“If the number drops to 25, that’s manageable. Fifty may be fairly manageable. If it’s up to 100, it could be a little bit of a market problem,” Skogman said.
Online: http://www.cedar-rapids.org
Topics Flood Homeowners
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