JEFFERSON — The City of Jefferson is redoubling its efforts to be able to offer affordable housing to current residents, as well as new ones.
“Simply stated there are not enough homes or dwellings built since the economic recession of 2008-2010,” Jefferson City Administrator Tim Freitag said. “Housing affordability and the need for a variety of housing types that are accessible to different demographics, including young families and seniors looking to downsize their homes, are important for the community’s ability to attract new residents and is critical for it to grow, while staying affordable.”
Freitag and other city officials met this week with advisors from the private sector to hear their ideas on how best to go about creating affordable workforce housing in 2021.
Visiting the City of Jefferson Committee of the Whole were Tina Crave of the Greater Watertown Community Health Foundation, Movin’ Out’s David Porterfield, and Eric Fowle and Seth Hudson of Cedar Corp.
Cedar Corp. describes itself as, “a full-service integrated services firm” that has been in existence since 1975 and has more than 90 employees working out of offices in Menomonie, Green Bay, Cedarburg and Madison. Its integrated services include civil and municipal engineering, planning, economic development, funding assistance such as TIF and grants, architecture and environmental services.
Movin’ Out, in partnership with people with disabilities and their allies, creates and sustains community-integrated, safe, affordable housing solutions.
Hudson said the Wisconsin Realtors Association defines “workforce housing” as, “the supply of housing — a variety of housing types, sizes, locations and prices — in a community that meets the needs of the workforce there.” He said the Urban Land Institute defines it as “housing that is affordable to households earning 60 to 120% of the area median income.” The federal Department of Housing and Urban Development defines an affordable dwelling as one that a household can obtain for 30% or less of its gross income.
The median income for a household of four people in Jefferson County is $78,800. By comparison, it is $103,100 in Dane County, while in Dodge County it is $77,900.
Hudson said there has been a major shift in the composition of the state and national housing markets. He said this has been due to a record shortage of existing homes. He said, historically, new homes made up about one in 10 available dwellings.
“Today, about one in four homes for sale are newly built, the highest share ever,” he said, adding that one in seven homes are now bought by Wall Street investors.
Hudson said demand has risen across all geographies and segments of the market, particularly first-time buyers and buyers who are age 55 and over.
He called the housing supply cycle in 2021, “broken” and said that there have not been enough homes built since the Great Recession. He said there have been 75% fewer lots created and 55% fewer new housing units constructed.
Another hurdle standing in the way of home construction, Hudson said, are rising construction costs. These are due, in part, to severe labor shortages in the construction industry, massive increases in material prices, an increase in site development costs and supply-chain issues. Hudson said an additional barrier to home construction is the rising cost of infrastructure installation, such as sewers and streets.
Hudson warned that cities should be wary of their possibly unconscious creation of “soft costs” of new home construction. These include outdated land use regulations, lack of vision or policies within their comprehensive plans and zoning that is too restrictive.
Hudson told Jefferson officials about what housing developers are seeking in 2021. He said, first, they want proof that there is demand for housing in a market. He said they seek communities that know what they want, versus what they need — such as single-family dwellings versus multifamily and market-rate as opposed to workforce/affordable housing. Developers want reduced land costs, infrastructure costs that are offset, or paid for, and land that is “ready to go,” because it is properly zoned with no environmental issues.
Hudson said communities that may be farther along than Jefferson in creating affordable housing are performing housing studies to understand the needs and educate elected leaders and citizens on needs. They are creating public/private housing funds, identifying where housing should go and investing accordingly. They are also limiting development fees. He said successful communities are updating zoning codes to facilitate different housing types, seeking corporate involvement and investment in local housing projects, gaining control of land, either directly or through option agreements, then donating or subsidizing the land.
Hudson said Jefferson may want to begin pursuing its further housing goals by determining market demand; figuring out desirable housing types, such as single family versus multifamily; setting price points; creating land that is ready for building; setting regulations and design standards; determining incentives, such as Tax Incremental Financing districts; gaining community support for plans and compiling a concise marketing plan.
There are, according to Hudson, some potential funding and financing sources available that can allow cities to add affordable workforce housing to their menus of options. He said low-income housing tax credits exist, as do choices for TIF districts.
Fowle said Jefferson’s 2021 Comprehensive Plan does a good job of moving the city toward its housing goals, although there are improvements that can be made to the document. The purpose of the plan, in part, has been to direct housing and commercial investments in the city. It establishes the vision for the municipality, contains goals and objectives to achieve the vision, contains strategies and policies and lays out the plan for moving forward.
The Jefferson comprehensive plan includes the expectation that the city will grow by 900 people from 2020 to 2040. The plan vision is to diversify Jefferson’s housing stock to appeal to more residents, serve lifecycle housing needs and increase the population.
After the meeting, Freitag said that, of particular concern in Jefferson, is the cost of construction.
“Acute labor shortages, material price increases and increases in site development costs lead to all types of housing becoming more expensive, leading to shortages,” he said. “In turn, this creates barriers to single-family home ownership and rental affordability,” he said. “Housing availability and affordability will be one of the community’s top priorities going forward. We very much look forward to working collaboratively with the GWCHF and other organizations to address this issue.”
Crave spoke following the meeting and further explained the GWCHF’s involvement in the affordable housing process in Jefferson.
“Strong families are a priority of the GWCHF. Our families, and our employers, have made it clear that access to housing is a barrier across Dodge and Jefferson Counties,” she said. “As availability of local housing inventory has decreased, prices have risen. We now have a significant shortage of housing that is affordable for working families. A recent housing study coordinated by Thrive Economic Development revealed 41.5% of Jefferson County households and 30% of Dodge County households spend more than 30% of their income on housing.”
The Cedar Corp. representatives said the next step in the process will be a brainstorming session on Oct. 19 at 5 p.m. in Jefferson. This may be followed by workforce housing action plan preparation, then plan adoption and implementation.