The Villas at Fox Point in Knoxville!

You’ve probably seen the houses being built behind the old VA Doctor’s residences on West Pleasant.

Over the fence shot of a couple of the Villas at Fox Point under construction.

Over the fence shot of a couple of the Villas at Fox Point under construction.

As a Realtor, I’ve gotten numerous inquiries about the development, and I’ve heard plenty of rumors, for example that they are all low-income rentals, that they’re going to be filled with a group of Somalian refugees, that they’re going to suck up all the rental market, and that they’re going to be upper income units for purchase only.

So, I decided to find out more. I started with Harold Stewart, City Manager, and then did some digging around on the web, and wrapped up with a phone call to the property management company in charge.

I learned that the development is called the Villas at Fox Point, that it is a Section 42 housing development being built by the Iceberg Development company, and is slated for completion later this year. According to Wikipedia, a Section 42 project refers to the Section 42 tax credits that give dollar-for-dollar incentives for the utilization of private equity in the development of affordable housing aimed at low-income Americans.  In other words, Iceberg Development is investing their own money to create the development, with the understanding that they will get an equal amount of tax credit to their investment.  The credits for this project amount to something in the neighborhood of $800,000.

The Villas at Fox Point will be managed by Pioneer Property Management, and will have a total of 50 units, consisting of a combination of two-, four-, and eight-plex homes; with 2, 3, and 4 bedrooms; and will all be rentals.   The majority of these units will be rented to qualified individuals who earn above the threshold for low income assistance, but below the income level that would normally enable them to purchase a home.

Stewart told me that rent will be determined on a sliding scale based on income for most units, although several units will be rented to the general public at market rates. Currently, he told me, there are over 200 names on the list requesting information for these homes. Some time in the coming weeks, information and applications will be sent to the people on the list, and qualified applicants will be placed in the rental units on a first-come, first-served basis.  Stewart added that about half of the names have out of town addresses. This means that a number of new families will be coming to Knoxville, many with children who will attend our schools. He also said there is no specific preference given to immigrants of any nationality, but that such people are welcome to participate in the application process along with everyone else.

Knoxville could definitely benefit from more diversity, and from new tax-paying, economy-stimulating residents, so I personally welcome all sorts of people to join our great community, and hope that they will be contributors and volunteers, no matter where they come from.

There will also be a free-standing clubhouse, walking paths, a community garden, and an onsite resident manager. All units will be constructed with all required accommodations for disabled residents, and the complex will be landscaped.  There are also specifications that require the complex to be well-maintained, and regular, unannounced inspections will be conducted. Iceberg Development and their management company, Pioneer Property Management have earned a good reputation for keeping their properties in good condition, and we have every indication that they will do the same in Knoxville.

Will this development alleviate the need for rental units in our community? I think these 50 units will help, but as many of the families are coming to town from somewhere else, and keeping in mind the expansion projected at Weiler Industries in the near future, I believe that many more rental units will be needed.

Are you interested in investing in real estate?  It’s a really good time to get in. Knoxville’s Iowa Realty office gets daily requests for rental property information, and most of the time we have to tell folks that all the units we know about are already filled.

So yes, the homes at Fox Point will all be rentals, most will be rented based on income, but renters will need to have a high enough income that they do not qualify for ‘low-income’ housing assistance. No, there is no indication that the units are all going to be occupied by a group of Somali refugees, although families who come from other countries are welcome to participate in the process. No, these 50 units are unlikely to dry up the rental market for other landlords. And no, this will not be an upper-crust gated community.

If you would like to get on the mailing list, call Pioneer Property Management at 608.348.7755 to submit your information.

So, there you go.  That’s the scoop on the Villas at Fox Point.

About Non-Conforming Lots

Knoxville Zoning Map You may have heard that our community is dealing with a bit of a crisis surrounding the regulations around what are termed ‘non-conforming lots’. Just what is a non-conforming lot? And what’s the big deal?

A non-conforming lot, in any municipality, is a lot that does not meet the minimum size standards set forth in that municipalities’ ordinances.  In Knoxville, specifically, a lot must be 60 feet wide and at least 7200 square feet to be considered a conforming lot. There has been a bit of discussion about whether or not that 60 feet of width must be at the street, and according to City Manager, Harold Stewart, it does not. So, for example, in the case of a pie-shaped cul-de-sac lot that is not 60 feet wide at the street, but does meet that width farther back in the lot, the lot is considered to be conforming.

This standard was set by the City Council in 1983, and at that time those lots throughout the city which were non-conforming (over 400 of them based on a recent count) were ‘grandfathered’ in; and any structures on those lots were allowed to stand, with the stipulation that any future structures on the lot are prohibited. Additionally any building lots platted after 1983, must conform to the minimum size standard.

The problem with non-conforming lots in general is that if the home which stands on one should be more than 50% destroyed by fire or other disaster, the owner will not be allowed to rebuild their structure.  In the past, the city has been known to issue a re-build letter, granting a exception to the code, when a home built on a non-conforming lot is destroyed.  This has been an infrequent occurrence, simply because the need for it has been rare.

So why is it suddenly an issue in Knoxville?  The answer is a bit complex: On the one hand, there is a newer city administration that was given a clear directive by the City Council to enforce those laws and ordinances that are already on the books.  They are taking this directive seriously, and have stated that they will adhere to the letter of the law, and do not foresee issuing any re-build letters on non-conforming lots.

But the biggest change has taken place in the banking industry. As banks and mortgage companies are faced with tightening regulations in the wake of the recent economic crisis, among many other changes, they have been paying more careful attention to local ordinances related to conforming lots. Some mortgage companies or government loan institutions will not finance a home on a non-conforming lot at all, or may require a bigger down payment for this type of property.  Further, owners of non-conforming lots must often have an additional insurance rider on the property to cover rebuilding in a new location, should their home be destroyed and not allowed to be rebuilt in the same location.

What does this mean, practically?  It means that if you own a home on a non-conforming lot, it may be more difficult for you to sell it. The issues that come with such a lot are a deterrent, in the first place; plus the pool of potential buyers is smaller when options like FHA or VA loans, or low down payment loans are ruled out. Further, loans on non-conforming lots are more difficult for banks to sell on the secondary mortgage market, which naturally makes the banks hesitant to loan on these types of properties.

2015-04-24 10.29.18If you have a non-conforming lot, it also means that you should make sure that you have insurance coverage for your home that will protect you even though your lot is non-conforming.

What can be done? The Realtors, bankers, insurance companies and the County Assessor recently brought this issue to the attention of the Planning and Zoning Board, the City Manager and Assistant Manager, and also alerted the local media. Our intent was to let people know that many of them had one of these lots, and that they need to take steps to be sure they are protected. We also felt that there are steps that can be taken by the city to amend the ordinance, to offer relief to owners of these lots, who are in many cases lower income or elderly residents living in small homes in older neighborhoods.

The City Manager and the Planning and Zoning Commission are now addressing the issue, and hope to be able to come to a quick resolution.  As of earlier this week, Stewart told me that he has taken the research presented by the concerned Realtors and the County Assessor, including identification of non-conforming lots and the ordinances of several similar communities which address this issue, and has done his own research on the topic and has come up with a suggested plan that will be taken to a professional City Planner in Des Moines early next week.

Possible solutions include some combination of decreasing the minimum size of a conforming lot, allowing for rebuilds on those lots platted before 1983, within certain parameters, and adjustments to the ordinance.

We look forward to the City Planner’s recommendations, and to the city’s implementation of changes to the ordinance.  In the meantime, you can check your lot’s dimensions on the Marion County Assessor’s Beacon website, and if your lot is smaller than 60 feet wide with a total of 7200 square feet, you may want to have a conversation with your insurance company!