WATERLOO — Hawkeye Community College students will start building a new home on a vacant lot this year through a partnership with the city government.

Waterloo City Council members voted 5-2 Monday to approve a $137,500 budget for the house despite concerns the finished product in the 200 block of Newell Street won’t appraise for its actual cost.

The program was the brainchild of former Councilman Ron Welper, who approached HCC’s sustainable construction and design program about having students build houses on vacant lots the city was paying to maintain.

“We’ve had a problem with buildable lots in the city of Waterloo that we haven’t been able to sell, we haven’t been able to give them away,” Welper said. “We will be going in there and building homes in areas that haven’t seen new homes in many years.”

The city is donating the lot and providing $137,500 in bond money for materials and the contracted plumbing, electrical and mechanical systems the students are unable to do themselves. HCC students will get experience building the house which will be turned over to the city to sell and reinvest the proceeds in another new home.

The first home will be a one-story home with four bedrooms, two bathrooms, a detached two-car garage and high energy-efficeny rating.

Council members Bruce Jacobs and Margaret Klein voted against the arrangement, arguing it is unlikely the home will appraise for $137,500 in that location, which would make it impossible for a bank to provide a mortgage in that amount.

“At the end of the day these houses have to sell,” Jacobs said .”Somebody has to be able to buy them.

“I think $137,500 is way out of the market for 200 Newell,” he added, noting the Board of Realtors indicated the 50 closest home sales to that location ranged between $30,000 and $40,000.

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Klein said the arrangement “is is absolutely guaranteeing that we are going to lose money,” which could be spent better on city departments that suffered budget cuts this year.

But Community Planning and Development Director Noel Anderson suggested banks may be willing to consider the house more like new construction in neighborhoods such as the former Lincoln Elementary School site or East Eighth and Lafayette streets, where houses have appraised above $120,000.

Councilman Pat Morrissey objected to those who said nobody would be willing to pay full price for a house on Newell Street.

“If you build it they will come,” Morrissey said. “These are going to be beautiful homes. We’re not going to have any trouble getting people to move into there.

“The north side of Waterloo has taken it long enough and they need to be supported by everybody,” he added.

Craig Clark, an instructor for HCC’s sustainable construction program, said he hopes the program eventually will lead to new homes being build on infill lots all over Waterloo.

“One of the reasons we chose this lot is it’s an area of town that needs a little help,” he said. “It has not been built in for a very long time, so we thought it was maybe the best place to start our program.

“It could really make a difference in this community,” Clark added.

Councilman Chris Shimp said he shared concerns about the cost of the house but believed the “outside-the-box idea” started by his Ward 5 predecessor should be given a chance to see how it works.

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