The city of Davenport has a new DREAM.

On Monday, it announced the launch of the Extreme DREAM Project, a new program designed to renovate vacant and abandoned homes into owner-occupied residences in the Gaines Street corridor. The Extreme DREAM Project offers a dollar-for-dollar match up to $100,000 to purchase and rehabilitate a property in the project area.

Davenport has allocated $2.1 million for Extreme DREAM, which is funded by the sale of the Heritage high-rise building (501 W. 3rd St.) in 2021.

“Extreme DREAM builds on the previous success of the Davenport DREAM Project, DREAM Plus and Commercial DREAM,” said Susanne Knutsen, economic development manager for the city of Davenport. “The City of Davenport is committed to investing in our heritage neighborhoods to ensure their continued vitality.”

There are approximately 32 properties located in the Gaines Street corridor (roughly between 5th and Locust) that have been identified as potentially eligible for the project, she said. For a property to qualify for the Extreme DREAM Project, the home must meet the following qualifications: it must have been vacant for at least six months and have severe code violations.

Following renovations, the home must either be owner-occupied or sold to an owner occupant.

“The Davenport City Council has shown their commitment to neighborhood revitalization over the past five years with the funding of several new housing programs,” said Davenport Mayor Mike Matson. “l applaud the leadership of the Davenport City Council in prioritizing funding for this program from the sale of the Heritage building.”

The city hopes to do at least 20 projects out of the 32 vacant properties available, Knutsen said. Three are owned by the city – all on Warren Street (just west of Gaines), at 823, 1006 and 1216.

‘History of disinvestment’

3rd Ward Ald. Marion Meginnis said Monday that this area on the west side of the city has suffered from neglect on multiple fronts.

The area often had former single-family homes that became multi-family, which meant there wasn’t as much homeownership and had a negative effect, she said.

“Without an extreme investment, it’s hard to do turn this around,” Meginnis said. “This is an effort in a focused area; hopefully we’ll be able to replicate this in other areas of our city down the road.”

Restabilizing the area, so that it looks good; makes it a great place to live, and returns properties to the tax rolls are all essential city goals. “It’s very exciting. This area of the city had a history of disinvestment,” Meginnis said.

The city wants to see not just what happens with these houses, but the effect on other housing in the area, she noted.

“I’m envisioning if we do a couple houses on the block, there will be others that will sell at a higher comp, other people become interested in the area,” she said. “When you do a project like this, people see the work being done – even if they themselves don’t participate in funding for this, they might decide to do something to their home.”

“It can only have that kind of effect if you have it happening in multiples,” Meginnis said.

If any of the owners are paying property taxes, the revenue is very low for the city, she noted. One she mentioned produces $424 a year, and if the house is renovated that could jump to $3,000 a year.

“The city is not benefitting. The city is often cutting grass on these properties or putting liens on them,” Meginnis said. “There’s a cost to the city of not doing anything with these properties and at the end of the day, you end up with a house so deteriorated, you have to tear it down and the city’s sitting there with a vacant lot.”

“Eventually, it ends up as a vacant lot sitting there, which the city would have to cut weeds on,” she said. “To have properties back on the rolls, that are paying taxes, that have homeowners in them, is a really good thing for everybody in the city – not just people living in that area.”

The staff has done similar “DREAM” programs with existing homeowners, and another in a focused area, Meginnis said.

Past success on Gaines

She cited the Gateway Redevelopment Group’s success in the neighborhood, with the 2008 completion of 822 Gaines, restoring the long-abandoned 1870s home to an attractive three-bedroom, 2-1/2 bath, 2,200-square-foot single family home.

It just sold a couple years ago for $150,000. “That house would still be on the Extreme DREAM program if it were available,” Meginnis said.

She also said the redevelopment area can benefit from the city’s URTE (Urban Revitalization Tax Exemption) program, which provides a 10-year exemption on increasing property taxes resulting from rehabbing homes. That program was established to promote these projects and soften the burden of higher property taxes after such work.

“It’s a great incentive,” Meginnis said.

The application window for the Extreme DREAM Project is now open. To allow time for applicants to purchase and/or obtain a letter of intent to purchase a property, as well as acquire bids for all work necessary, the first review of applications will begin in late June 2023. Applications are currently accepted on a rolling basis.

To inquire about the eligibility of additional properties, contact city staff at extremedream@davenportiowa.com. For more information about the Extreme DREAM Project, visit the city website HERE.

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