Our View - UI chooses the split-baby option for HVC complex

Printed in the Iowa City Press-Citizen, Jan. 15, 2010.

When people try to split the difference between two options, they often talk about the "wisdom of Solomon." But they usually forget that the biblical king never actually split anything when deciding the case before him. When Solomon offered to split a baby down the middle to resolve a custody dispute, he knew that the real mother would renounce all claims rather than see the child hurt. He then gave the still-intact child to the woman who was ready to make a sacrifice.

When it comes to deciding where to relocate the Hancher-Voxman-Clapp complex (HVC), University of Iowa officials announced Thursday they actually want to go through with splitting the baby -- separating the H from the VC.

For nearly a year, UI officials have been wavering between what we consider two equally good options for relocating the flood-destroyed complex of buildings:

• Moving the facility just up the hill and out of the floodplain from its present location (which would please Hancher's out-of-area and older patrons who want to avoid getting caught up in downtown traffic and safety issues) or

• Moving the facility closer downtown (which would open up a number of possibilities for downtown and near downtown development).

A few months ago, UI officials threw the community for a loop when they announced a third option: Separating the facilities and relocating the Hancher portion close to its current location while moving the School of Music and its performance space to the downtown site.

We can understand why UI officials like the split-baby option. After all, it addresses the concerns of the many music faculty and students who have felt isolated on the arts campus and who prefer being closer to the heart of the College of Liberal Arts and Sciences. At the same time, it ensures Hancher Auditorium will be built on land the university already owns -- meaning that reconstruction wouldn't be contingent on the sometimes lengthy process of buying out private landowners.

The split-baby option became feasible only after UI began drawing up plans for what the combined HVC would look like at the downtown site. That's when they found that the facilities -- while part of the same complex -- still would need to be slightly separated. They then asked and received assurance that FEMA would be open to separating the facilities by a longer distance.

Obviously, the benefits of the split baby option have become more and more apparent to UI officials in the past weeks -- especially after one of the downtown property owners indicated he would be reluctant to sell. And if the Iowa state Board of Regents agrees with the UI recommendation and approves the splitting of the H from the VC, then hopefully the university can move forward without needing to threaten or to use eminent domain.

Downtown boosters, understandably, aren't very excited about the option of placing only the School of Music and its recital hall downtown. They've been dreaming a long time about the economic development opportunities that would follow building a more urban university auditorium. That's why, if UI officials are not going to move Hancher downtown, they at least should develop programming at the new Clapp that would help broaden the cultural opportunities in the downtown area -- programming that will help draw in an evening population very different than the current bar-goers.

It'll take a generation, however, to know if UI officials are displaying the wisdom of Solomon with this decision, or if they're merely pleasing no one by trying to please everyone.

Our View - 'Chicken or egg' questions and flood mitigation

Printed in the Iowa City Press-Citizen, Sept. 2, 2009.

Building a levee at Taft Speedway and No Name Road is one of dozens of potential flood mitigation options being considered by Iowa City officials. The city has applied for community development block grant public infrastructure money for the estimated $10 million project. There is no guarantee, of course, that the money will be approved, and even then, the Iowa City Council still would have the final say in whether the project would move forward.

Jeff Davidson, Iowa City director of planning and community development, said that raising Taft Speedway would allow the city to address two issues simultaneously:

• Provide emergency access to the rest of the Peninsula area. Davidson said about 500 people, whose homes were otherwise "high and dry," still had to be evacuated for nearly two weeks last year after water poured across Foster Road, the only access to their homes.

• Help protect Parkview Church and the 92 residences in Idyllwild. Because those residences are part of a condominium association, Davidson said Iowa City was unable to use federal money to buyout any of the properties unless the owners of all 92 properties concurred.

Unfortunately, the proposal would leave some other property owners -- owners who said "no" to the city's offer for a buyout -- on the wet side of the levee. Davidson said those owners were apprised, at the time they rejected the city's offer, that there could be some flood mitigation project that could leave them on "the wrong side of it." Yet we think those property owners still are right to worry about how the levee would worsen the effect of future floods on their property.

And city officials don't have exact details on what the effect the levee would have on those properties in the floodplain. That level of research and design won't take place unless and until the project receives enough outside funding.

The debate over this specific proposal illustrates "the chicken or the egg" question that comes up with nearly every city project. City staff members don't always have the time and resources to fully research the consequences of a project unless and until there is a good possibility the project will receive outside funding. Yet the city can't really know if the project is feasible politically and of practical benefit until city staff spends the time and money to research all the consequences.

Although city staff keeps saying, "The City Council will make the final decision," it becomes much more difficult to halt a project once outside funding has been secured. Even when the project has clear negative consequences -- as this one would for some owners whose property has been in their families for generations -- the institutional inertia usually is on the side of those working to see the project completed.

If city staff members are successful in securing enough outside funding for this project, the Iowa City Council still needs to proceed with caution and to make sure it's not protecting some property owners to the absolute detriment of other property owners.

Because these property owners rejected the city's buyout offer, we think they should not be eligible for further government assistance if and when their property floods again. But neither should the city take steps to make flooding worse for them.

Our View - Flood insurance still available for homeowners

(Iowa City Press-Citizen "Our View," July 10, 2009)

When a tornado ripped through Iowa City's downtown and some historic neighborhoods in 2006, the devastation was large from a local perspective but relatively minor from a national perspective. The city received no federal reimbursement for its disaster cleanup efforts.

Iowa City Public Works Director Rick Fosse is rightly concerned that a similar imbalance might occur if Ralston Creek ever floods to its so-called "100-year" or "500-year" level. Although many creekside homeowners would be devastated after such a flood -- especially those whose lenders did not require them to take out flood insurance -- the local disaster is unlikely to attract the same amount of federal assistance that poured into the area after last year's flood.

Plus the very nature of creek flooding would make it difficult for creekside homeowners to prepare. Because creeks are more susceptible to flash flooding caused by sudden downpours, homeowners probably wouldn't have time to sandbag or to otherwise secure their property.

That's why we agree with Fosse that homeowners who live in the Ralston Creek floodplain should get flood insurance for their property. Otherwise, they may face personal devastation as bad -- or possibly even worse -- than what uninsured residents of Parkview Terrace and Idyllwild have experienced for the past 13 months.

At the very least, we hope the flood of 2008 has put to rest the widespread mistaken notion that some people aren't eligible for flood insurance. Everyone is eligible, but not everyone is required.

Creekside homeowners, however, also need to recognize that they are as at-risk as riverside homeowners are. The same odds -- and same misleading chronological terminology -- apply to the so-called "100-year" and "500-year" floodplains of creeks as they do of rivers. Although detention basins constructed at Scott Park and Hickory Hill Park in the 1970s have reduced the risk of flooding along Ralston Creek, the risk of flooding has not gone away entirely.

Fosse said flooding along Ralston Creek in 1993 reached levels much less than a 100-year event, but he recommends homeowners to take appropriate precautions:

• Purchase flood insurance and

• Keep valuable items in safe places.

The city, likewise, is performing regular maintenance to ensure that the channels remain unobstructed and the basins don't fill with sediment.

"That's a true statement of any flood control works," Fosse said. "The flooding doesn't go away, it just becomes less frequent. ... We've got 30 years of good experience with the basins. But it is just 30 years."

There also is a flooding risk associated with Willow Creek on the city's west side. But Fosse said because residential development there is more recent, better stormwater drainage has reduced the risk.

Any local residents with questions as to whether their home is in the floodplain should:

• Contact their insurance company and find out what their risk is and how much their premiums would be;

• Visit the National Flood Insurance Program Web site at www.floodsmart.gov.; or

• Come down to the Public Works Department or the Housing and Inspection Departments at 415 E. Washington St. and look through the detailed floodplain maps.

No one -- especially homeowners and city officials -- should fool themselves into thinking that the local structures built in floodplains are completely safe.

Our View - Learning from Idyllwild's past, present, future

(Iowa City Press-Citizen "Our View," June 13, 2009)

On Jan. 23, 1990 -- 3½ years before a so-called "100-year" flood and 18½ years before a so-called "500-year" flood -- the Iowa City Council voted 5-2 to approve the preliminary plat of a then-proposed 20.8-acre, 68-lot subdivision called Idyllwild.

At the time, then-councilors Susan Horowitz and Karen Kubby voted against the measure because of the city's potential liability after a major flood. Then councilors John McDonald, Bill Ambrisco, Randy Larson, Naomi Novick and Darrel Courtney voted to move ahead with the subdivision because the plan called for all buildings to be at least one foot out of the "100-year" floodplain -- which meets all the requirements and floodplain ordinances.

"I think we have a responsibility to look at this information," McDonald said at the time. "But I also feel we have a responsibility to give these people (the developer and the builder) some answers."

The five councilors passed the measure with the understanding that they would deny final approval if new information indicated a danger to people's lives or property. But not enough of that "new information" seems to have arrived (although many experts were on hand to warn the council that predicting a "100-year" floodplain was an inexact science at best). And, almost exactly two years later, the council unanimously voted to rezone the tract to allow development of as much as 104 condominiums. Ninety-two units have been built, and the city now is in the process of buying out the undeveloped land.

A flood of "new information," of course, came in 1993 and 2008. The base elevation for the floodplain was raised after 1993, and the experts are still collecting and studying the data from last summer's flood before deciding how to change it again.

But those requirements didn't help the residents of Idyllwild who trusted the city officials, engineers and insurers who said the odds of catastrophic flooding outside of the 100-year floodplain were so small that they needn't worry about it. In the past year, many of those flood-displaced families have moved back into the floodplain -- not because they're not worried about future floods -- but because they think they have no other financial options.

Take Charlie Eastham, for example. As both president of the Housing Fellowship board of trustees and member of the Iowa City Planning and Zoning Commission, he has a broad perspective on housing issues. But the retired university employee's perspective grew even broader during the time that he and his wife, Karen Fox, were displaced from their flood-damaged home at 37 Colwyn Court.

The couple didn't have flood insurance -- Eastham said they were told in 2004 that they didn't need it and couldn't get it -- and they don't qualify for any buyout program. Yet through a combination of additional loans and some state funds, they are able to move back into their home.

The Idyllwild Condominium Association Board is holding a Flood Reconstruction Celebration at 3 p.m. today to mark the progress made by Eastham and other residents. Board President Sally Cline said about half of the subdivision's units have been restored and about 30 units have been sold -- sometimes for less than a quarter of their pre-flood price. Cline hopes that 90 percent of the units will be restored by this fall, with about 20 units becoming high-end rentals.

"Compared to where it was six months ago, I'm amazed," Cline said.

We, too, celebrate what Idyllwild residents and other flood victims have accomplished in the past year. But we hope our city, state and federal leaders have learned just how foolish it would be to approve any future construction along the river.

Give homeowners options other than just walking away

During his speech Monday in Elkhart, Ind., President Obama suggested that one way to help the millions of Americans with upside-down mortgages — mortgages in which they owe their lender more than their house is worth — would be to change the bankruptcy laws and give judges the authority to modify the terms of a mortgage for someone’s only home. Right now, the law allows judges to modify mortgages for additional homes, but not for someone’s sole residence.

“Now, that makes no sense,” Obama told the crowd. “What that’s doing is it’s forcing a lot of people into foreclosure who potentially would be better off, and the bank would be better off, and the community would be better off if they’re at least making some payments, but they’re not able to make all the payments necessary.”

We were disappointed that such practical legislation wasn’t included in the stimulus compromise agreed to Wednesday. Bankers and others in the mortgage industry worry that such a change would all but dry up the market for second mortgages and could raise rates for all new homeowners. But the industry and the broader economy have much more to lose if these struggling homeowners can’t work out a compromise with their lending institutions.

Iowa City bankruptcy lawyer Steve Klesner said he thinks it’s necessary to grant judges this authority because so many mortgages have been repackaged, rebundled and resold to so many different lenders that it’s sometimes impossible to figure out which — or even how many — of the lenders need to sign-off on the modifications. And some lenders simply never agree to any modifications.

Empowering judges to be decision-makers would increase the possibilities of finding an agreement in the best interests of the lender, the borrower and the neighboring landowners.

When is it right to walk away?

If Congress doesn’t move forward with granting judges this authority, far too many people over the next few years could have to decide whether it’s in their best interest just to walk away altogether from their mortgage.

Klesner said many homeowners view the option as ethically dubious at best and wouldn’t even consider following through with it. Others who eventually hope to find jobs in management or in public service will need to decide what’s more costly to their long-term goals: paying off the mortgage or enduring the stain on their credit record.

And even the remaining homeowners — those who, after looking at their situation dispassionately, decide that walking away makes sense — need to know what they are in for.
Iowa law gives lenders two options when deciding to foreclose on property:

* If lenders choose to use foreclosure without redemption, they just go after the legal title to the property and don’t go after the borrower to make up any shortfall between how much is owed and how much the property eventually sells for. After being served with a foreclosure without redemption notice, the borrower can ask for six months to vacate the property.

* If lenders choose straight foreclosure, then they reserve the right to go after a borrower to make up any shortfall. But the process takes longer because the borrower can ask for one year to vacate the house.

Because most lenders don’t want to have their properties sitting around depreciating for an entire year, foreclosure without redemption is the dominant form in Iowa. Before the current housing crisis, it was almost assumed that, if a foreclosed home only had one mortgage on it, the lender wouldn’t go after any shortfall.

Klesner said in the past year, however, there’s been a noticeable increase in the number of lenders using straight foreclosure even when a home doesn’t have second mortgage — probably because lenders facing increased numbers of mortgage defaults need to make up the money somehow. It’s not a huge increase, but it’s no longer an absolutely safe bet that lenders won’t go after people who decide to walk away from a first mortgage.

Help homeowners avoid the dilemma

But the bet still is safe enough for some.

If Iowa City flood victims are facing a mortgage costing more than the post-flood appraisal of their homes, and if they’re also facing more than $50,000 in repairs on top of that, they might want to consider walking away if their property only has one mortgage on it.

If their lenders choose foreclosure without redemption, they can absorb the devastating financial loss and try to move forward with their lives — even though they’ve probably lowered the home values of their neighbors’ properties. If their lenders choose straight foreclosure, they’ll need to declare bankruptcy anyway and try to protect their remaining assets.

With the proposed change in bankruptcy law, judges could help many homeowners avoid facing this dilemma in the first place. It wouldn’t keep every home out of foreclosure, but it would give homeowners more options.

Eight months out, flood victims still treading water

Charlie Eastham, the president of the Housing Fellowship board of trustees and member of the Iowa City Planning and Zoning Commission, has long had a broad perspective on housing issues. But the retired university employee’s perspective has grown even broader during the nearly eight months that he and his wife, Karen Fox, have been displaced from their flood-damaged home at 37 Colwyn Court in the Idyllwild neighborhood.

The couple’s story serves as a timely reminder that, although the floodwaters receded months ago, many area families are still struggling to get their heads above water and that many area agencies need more donations of time, money and labor to help meet these families’ long-term needs. It also illustrates how many displaced families are moving back into the “500-year” floodplain — not because they don’t know better — but because they think they have no other financial options.

Eastham and Fox — with the help of friends and family — managed to remove all the furniture and appliances before their condo filled with 40 inches of water last June. But they’ve had both their lives and their finances turned upside by the devastating financial loss of their primary investment: their home. The couple didn’t have flood insurance — Eastham said they were told in 2004 that they didn’t need it and couldn’t get it — and they do not qualify for any buy-out program. So they continue to face the hard, seemingly inevitable decision of having to borrow even more money, apply for state funds and ask for even more help to rebuild their home in a spot that is likely to flood again sometime in the next decade.

Eastham said the couple paid $182,000 when they bought the condo in 2004 and that the last assessment before the flood valued the home at $196,000. Although the appraisal after the flood valued the house at $113,000, the couple is still paying off a $122,000 mortgage with Hills Bank and facing about $65,500 in repairs in addition to clean up costs of $21,700.

With the numbers so upside down — and with rent to pay on top of the mortgage — Eastham said the couple seriously considered simply walking away and allowing the bank to have the property. Sally Cline, president of the Idyllwild condominium association, said that, of the 86 units in Idyllwild, there already have been four foreclosures and one bankruptcy since the flood. Other owners have sold their units for as low as $10 and as high as $85,000. But Cline also said one of the units, which had been sold to a developer at a very low price, was cleaned up and resold for $125,000.

Eastham said he feels he has little choice but to go forward with repairs. Because 37 Colwyn Court is a one-story unit — which is one of the reasons why the 67-year-old Eastham bought it in the first place — the couple doesn’t have the option of moving their furnace and other essential features to an upper floor. Instead, the only protection they have against the ravages of the next flood is flood insurance.
Eastham said he probably won’t move back into his Idyllwild condo until his rental lease ends this summer. Cline said only 17 of the 86 units have been reoccupied. She moved back into her unit on Monday, even though the condo has neither carpet nor countertops and even though she also has to pay rent until her lease runs out.

Johnson County’s Long-Term Recovery Committee is working to ensure that people like Eastham, Fox and Cline eventually can find some other options. And the different agencies represented on the committee are also coordinating volunteer efforts to help out all flood-affected families as their needs continue to evolve.

For information on how to ask for or to offer help, call 337-VOLS (8657).