Grantsburg, WI Area Housing Study - 2019

Grantsburg Area Housing Study 2019 Prepared by MSA Professional Services

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Table of Contents CHAPTER 1 – Introduction ............................................................................................................................ 5 Defining the Housing Market ................................................................................................................ 5 The Study .............................................................................................................................................. 6 CHAPTER 2 – Study Process .......................................................................................................................... 6 Interviews.............................................................................................................................................. 6 A Note About US Census and American Community Survey Data ....................................................... 6 CHAPTER 3 – Findings ................................................................................................................................... 7 3.1 Grantsburg Area Housing Supply ........................................................................................................ 7 Housing Occupancy ............................................................................................................................... 7 Housing Type......................................................................................................................................... 8 Housing Age .......................................................................................................................................... 8 Housing Value ....................................................................................................................................... 9 Rents ................................................................................................................................................... 10 Supply Trends ...................................................................................................................................... 10 3.2 Grantsburg Area Housing Demand ................................................................................................... 12 Population ........................................................................................................................................... 12 Households ......................................................................................................................................... 12 Age ...................................................................................................................................................... 13 Income and Affordability .................................................................................................................... 13 Zoning Code Review ............................................................................................................................ 16 3.3 Demand Versus Supply ..................................................................................................................... 17 Vacancy Rates ..................................................................................................................................... 17 Real Estate Sales and Listings.............................................................................................................. 17 3.4 Leakage ............................................................................................................................................. 20 Where Do Workers Live? .................................................................................................................... 20 Why Do People Live Outside the Village? ........................................................................................... 21 3.5 Gaps .................................................................................................................................................. 22 Household Growth Projections ........................................................................................................... 22 Specific Housing Type Gaps ................................................................................................................ 23 3.6 National Trends affecting Grantsburg Area Housing ........................................................................ 24 CHAPTER 4 – Recommendations ................................................................................................................ 26 Goal 1: Develop Local Funding to Address Housing Issues ..................................................................... 27 Goal 2: Expand Options for Homebuyers ............................................................................................... 28 Goal 3: Expand Options for Renters........................................................................................................ 29 Goal 4: Provide Good Quality Housing in Clean Neighborhoods ............................................................ 31 Goal 5: Make Grantsburg a Great Place to Live ...................................................................................... 32

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CHAPTER 1 – Introduction This study was commissioned by the Housing Subcommittee of the Grantsburg Revitalization Operation (GRO). GRO was formed in 2014 as a committee to organize a Design Team Weekend. Members from the committee then rolled over into an implementation committee which become GRO. GRO has several subcommittees in addition to housing: Branding, Highway 70, Town Renewal, and Natural Resources.

The objectives of this housing study are a better understanding of how the Grantsburg area housing market works and recommendations to improve that function. The Village wants to take action to help the housing market meet the needs of current and prospective residents, especially for the benefit of employers as they work to attract and retain talent.

Defining the Housing Market This study analyzes housing within the Village of Grantsburg as well as housing within the “Grantsburg Area”. The communities included within the “Grantsburg Area” are all communities fully or partially within the Grantsburg School District: Village of Grantsburg and Towns of West Marshland, Lincoln, Daniels, Wood River, Trade Lake, Anderson, Grantsburg and Sterling. This wider area was chosen for analysis because the Village also wishes to understand the wider housing market in and around its municipal boundaries.

Figure 1.1 – Grantsburg Area Study Area

Source: www.wi-dpi.maps.arcgis.com

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The Study The objectives of this study are a better understanding of how the Village and Grantsburg Area housing market work, and recommendations to improve that function. More specifically, the Village wants to be sure that its housing market is meeting the needs of current and prospective residents, especially for the benefit of employers as they work to attract and retain talent. As more people choose to live in Grantsburg, the Village will see more property tax revenue, greater resource efficiency (due to less commuting), enhanced social vibrancy, and more support for retail and service businesses.

This study evaluates the supply of housing in and around the Village, demand for housing in the same area and gaps between supply and demand. For those gaps identified, strategies are offered to enable the Village to help close those gaps.

CHAPTER 2 – Study Process This study uses a variety of methods and data to understand the housing market. Objective, measurable data were collected from the Village, the Multiple Listing Service (real estate listings and sales), the State of Wisconsin, and the U.S. Census Bureau. Such “hard data” are inadequate to understand the local market. This study also featured a series of interviews with people familiar with the housing market.

Interviews The GRO Housing Subcommittee met and interviewed people with knowledge and insight about the local housing market, including realtors, landlords and employers. These interviews were conducted in May 2019 and included the following people: • Timber Ghost Realty • Edina Realty • Property Executives Realty • Northwestern Wisconsin Electric Company • Victrex Corporation • Burnett Medical Center • McNally Industries • Burnett Dairy Cooperative • Grantsburg School District • Landlords (5 participants) • WI DNR • Parker Hannifin The feedback from interviewees shared common themes and perceptions of the Grantsburg housing market, which makes a strong case for the views expressed. This feedback is described in Chapter 3, under each topic as appropriate (Supply, Demand, Leakage, Gaps).

A Note About US Census and American Community Survey Data Much of the data was derived from secondary sources, consisting primarily of the U.S. Census and the American Community Survey.

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Caution should be used when interpreting the data from secondary sources. The United States has transitioned from the Census long-form to the American Community Survey (ACS). The majority of the data that the American Community Survey collects is from a sample of the total population and therefore is subject to both sampling errors (deviations from the true population) and non-sampling errors (human and processing errors). The ACS is released every year and covers all of the social, economic, housing, and demographic questions that previously were covered by the Census long-form.

Unlike the Census, which attempts to take a snapshot of the population on April 1st, the ACS provides consecutive estimates. Because the data is “smoothed out” over the time period, it is near impossible to pinpoint specific changes that may have occurred during the time period. The majority of the data in this document is from the 2013-2017 ACS estimates. Because these data are only estimates, they may not accurately represent the housing climate in the Grantsburg area. Due to the fundamental differences in collection method, decennial Census data and ACS data should not be directly compared with each other to draw conclusions about change over time. When comparing ACS data, it is necessary to take the margin of error (MOE) into account. Due to small sample sizes, the margin of error is sometime very high, indicating low reliability – the estimate may or may not reflect reality. This is especially true for data at the municipal level; data at the County and State levels tend to have lower margins of error. To account for the margin of error, ACS estimates for municipalities will be shown in this report as a range instead of one number. The Census Bureau’s standard is a 90% confidence level for each estimate. For example, the 2013-2017 ACS Estimate for households in the Grantsburg area is 2,356 with a margin of error +/- 116. We will show this estimate as a range of 2,240-2,472. Estimates for Burnett and Polk Counties and the State will be shown as one number.

CHAPTER 3 – Findings This chapter presents the findings from our data analysis. Data from different sources and methods are compared and contrasted. The findings are organized by topic – supply, demand, leakage and gaps.

Interview feedback is reported with the relevant topic. While no single data point or opinion offers much insight, when combined these data create a useful portrait of the market.

3.1 Grantsburg Area Housing Supply This section describes current housing stock in the Village and in the Grantsburg Area – occupancy, type, age and cost/value.

Housing Occupancy Table 3.1 shows the majority of the housing stock in the Grantsburg Area is owner-occupied (80-82%) and 18-20% is renter-occupied, according to 2013-2017 ACS estimates. This is a significantly lower percentage of renter-occupied housing stock than is found in the Village of Grantsburg alone (33-45%).

The lower percentage of renter-occupied housing in the Grantsburg Area as compared to the Village is due to the fact that renter-occupied housing is more likely to be found in cities and villages than towns, due to the availability of public sewer and water. The Village of Grantsburg’s housing occupancy is similar to the State’s at 67% owner-occupied housing and 33% renter-occupied housing.

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Table 3.1 – Housing Occupancy Village of Grantsburg

Grantsburg Area

Burnett & Polk Counties # %

Wisconsin

#

%

#

%

#

%

Owner-Occupied

298-398

55-67%

2,240-2,472

80-82%

20,140

79%

1,559,308

67%

Renter-Occupied

181-265

33-45%

481-629

18-20%

5,333

21%

769,446

33%

Total

479-663

100%

2,721-3,101

100%

25,473

100%

2,328,754

100%

Source: 2013-2017 ACS Estimates

Housing Type Table 3.2 shows that approximately 79-87% of the housing stock in the Grantsburg Area is 1-unit detached housing. Approximately 10-11% of the housing stock is mobile homes, 2-3% is 1-unit attached housing, and up to 9% is in apartment style housing, according to 2013-2017 ACS Estimates. The Village of Grantsburg alone has a lower percentage of 1-unit detached housing (66-75%) and mobile homes (25%), and a higher percentage of duplexes (4-12%), 3 or 4 units (5-13%) and 20 or more units (4-20%).

The makeup of the Village’s housing unit types is most similar to the State’s.

Table 3.2 Housing Unit Type Village of Grantsburg

1-unit, detached 1-unit, attached

Grantsburg Area

Burnett & Polk Counties # %

#

%

#

%

414-520

66-75%

3,533-3,823

79-87%

32,884

Wisconsin #

%

82%

1,776,970

67%

0-9

0-3%

0-35

0-1%

645

2%

114,444

4%

2 units

25-77

4-12%

62-148

2-3%

723

2%

173,245

6%

3 or 4 units

33-85

5-13%

32-106

1-2%

441

1%

99,396

4%

5 to 9 units

0-9

0-3%

0-27

0-1%

670

2%

130,296

5%

10 to 19 units

6-26

1-4%

0-45

0-1%

410

1%

91,393

3%

20 or more units

28-62

4-10%

14-76

0-2%

540

1%

188,319

7%

Mobile home

13-35

2-5%

409-547

10-11%

3,544

9%

94,013

4%

0-9

0-3%

0-28

0-1%

12

0%

616

0%

Boat, RV, van, etc.

Source: 2013-2017 ACS Estimates

Housing Age Table 3.3 shows the 2013-2017 ACS Estimates for the age of the existing housing stock. Of all housing units built in the Grantsburg area, approximately half of the housing stock was built before 1980 (54%), only 17-18% has been constructed from 2000 to present. For the Village of Grantsburg alone, 44-86% of the housing stock was built before 1980 and 11-24% has been built since 2000. These numbers are similar to what we are seeing in Burnett & Polk Counties (20%) and the State (16%); new home construction has been slow in all areas over the past 10 years or so.

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Table 3.3 Age of Housing Village of Grantsburg # %

Grantsburg Area #

%

Burnett & Polk Counties # %

Wisconsin #

%

Built 2014 or later

0-9

0-3%

0-39

0-1%

179

0%

16,160

1%

Built 2010 to 2013

0-9

0-3%

27-79

1-2%

502

1%

44,377

2%

Built 2000 to 2009

72-126

11-19%

603-779

15-16%

7,395

19%

344,660

13%

Built 1990 to 1999

58-124

9-19%

615-769

15-16%

6,510

16%

371,125

14%

Built 1980 to 1989

19-63

3-10%

615-769

13%

5,081

13%

265,382

10%

Built 1970 to 1979

74-132

11-20%

696-856

17-18%

6,546

16%

393,850

15%

Built 1960 to 1969

32-86

5-13%

233-339

6-7%

3,182

8%

261,254

10%

Built 1950 to 1959

49-101

8-15%

282-402

7-8%

2,790

7%

297,380

11%

Built 1940 to 1949

30-86

5-13%

175-285

5-6%

2,197

6%

151,579

6%

101-171

16-25%

672-830

17-18%

5,487

14%

522,925

20%

Built 1939 or earlier

Source: 2013-2017 ACS Estimates

Interview Feedback Interviewees noted that the owner-occupied housing stock within the Village is affordable because it is old, BUT because it is old, it also needs to be updated/remodeled repaired. People looking for affordable starter homes in the $100-$200k range often have sufficient money for a down payment, but lack the additional money for needed housing repairs.

Housing Value Table 3. 4 shows the median home value in the Grantsburg Area is between $82,077 and $194,037. For the Village of Grantsburg alone, the median home value is lower and falls between $82,077 and $105,523. All of the surrounding towns have higher median home values with the highest being Trade Lake at $162,363-$194,037, as do Burnett & Polk Counties ($309,100) and the State ($169,300). Over 50% of homes in the Grantsburg Area fall between the $50,000 and $150,000 range.

Table 3.4 Housing Value Village of Grantsburg # %

Grantsburg Area #

%

Burnett & Polk Counties # %

Wisconsin #

%

Less than $50,000

19-79

6-22%

143-229

7-8%

1,488

7%

85,201

5%

$50,000 to $99,999

107-173

32-49%

488-622

23-24%

3,130

16%

219,653

14%

$100,000 to $149,999

62-130

19-36%

523-653

24-26%

4,839

24%

331,800

21%

$150,000 to $199,999

18-50

5-14%

368-474

17-18%

3,923

19%

315,939

20%

$200,000 to $299,999

9-39

3-11%

342-454

17%

4,273

21%

350,432

22%

$300,000 to $499,999

0-10

0-3%

140-196

7%

1,992

10%

192,366

12%

$500,000 to $999,999

0-9

0-5%

8-60

0-2%

427

2%

53,495

3%

$1,000,000 or more

0-9

0-5%

0-30

0-1%

68

0%

10,422

1%

Median (dollars)

$82,077-$105,523

$82,077-$194,037

$309,100

$169,300

Source: 2013-2017 ACS Estimates

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Rents Per the 2013-2017 ACS Estimates, median rent in the Grantsburg Area was $445-$1,445. For the Village of Grantsburg alone, median rent is $445-$889. Most of the surrounding Towns (and Burnett and Polk Counties) have higher median rents with the highest being $455-$1,445 in Trade Lake. It is important to remember that multifamily housing is rarely developed in towns due to the lack of public sewer and water service, so the sample size is much smaller. Between 50-71% of rents in the Grantsburg area are between $500 and $999.

Table 3.5 Rents Village of Grantsburg

Grantsburg Area

Burnett & Polk Counties # %

#

%

#

%

Less than $500

60-106

35-59%

75-143

22-24%

1086

$500 to $999

62-122

2-19%

218-328

50-71%

$1,000 to $1,499

3-39

0-9%

16-70

$1,500 to $1,999

0-9

0-9%

$2,000 to $2,499

0-9

0-9%

$2,500 to $2,999

0-9

$3,000 or more

0-9

Median (dollars)

Wisconsin #

%

23%

88,019

12%

2887

60%

447,833

61%

5-11%

742

15%

158,152

21%

0-28

0-4%

77

2%

29,571

4%

0-27

0-4%

3

0%

7,720

1%

0-9%

0-28

0-4%

2

0%

2,099

0%

0-9%

0-27

0-4%

0

0%

2,842

0%

$445-$889

$445-$1,445

$1,433

$813

Source: 2013-2017 ACS Estimates

Interview Feedback One advantage that Grantsburg has over surrounding communities is that rents are low, so they are generally more affordable. The Village receives calls from as far as Webster/Siren from people looking for rental units. That being said, the quality of many of these rental units is not desirable. The Village does have some high-end rentals, however many have waiting lists. Several interview participants noted that Grantsburg needs newer, well-maintained affordable housing units. To give a sense for the quality of the existing rental market, one hiring manager noted that its employees who typically have the most success finding housing in Grantsburg are those looking for very cheap rentals and have exhausted all other housing options. Several people also noted there is a need for more rental units for families (1-3 bedroom units).

Supply Trends Figure 3.6 shows new single family homes, duplex units and home additions over the past 19 years. We can see the effects of the Great Recession in which permits hit a low around 2010. Since them, permits have been flat for duplex units, relatively flat for single-family homes and slightly more variable for home additions. In the past five years there have only been two new single-family homes constructed in the Village.

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Figure 3.6 Building Permit Data for the Village of Grantsburg 12 10 8 6 4 2 0

Single-Family Homes Duplex Units Home Additions (excludes shed/storage) Source: Village of Grantsburg

Figure 3.7 shows the value of all of the single-family homes that have been constructed in the Village since 2000. The homes constructed for less than $100,000 were Habitat for Humanity, manufactured or modular homes (~30 total). For the 44 homes built during this time period, the average value was $82,480.

Figure 3.7 Value of New Single Family Homes in the Village of Grantsburg $300,000 $250,000 $200,000 $150,000 $100,000 $50,000

4/10/2018

4/10/2017

4/10/2016

4/10/2015

4/10/2014

4/10/2013

4/10/2012

4/10/2011

4/10/2010

4/10/2009

4/10/2008

4/10/2007

4/10/2006

4/10/2005

4/10/2004

4/10/2003

4/10/2002

4/10/2001

4/10/2000

$-

Source: Village of Grantsburg

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3.2 Grantsburg Area Housing Demand Housing demand is about the people seeking housing. This section describes the people and households in the Village and within the Grantsburg Area, including quantities, ages and incomes.

Population Figure 3.7 shows individual population counts and projections for the communities that make up the Grantsburg area and also a combined population total for the area. The total population in the Grantsburg area increased from 6,559 in 2000 to 6,766 in 2010 (3.2% higher) and WI DOA population estimates the 2018 total to be at 6,756 (0.1% lower than in 2010). The WI DOA population projections for 2020 to 2040 indicate an increasing population for the area as a whole (13.4% between 2010 and 2040, or an additional 909 residents). The Village of Grantsburg individually is projected to have an 8.1% increase in population (1,341 to 1,450) during this period. The Towns of Daniels, Trade Lake and Wood River are all expected to have a lesser percentage increase than the Village of Grantsburg (6.3%, 3.3% and 4.4% respectively). The Town of Grantsburg is expected to have the greatest increase in population from 2010 to 2040 at an increase of 28.5% or a net increase of 324 residents (1/3 of the new residents in the Grantsburg Area).

Table 3.7 Population in Grantsburg Area

2000

T. Anderson 372

T. Daniels 665

T. Grantsburg 967

T. Lincoln 286

T. Trade Lake 871

T. West Marshland 331

T. Wood River 974

T. Sterling 724

V. Grantsburg 1,369

TOTAL

2010

398

649

1,136

309

823

367

953

790

1,341

6,766

2018

399

653

1,144

313

832

369

954

775

1,317

6,756

2020 Proj.

425

665

1,240

325

840

395

975

835

1,385

7,085

2025 Proj.

455

700

1,345

350

880

425

1,020

885

1,455

7,515

2030 Proj.

475

720

1,430

370

900

450

1,045

925

1,500

7,815

2035 Proj.

485

720

1,470

375

890

460

1,040

940

1,500

7,880

2040 Proj.

475

690

1,460

370

850

455

995

930

1,450

7,675

6,559

Source: 2000 and 2010 Census, WI DOA Population Estimates (2018) and Projections (2020-2040)

Households Table 3.8 indicates average household sizes. For the Village of Grantsburg itself, the average owneroccupied household size is between 1.99 and 2.45 and the average renter-occupied household size is between 1.51 and 2.01; both of these numbers are lower than statewide averages. A lower household size typically reflects a higher number of single-occupant households.

Table 3.8 Average Household Size Grantsburg Area* 1.39-2.94

Burnett & Polk Counties 2.25

Wisconsin

Avg. Household Size - Owner-Occupied Unit

Village of Grantsburg 1.99-2.45

Avg. Household Size - Renter-Occupied Unit

1.51-2.01

0.00-4.70

2.08

2.18

2.53

Source: 2013-2017 ACS Estimates *The Grantsburg Area estimates are too broad to be useful for comparison here

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Age Table 3.9 shows age distribution within the Grantsburg area and indicates that the population is aging, as evidenced by median age: 40.5 according to the 2000 Census and 41.2-53.3 according to 2013-2017 ACS estimates. The percentage of those age 65 and older has also increased from 15% to 20-23% during the same period while the population under age 20 decreased from 28% to 20-23%. An aging population is a common trend across the state – particularly in northern Wisconsin. This is a reflection of some combination of the following: people waiting longer to start families and having fewer children when they do, younger population leaving the state for education or jobs, and the older population living longer and some in-migration as people enter retirement. Age impacts demand for housing since needs and desires change during different stages of life.

Table 3.9 Age Distribution Village of Grantsburg # %

Grantsburg Area #

%

Burnett & Polk Counties # %

Wisconsin #

%

Under 5 years

65-131

8-9%

245-355

4-5%

2,873

5%

337,472

6%

5 to 9 years

48-106

6-7%

292-424

5-6%

3,479

6%

361,656

6%

10 to 14 years

16-48

2-3%

295-415

5-6%

3,579

6%

370,200

6%

15 to 19 years

24-64

3-4%

342-462

6%

3,375

6%

382,117

7%

20 to 24 years

39-151

6-9%

141-283

3-4%

2,755

5%

403,956

7%

25 to 34 years

95-267

14-15%

523-719

10%

5,593

10%

728,204

13%

35 to 44 years

58-158

8-9%

562-740

10%

6,404

11%

692,455

12%

45 to 54 years

69-151

9-10%

946-1,136

16-17%

8,568

15%

797,083

14%

55 to 59 years

59-121

7-9%

484-610

8-9%

4,748

8%

422,835

7%

60 to 64 years

38-106

5-6%

440-562

8%

4,951

8%

370,515

6%

65 to 74 years

109-199

11-15%

694-832

11-13%

7,091

12%

505,120

9%

75 to 84 years

65-147

8-9%

412-534

7-8%

3,752

6%

265,483

5%

85 years and over

12-90

2-5%

84-172

2%

1,399

2%

126,151

2%

Median Age

30.6-51.8

41.2-53.3

48.5

39

Source: 2013-2017 ACS Estimates

Income and Affordability Table 3.10 shows median income from 2013-2017 ACS Estimates. The Village of Grantsburg has the lowest household median income in the Grantsburg area at $26,401 to $43,055. The highest median household income in the area is found in the Town of Grantsburg at $41,158 to $67,024. According to 2013-2017 ACS Estimates, median household income was also higher in Burnett and Polk Counties ($49,721) and the state ($56,759) than in the Village.

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Table 3.10 Household Income Village of Grantsburg

Grantsburg Area

Burnett & Polk Counties # %

Wisconsin

#

%

#

%

Less than $10,000 $10,000 to $14,999

48-110 37-79

9-19% 7-14%

163-263 113-181

6.7-7.8% 4.6-5.3%

1,306 1,246

5% 5%

122,199 112,710

$15,000 to $24,999

61-127

11-22%

283-397

11.6-11.7%

3,058

12%

232,942

$25,000 to $34,999

33-81

6-14%

259-355

10.5-10.6%

2,794

11%

233,636

$35,000 to $49,999

42-108

8-18%

399-527

15.6-16.3%

4,067

16%

323,549

$50,000 to $74,999

52-104

9-18%

560-708

21.0-22.9%

5,059

20%

450,445

$75,000 to $99,999

42-102

8-17%

373-481

14.2-15.3%

3,626

14%

320,056

$100,000 to $149,999

27-71

5-13%

233-323

9.5-9.6%

2,977

12%

332,081

$150,000 to $199,999

2-16

0-3%

47-89

1.9-2.6%

814

3%

109,254

$200,000 or more

0-9

0-3%

13-55

0.5-1.6%

526

2%

91,882

Median Income

$26,401-$43,055

$26,401-$67,024

#

$49,721

% 5% 5% 10% 10% 14% 19% 14% 14% 5% 4%

$56,759

Source: 2013-2017 ACS Estimates

The following two tables show the percentage of income that owner and renter households pay towards mortgage or rent. Housing is considered affordable when a household spends less than 30% of their income on housing costs. That being said, some households do choose to pay slightly more than 30% of their incomes for housing and higher income households may have a choice to move into lower priced housing, but low-income households typically do not. The table below shows that currently 25-26% of households within the Grantsburg area are paying 30% or more of their income on housing costs, this is up from 14% according to the 2000 Census. For the Village of Grantsburg alone, 20-24% of owner households are paying 30% or more of their income on housing costs; this is up from the 2000 Census (8%). Combined, Burnett and Polk Counties have a similar percentage of owner-occupied households paying 30% or more of their income towards housing at 21%, according to 2013-2017 ACS estimates.

The State is slightly lower at 17%.

Table 3.11 Housing Affordability for Owner Households Village of Grantsburg # %

ď‚ ď€ Less than 20.0 percent

Grantsburg Area #

%

Burnett & Polk Counties # %

Wisconsin #

%

159-249

52-78%

1,044-1,224

49-54%

9,991

50%

855,647

55%

20.0 to 24.9 percent

0-49

0-10%

238-338

12-13%

2,777

14%

219,865

14%

25.0 to 29.9 percent

4-42

2-9%

150-234

8-9%

1,773

9%

140,003

9%

30.0 to 34.9 percent

5-23

2-5%

100-158

5-6%

1,339

7%

87,608

6%

35.0 percent or more

36-94

18-19%

386-510

20%

4,066

20%

247,647

16%

Not computed

0-25

0-5%

0-57

0-2%

194

1%

8,538

1%

Source: 2013-2017 ACS Estimates

For renter households, 26-40% of households in the Grantsburg area pay more than 30% of their income on rent, up from 21% according to the 2000 Census. For the Village of Grantsburg alone, the percentage paying 30% or more of their incomes as rent is 24-60%, up from 21% in 2000. According to 2013-2017 14

ACS estimates, Burnett and Polk Counties combined have 37% of renter households paying 30% or more of their income towards housing cost and 43% of households are doing the same across the State.

Table 3.12 Housing Affordability for Renter Households Village of Grantsburg # %

Grantsburg Area #

%

Burnett & Polk Counties # %

Wisconsin #

%

Less than 15.0 percent

0-32

0-9%

37-89

11-12%

820

15%

108,967

14%

15.0 to 19.9 percent

4-36

4-36%

27-91

8-11%

587

11%

103,625

13%

20.0 to 24.9 percent

14-17

16-19%

32-114

10-14%

693

13%

96,142

12%

25.0 to 29.9 percent

16-54

15-19%

25-83

8-11%

677

13%

83,989

11%

30.0 to 34.9 percent

8-34

9%

10-62

3-8%

386

7%

62,838

8%

35.0 percent or more

36-84

23-42%

100-182

23-32%

1,595

30%

267,298

35%

Not computed

8-14

8-14%

86-172

22-27%

575

11%

46,587

6%

Source: 2013-2017 ACS Estimates

To understand what income levels of households are cost burdened we can look at monthly housing costs as a percentage of household income. Table 3.13 below shows the percentage of owner- and renter-occupied households paying 30% or more of their incomes as rent for specific income groups in the Village of Grantsburg. The table shows the majority of cost burden is occurring for households earning less than $20,000 (for both owner- and renter-occupied).

Table 3.13 Monthly Housing Costs as a Percentage of Household Income for Those Paying 30% or More of Income to Housing Costs for the Village of Grantsburg

Less than $20,000

# OwnerOccupied Units 26-80

% Owner Occupied Units 7.7-22.7%

# RenterOccupied Units 45-89

$20,000 to $34,999

7-27

1.9-7.9%

3-17

% RenterOccupied Units 20.139.9% 1.4-7.6%

$35,000 to $49,999

0-15

0.0-4.1%

0-9

0.0-4.2%

$50,000 to $74,999

0-5

0.0-1.4%

0-9

0.0-7.5%

$75,000 or more

0-9

0.0-4.9%

0-9

0.0-7.5%

Source: 2013-2017 ACS Estimates

For a household earning an annual income of $19,999, a $500 gross monthly housing payment would be considered affordable. This includes rent/mortgage, utilities and insurance. If we assume a utility cost of $100 per month and a rental insurance payment of $15 per month, this means that for rent alone, $385 is considered affordable. Keep in mind that this calculation is for households making $19,999 and that there are households earning less for whom $385 would not be considered affordable. Within the Village of Grantsburg alone, currently 35-59% (60-106 units) of rental housing stock falls into this cost range (gross rent of $500 or less) and between 53 and 197 (25 and 88%) of renter households fall into the category of earning an income less than $20,000. This suggests a gap of roughly 50 units at a monthly rental cost of $385. Some of these 50 units should be dedicated for seniors based on the

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increasing median age in the Grantsburg Area from the 2000 Census to 2013-2017 ACS Estimates (40.5 to 41.2-53.5). An aging population is a trend that is likely to continue.

Zoning Code Review There are several areas of a community’s zoning code that we evaluate to see if they may be impeding the development of specific types of housing, particularly affordable housing.

Within the Village there are five different types of residential districts: •

•

•

•

•

R-1: Single-Family Residential District (Low Density) o Permitted uses: Single-family detached dwellings, manufactured homes o Minimum lot size: 0.28 acres R-2: Single-Family Residential District (Medium Density) o Permitted uses: Single family detached dwellings, manufactured homes o Minimum lot size: 0.22 acres R-3: Two-Family Residential District o Permitted uses: Single-family detached dwellings, duplexes o Conditional uses: multiple-family dwellings up to four dwelling units o Minimum lot size: 0.19 acres R-4: Multiple Family Residential District o Permitted uses: Duplexes, multiple-family dwellings up to and including eight units o Conditional uses: Mobile home park, multiple-family dwellings over eight units o Minimum lot size: 0.19 acres R-5: Residential Estate District o Permitted uses: Single-family detached dwellings, manufactured homes o Minimum lot size: 2 acres

Minimum lot sizes are not excessively large, and therefore are assumed not to be a barrier to housing development or to affordability. Manufactured homes are also included in the most widely used zoning districts (R-1 and R-2), offering some locational flexibility. Mobile home parks are allowed as a conditional use in the R-4 district.

When looking at the Village’s Future Land Use Map, a majority of the Village and its growth areas are projected to be single and two family residential areas. The Village’s Comprehensive Plan (2009) estimated that in 2008 there were 440 acres dedicated to residential uses within the Village. The projected demand for residential land in 2030 was 503 acres (an additional 63 acres). Including the residential growth areas outside the Village of Grantsburg, at the time there was a 2,183 acre supply of land for future residential. Based on the minimum lot size in the R-1 district (0.28 acres), this equates to land available for the equivalent of nearly 7,800 new residences. It is likely this number is slightly smaller today as land has been developed in the Village since 2009.

When looking at the zoning map for Grantsburg, the most used zoning type is R-1 (Single-Family – Low Density). There is an area of the Village on the southeast side that is zoned R-2 (Single-Family – Medium Density). There are two pockets of R-3 (Two Family) in the northern part of the Village and three primary areas zoned R-4 (Multiple Family) located near the central part of the Village and one located in north Grantsburg.

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3.3 Demand Versus Supply This section considers the balance between supply and demand in the housing market as revealed by vacancy rates and real estate sales and listings.

Vacancy Rates An important measure of the health of a housing market is vacancy rates. The owner-occupied and rental markets must be considered independently, as they function in very different ways. Figure 3.14 presents both rates and a comparison with peer communities.

For owner-occupied housing, a desirable vacancy rate is under 2%. Owner-occupied housing tends to remain occupied, even while available for sale. Unoccupied units often reflect undesirable circumstances, such as a foreclosure or job relocation that forces a vacancy before a home can be sold, and vacancy rates over 2% are usually a symptom of problems in the local economy. The 2013-2017 ACS Estimate of 0-6.9% vacancy is up from 1.1% in 2000 and is higher than desired. One possible explanation for the higher vacancy rate is that vacancy rates tend to be higher in areas with owned second homes/vacation homes.

For rental units, a healthy vacancy rate is 5-6% of total units – this is an appropriate balance between the interests of property owners and the interests of renters. Substantially higher vacancy rates can make it difficult for property owners to afford maintenance and responsive management; and in the worst case can lead to foreclosure. Substantially lower vacancy rates can lead to rent inflation, enables bad landlords and substandard properties to stay in the market, and makes illegal discrimination in the renter screening process more likely. When renters have choices, property owners are forced to compete and to invest in their units to keep them occupied. The ACS estimates of vacancy rates, especially rental vacancy, are too broad to offer useful information about actual vacancy conditions in the market right now.

Table 3.14 Vacancy Rates for Individual Communities within the Grantsburg Area

Homeowner Vacancy Rate Rental Vacancy Rate

T. Anderson 0-8.4%

T. Daniels 0-8.9%

T. Grantsburg 0-3.9%

T. Lincoln 0-9.9%

T. Trade Lake 0-1.5%

T. West Marshland 0-8.2%

T. Wood River 0-5.4%

T. Sterling 0-6.7%

V. Grantsburg 0-6.9%

0-46.4%

0-27.5%

0-24.3%

0-56.2%

0-41.1%

0-65.6%

0-28.4%

0-21.9%

0-9.5%

Source: 2013-2017 ACS Estimates

Interview Feedback Anecdotal evidence from interviews suggest that vacancy rates for owner- and rental-units may be on the lower ends of the vacancy rates estimated in the 2013-2017 ACS estimates. The general assessment is that there is not enough supply to meet demand for owner-occupied housing and that there are some rental units available in the Village, but most of these units are not desirable.

Real Estate Sales and Listings To evaluate the function of the real estate market we also collected data from the Multiple Listing Service (MLS), which tracks real estate listings and sales. We collected MLS data for communities fully or 17

partially within the Grantsburg School District with assistance from a local realtor and for the county, region, and state from the Wisconsin Realtors Association.

Figure 3.15 shows the number of homes sold each year, 2014-2018, as a percentage of the number sold in 2014. This graph shows that home sales within the Village of Grantsburg have increased by approximately 50% from 2014 to 2015 and then by 155% (from 16 to 28 sales per year for the past three years). Home sales in the Grantsburg area are increasing at a rate that is lower than the Village, but faster than the county, region 1 and state. Home sales increased 15% from 2014 to 2015 and 59% from 2014 to 2018.In Burnett County, home sales increased slowly between 2014 and 2016. In 2017 and 2018 home sales in Burnett County were up 25% from 2014. In the North Region home sales increased about 24% from 2014 to 2018 and in the State, an increase of 21% from 2014 to 2018. In all areas other than the Grantsburg Area, sales between 2017 and 2018 seemed to have remain relatively stable.

Figure 3.15 Home Sales as Compared to 2014 Levels (2015-2018) 180%

28 sales

160%

28 sales

28 sales

932 sales

885 sales

140% 120% 100% 80% 60% 40% 20% 0%

16 sales

844 sales

676 sales

2015

2016

Village of Grantsburg

Grantsburg Area

North Region

State

2017

2018 Burnett County

Source: Multiple Listing Service (MLS)

In general, the housing market is currently tight in the Grantsburg Area, similar to what we see across the state and nation. Months’ supply of homes for sale in the Grantsburg area was 3.8 in April 2019. This is below the recommended 6 months which is considered to be a balanced market. Between January 2014 and December 2016 the months of supply of homes for sale fell from 12.8 to 6.2 in the Grantsburg area. Figure 3.16 shows that nearby communities such as Luck, Saint Croix Falls and Pine City (MN) are experiencing similar shortages.

1

The “North Region” includes Ashland, Barron, Bayfield, Burnett, Douglas, Florence, Forest, Iron, Langlade, Lincoln, Oneida, Polk, Price, Rusk, Sawyer, Taylor, Vilas and Washburn Counties.

18

Figure 3.16 Months’ Supply of Homes for Sale for the Grantsburg Area and Nearby Communities (2014-2019) Luck

Source: Multiple Listing Service

The prices for ownership housing steadily increased from 2014 to 2017 in all areas. In 2018, the Village of Grantsburg, Grantsburg Area and Burnett County saw a decrease in median sale price ($17,000, $3,000, $9,000 decreases, respectively). In 2018 prices in the Village were 19% above where they were in 2014, similar to the change in the County (18%), but lower than the change in the Grantsburg Area (29%), region (26%) and the state (25%). Figure 3.17 shows that the Village has historically had lower median sale prices than the Grantsburg Area, Burnett County, the North Region and the State.

Figure 3.17 Median Sale Price (2014-2018) $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $-

2014

2015

2016

Village of Grantsburg

Grantsburg Area

North Region

State

2017

2018

Burnett County

Source: Multiple Listing Service (MLS)

19

Table 3.18 offers a snapshot of active listings at the end of May 2019 in the Grantsburg Area. These data reveal a little over half of the available single-family inventory is within the Village of Grantsburg. The average listing price in the Village of Grantsburg is higher than the median, a normal finding reflecting the fact that the upper end of the market is further above the median than the lower end is below it.

The Village of Grantsburg has the second lowest median listing price at $137,000, a reflection of the age of many of the homes (approximately 1/3 of homes were built 1900-1970). The Town of Trade Lake has the highest median home price at $249,000 and also the largest average finished size of 2,360 SF. The Village of Grantsburg also has the highest number of days on the market at 100. The lowest average days on market is in the Town of Anderson (8) and Town of Trade Lake (13).

Table 3.18 Current Single-Family Residential Listings in Grantsburg School District Community

Listings

Average Price

Median Price

$74,750

Average Days on Market 8

Average Finished Size (SF) 1,176

Town of Anderson

2

$74,750

Village of Grantsburg

11

Town of Grantsburg Town of Trade Lake Town of Wood River

Year Built 1980-1989

$189,609

$137,000

100

2,055

1900-2001

3

$206,133

$199,000

42

1,771

1982-1999

2

$249,000

$249,000

13

2,360

1983-1985

1

$205,000

$205,000

52

2,357

1970

Source: Multiple Listing Service (MLS)

3.4 Leakage This section describes the portion of the Village and Grantsburg Area housing market that is outside the study area, and offers data to explain this ”leakage” of housing demand to other jurisdictions.

Where Do Workers Live?

So where do the Village of Grantsburg’s workers live? Figure 3.19 suggests that approximately 28% of local workers live in the Village of Grantsburg, 14% live in the Town of Grantsburg, 12% live in the Town of Wood River and the remainder live in surrounding communities, some within Minnesota (e.g. North Branch, Chengwatana and Rusheba). We can also look at the commuting outflow of people who live within the Village of Grantsburg and work elsewhere. Approximately 70% of those living within the Village are working in the Village, 5% are working in the Town of Wood River, 3% are working in the Town of Grantsburg, and the remainder work in various communities in the area and around the two states.

20

Table 3.19 Place of Residence for People Who Work in the Village of Grantsburg, 2013 Place

Count

Share

Grantsburg village Grantsburg town Wood River town West Marshland town Trade Lake town Anderson town Siren town Daniels town Meenon town Siren village Webster village Other Total

365 178 164 77 76 67 37 34 28 24 21 243 1,314

28% 14% 12% 6% 6% 5% 3% 3% 2% 2% 2% 18% 100%

Source: US Census Journey to Workplace Commuting Flows, 2013

Table 3.20 Place of Work for Village of Grantsburg Residents, 2013 Place Grantsburg village Wood River town Grantsburg town Pine City city Meenon town Siren village Rock Creek city Webster village Frederic village St. Paul city Other Total

Count

Share

365 26 14 11 9 7 6 6 6 5 65 520

70% 5% 3% 2% 2% 1% 1% 1% 1% 1% 13% 100%

Source: US Census Journey to Workplace Commuting Flows, 2013

Why Do People Live Outside the Village?

Interview Feedback Beyond a lack of desirable and affordable housing within the Village, several interviews shared a similar consensus that there is a lack of amenities or “things to do� in Grantsburg. Some of the communities that people have more interest in moving to are communities that have more restaurants, entertainment, shopping and housing options such as St. Croix Falls, Taylors Falls (MN), Stillwater (MN), Summerset, Pine City (MN), Rush City (MN), Cambridge, North Branch (MN), Lindstrom (MN), Forest Lake (MN), Frederic, Cushing, Shell Lake, Webster, Siren and Balsam Lake. Often people are willing to 21

commute to work from these outlying locations because they can find acceptable housing a little further out, perhaps at a slightly higher price point that the Grantsburg area (under $200k there vs under $150k in Grantsburg).

Across all interviews, there was a consensus that people do want to live in Grantsburg because there are good jobs – the employers interviewed during this study all paid salaries around the $40-$60k range, an excellent school district and abundant natural resources. For reference, an affordable gross rent or mortgage for a $40,000-$60,000 salary is $1,000 - $1,500 per month.

Taxes Table 3.21 provides context for a discussion about tax rates for the communities that make up the Grantsburg area. Not surprisingly, the lowest rates in the marketplace are all in towns. A $136,800 home will cost the owner about $500 to $900 less per year in taxes in one of those towns than in Grantsburg, based on 2017 rates. Although taxes are highest in the Village, facilities such as wastewater treatment and new road construction are often more expensive in towns, on a per-unit basis.

Table 3.21 2017 Tax Rates for the Grantsburg Area Community

County

Village of Grantsburg Town of Daniels Town of Sterling Town of Trade Lake Town of West Marshland Town of Grantsburg Town of Wood River Town of Anderson Town of Lincoln

Burnett Burnett Polk Burnett Burnett Burnett Burnett Burnett Burnett

2017 Effective Tax Rate 0.01865 0.01494 0.0149 0.01484 0.01423 0.01369 0.01317 0.01317 0.01229

Taxes on $136,800 home $2,551 $2,044 $2,038 $2,030 $1,947 $1,873 $1,802 $1,802 $1,681

Source: Wisconsin Department of Revenue

3.5 Gaps For the purposes of this study, “gaps” are gaps between supply and demand within the regional housing market, such that people who work in the Grantsburg area or want to live in the area are unable to find what they consider to be appropriate housing. This is distinct from leakage, which is loss of market share from the Grantsburg area.

Household Growth Projections The Wisconsin Department of Administration (WI DOA) projects that by 2030 there will be 3,394 households in the Grantsburg Area, or an increase of approximately 480 new households over the next 11 years. The growth in housing units should exceed the growth in households to accommodate 1% vacancy of owner-occupied units and 5% vacancy of renter-occupied units.

Accommodating 480 new households over the next 11 years will require a net addition (accounting for the loss of units in redevelopment) of about 101 rental units (9/year) and about 388 owner-occupied 22

units (35/year). Note, this does not account for the existing vacant owner- and renter-occupied units within the Grantsburg Area. These projected needs are based on the following assumptions: • •

80/20 balance of owner and rental units. This is the ownership balance currently found within the Grantsburg Area.

1% owner vacancy, 5% rental vacancy

At all times there should be a three to five year supply of available lots. This equates to approximately 100 to 180 lots available now for owner-occupied housing and a combination of lots that can accommodate 25 to 40 new rental units. It should be noted that this supply of lots is for the Grantsburg Area, not the Village specifically, however we assume that nearly all of the rental units required will be constructed within the Village. It is up to the Village to decide how proactively it would like to be in getting a portion of the population who desire owner-occupied housing to move to Grantsburg instead of a surrounding Town. The more desirable, developable lots the Village can offer, the greater its chance at capturing new households.

Specific Housing Type Gaps This section identifies gaps in the Village of Grantsburg and the Grantsburg Area by referencing data from the previous section and incorporating more interview feedback to break down the shortcomings of the local housing market.

1. Inadequate supply of owner-occupied units, at all price points All communities across the state are experiencing a shortage in supply of owner-occupied units. The Grantsburg area is experiencing a similar issue and currently has only 3.8 months of supply on the market (6 months is considered ideal). Part of the problem in Grantsburg is that there are a few houses on the market for a long time and other houses are not going on the market, in addition to few new homes being built. Over the past five years there have been only two single-family homes units built in the Village. In order to have sufficient housing for the projected population growth in the Grantsburg Area, there will need to be an annual net addition of approximately 36 homes per year. Note that although the remainder of this subsection focuses on the Village alone, the projection for the additional 36 homes is for the Grantsburg Area; it is up to the Village to decide how proactive it will be at attracting this population to move to the Village instead of a surrounding town. The more desirable housing and vacant, developable lots the Village can offer, the greater its chance at capturing this influx of people.

2. Inadequate supply of desirable owner-occupied housing under $200,000 Data from the MLS indicate that housing in the Grantsburg area is relatively affordable; the median sale price in 2018 was $122,302. This is lower than median sale price in the County ($152,242) and the North Region ($152,006). Prices are low and there are homes listed for sale, however anecdotal evidence from the interviews coupled with ACS data on the age of housing stock indicate that many of the options in the Village are undesirable and many of the options in surrounding Towns are too expensive, particularly for those looking for starter homes (generally in the $100,000-$200,000 price range). Anecdotal and statistical data confirm that there are potential residents willing and able to pay slightly more than the average cost in Grantsburg. Those who aren’t finding acceptable housing

23

in Grantsburg are often looking in nearby cities and villages and finding what they need (e.g. St. Croix Falls, Rush City, Stillwater, Somerset).

3. Inadequate supply of acceptable rental units at all price points Rental units in the Village of Grantsburg appear to be affordable; median rent is between $445 $889/month. However, there is a concern about the quality of those units. Rental housing tends to wear out over time and requirement replacement or major reinvestment after several decades to maintain safety and market relevance. A related issue with lower quality units is that they risk falling into a pattern of disinvestment and weaker tenant screening and property management practices.

Some anecdotal evidence from the interviews suggest that some disinvestment in apartment units is already occurring.

Interviewees also noted that there is a need for well-maintained rental units with two to three bedrooms for families. These types of units should be encouraged within multi-family housing buildings (at duplex, triplex, fourplex or greater density). The intent is not to encourage single-family home rentals as a means to fulfill this gap since conversion of single-family homes from owner- to renter-occupancy typically occurs for single-family homes at the lowest end of the market. Although this is the typical pattern, not all single-family conversions are undesirable.

4. Inadequate supply of housing for senior citizens The population in Grantsburg is aging as evidenced by the increase in median age between the 2000 Census and the 2013-2017 ACS Estimates (40.5 to 41.2-53.3). As Baby Boomers continue to age, we expect this trend will continue. Interviews also noted that there is a need for more senior housing. If more senior housing is developed, this would also free up additional homes that could be a good fit for those looking for starter homes. The Village should support and encourage the development of units targeted to age 55+ residents, including both affordable (income qualified) and market rate units, and including both rental and owner-occupied units (i.e. condo units). The Village should consider creating additional programs to help seniors stay in their homes if they wish to do so, including help with chores and handyman tasks necessary to the proper upkeep of the home.

3.6 National Trends affecting Grantsburg Area Housing Though not at the forefront of any national trends, the Grantsburg area remains connected to and affected by trends affecting housing across the country, including changes in financial regulation, demographics, development practices and cultural norms. The section describes some of the most relevant changes affecting housing demand in the Grantsburg area.

1. Household size and house size Household size – the number of people living together – has been in decline for more than 50 years due to multiple related trends. In 1960 the average U.S. household size was 3.35 people, and by 2010 it was 2.59. Causes include declining birthrates, declining marriage rates and increasing age of first marriage, and increased longevity. In other words, people are spending more of their lives single, and those that choose to be parents are having fewer kids.

24

The effects of these changes on housing are varied, and not always predictable. The size of new houses has increased more or less steadily over the past 40 years, from an average of 1,400 SF in 1970 to an average of 2,600 SF in 2013. While households have been shrinking, families have been giving children their own rooms and designating separate spaces for things like home offices. There has been a modest trend back toward smaller units, even “tiny house” living, but these are not visible in the continuing overall growth of the average home size. A more predictable trend is the growth of retirement housing to accommodate the needs and interests of older people, many of whom live for years as one-person households. National data on apartment size suggest they too have grown, though not as dramatically, to an average of about 1,000 SF. 2. Aging Population Trends in US Census data show that the segment of the population age 65 or older is increasing across the nation. The Population Reference Bureau (PRB) estimates that the number of Americans age 65 and older is projected to more than double between 2014 and 2060. As Baby Boomers age, we expect the number of seniors in Grantsburg to continue to rise.

PRB notes that, especially in the Midwest, those age 65 and older are choosing to age in place.

The second most common type of unit for this age cohort is within apartment complexes containing 20 or more units (19%). Due to the high number of seniors aging in place, accessibility improvements are critical as is offering senior apartments.

3. Housing Affordability Large-scale economic trends are bringing housing affordability into focus as a prominent issue across the country. While the household income of the top 5% of US households has more than doubled in the past 50 years, middle income households have seen only about a 10% increase in that period. Meanwhile, inflation-adjusted housing costs have risen roughly 50% for rental housing and 70% for home ownership in that period. The result of these trends is that housing is requiring a bigger portion of household incomes. Thirty percent of income has long been viewed as the standard threshold for “affordable”, as defined by the federal government. Between 20% and 24% of owners and 32% and 51% of renters in the Village of Grantsburg currently pay more than 30% of their income for housing.

Local governments are now stepping in to address the challenges around affordability. Spurred by business concerned about hiring needs, complaints from residents who can’t find desirable housing within their budgets and community concerns about declining conditions due to lack of reinvestment in housing, communities are coming forward with policies and initiatives to address this challenge.

4. Stricter Lending Regulation, More Student Loan Debt, and Delayed Home Ownership Lender underwriting requirements have stiffened considerably in the wake of the housing crisis that caused the Great Recession. In January 2014, provisions of the Dodd-Frank Act kicked in that establish standards for a “qualified mortgage” that can be purchased by Fannie Mae or Freddie Mac. The standards compel banks to verify that borrowers’ debt-to-income ratio 25

doesn’t exceed 43 percent of their gross income, part of an effort to prevent people from overexposing themselves to the risk of foreclosure. Banks that fail to verify this debt ratio can be sued by the borrower if he or she later defaults on the loan. The long-term effects of this regulation are uncertain, but it is fair to assume that some aspiring homeowners will be protected from foreclosure by being denied a mortgage in the first place.

With the rise in housing costs and stricter borrower protections, this also means that first-time homeownership is more difficult to accomplish due to rising down payment and closing costs.

According to the State of the Nation’s Housing Report 2018 (Joint center for Housing Studies of Harvard University), the share of US households with student loans nearly doubled from 12% in 1995 to 22% in 2016. Just over 45% of households age 20-29 have student loan debt and just over 40% of households age 30-39 have student loan debt 2.

The combined effect of increased student loan debt, increased ownership costs, and stricter borrowing rules is a delay in the average age of first-time home ownership. The National Association of Real Estate found that between 1993 and 2018 the average age of first-time home buyers rose from 26 to nearly 34.

5. Planning and Development Practices The dominant trend in community planning and development after World War II was the segregation and concentration of uses and housing types – stores here, single family homes there, apartments somewhere else. This trend has been shown to weaken neighborhoods and communities by isolating people. It is now generally recognized that healthy neighborhoods are those that people can stay in over time as their needs and interests change. Healthy neighborhoods include a mix of housing types, sizes, and price points, and they often include or are near to stores and restaurants. Healthy neighborhoods are also walkable, enabling anyone unable to drive – kids, seniors – the ability to get around safely. Grantsburg is similar in size to a neighborhood in larger communities, but the same principle applies – these uses and housing types need not be isolated from each other.

CHAPTER 4 – Recommendations Chapter 4 offers strategies to meet the housing gaps discussed in section 3.5. Strategies are identified for the Village alone because Grantsburg has less control over policy and implementation in the surrounding towns. Also, as evidenced by the housing data, the Village and the wider Grantsburg Area have very different housing markets; the Village’s housing stock has more rental stock, lower rents, housing is generally much older and consequently housing values are much lower.

2

http://www.jchs.harvard.edu/state-nations-housing-2018

26

Goal 1: Develop Local Funding to Address Housing Issues Strategy 1.1

Create an owner-occupied housing rehab and development revolving loan fund

A revolving loan fund (RLF) is a pool of capital from which loans are made and to which the loan repayments are returned. The fund revolves in the sense that the loans initially lent out come back to be used again for similar projects and the same capital is circulated again and again. Typically, the principal repayments go back into the fund, and the interest payments and associated lending fees paid by the borrowers go toward the administrative costs of running the RLF. RLFs are frequently created to serve a specific mission including targeting housing for low-to-moderate income households, though the Village can establish its own rules if using its own funding. Grantsburg can use this fund to support reinvestment in single-family homes.

• • •

Responsible Party – Village Board Cost – Medium-High Priority – 2021

Strategy 1.2

Create a rental housing rehab and redevelopment revolving loan fund

A rental rehabilitation program would offer financial assistance for building/unit rehabilitation to rental property owners. This program could be set up as a revolving loan fund similar to the recommendation in Strategy 1.1. This revolving loan fund should be designed to be layered with the 4% Low Income Housing Tax Credit (LIHTC) funding discussed in Strategy 3.3.

• • •

Responsible Party –Village Board Cost – Medium-High Priority – 2021

Strategy 1.3

Utilize Tax Increment Financing One Year Extension

A TIF district can be held open for one additional year beyond its planned or maximum duration to generate funds that will be used for affordable housing. 100% of the increment collected in that extra year can be used for housing anywhere in the Village, with the stipulation that 75% must be used for affordable housing. More information can be found in section 66.1105(6)(g) of the State statutes.

Currently Grantsburg has three open TIF districts (#3, #4 and #5). TID #3 and TID #4 would both be short-term candidates for the one-year extension as their projected closure dates are approaching: 9/12/2021 and 9/12/2025, respectively. In 2018 TID #3 had an increment of $6.7 million and TID #4 had an increment of $2.8 million. These TID closures are the Village’s best opportunity to capitalize an Affordable Housing Fund.

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Responsible Party – Village Board Cost – Low Priority – 2021

Strategy 1.4

Offer a Local Match to Attract WHEDA Tax Credits

The scoring for WHEDA tax credits rewards projects that have grant or loan funding from the local government. The Village could use local TIF funds and General Obligation Bonding funds in an Affordable Housing Fund to leverage LIHTC federal and state tax credits (Strategies 3.3 and 3.4).

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Responsible Party – Village Board Cost – High Priority – 2022

Goal 2: Expand Options for Homebuyers As discussed previously in the report, household projections for the next 11 years for the Grantsburg Area necessitate a net addition for about 388 owner-occupied units (35/year). Multiple Listing Service (MLS) data suggest that supply of available homes in Grantsburg is tight and additional housing needs to be developed. Price point on the majority of these new homes should be $100,000 to $200,000. A selection of smaller units on small lots in encouraged to accomplish a lower price point. With a relatively low median income of $26,401 to $43,055 in the Village of Grantsburg, this lower price point will be most attainable for existing and future residents – in particular those who have the most need within the community. That being said there is still anecdotal evidence suggesting some of this new owneroccupied housing should be priced $200,000 to $250,000 – these homes with higher values are more easily found in surrounding towns right now.

Strategy 2.1

Consider subsidizing new owner-occupied housing development

Towns do not require much infrastructure with housing development, whereas cities and villages do. To make development costs more competitive in the Village, Grantsburg could use TIF to fund infrastructure for new housing development. The Village Board should review current practices and discuss the use of TIF to support housing development in general and single family housing in particular.

The Village could also consider funding 100% of the infrastructure up front and recovering the costs through special assessments.

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Responsible Party – Village Board Cost – High Priority – 2021

Strategy 2.2

Employer-Assisted Housing (EAH) Program

Employer-Assisted Housing (EAH) programs can be established by major employers, either individually or in partnership to promote home ownership within the community. Due the abundance of employers within Grantsburg who appear to be offering competitive salaries, this strategy could bring a lot of value to employers and the Village. EAH programs provide downpayment assistance for employees that live in the community where they work. This assistance is often coupled with First Time Buyer Education programs. The EAH model benefits employers and employees by decreasing commute times and increasing employee loyalty.

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Responsible Party – Local employers Cost – Variable, could encourage with TIF support Priority – 2022

Strategy 2.3

Enable Cottage Courts

Cottage Courts are a series of detached, single-family homes arranged around a shared court that is typically perpendicular to the street. The shared court takes the place of a private rear yard and is an 28

important community-enhancing element. Cottage courts typically include smaller homes (500-800 square feet) and offer lower price points, so they are ideal for first-time homebuyers or retirees who want to downsize. As compared to traditional single-family home development, Cottage Courts can lower the cost of infrastructure to serve the development and they have less of an environmental impact as they increase density. The Village should promote the use of cottage courts through use of its planned unit development (PUD) zoning district.

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Responsible Party – Village Board Cost – Low Priority – 2020

Strategy 2.4

Promote existing programs for first-time homebuyers

The Wisconsin Housing and Economic Development Authority (WHEDA) offers loans and downpayment assistance for first-time homebuyers. These programs are for income qualified homebuyers. For people within Burnett County the income limits for this program are $43,400 for two person households, $48,850 for three person households and $54,250 for four person households. The purchase price limit for single-family homes in Burnett County is $346,315. If new housing were constructed in the $100,000 to $200,000 price range, these homes would qualify under the current WHEDA program.

The Federal Home Loan Bank of Chicago also offers a downpayment assistance program which is available to all income qualified buyers (households earning no more than 80% of the area median income). For this program the borrower must contribute a minimum of $1,000 toward the purchase and complete pre-purchase homebuyer education and counseling. The maximum grant amount is $6,000.

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Responsible Party – GRO Housing Subcommittee Cost – Low Priority – 2020

Strategy 2.5

Identify sites for development and redevelopment

To encourage developers to develop within the Village, Grantsburg should provide useful information about development-ready sites. Infill development sites will also be important for increasing property values, the appearance of neighborhoods, and the tax base. Multi-unit housing, including senior housing, is the most likely housing type for redevelopment projects.

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Responsible Party – Village Staff Cost – Low Priority – 2020

Goal 3: Expand Options for Renters As discussed previously in the report, over the next 11 years there is a need for a net addition of about 101 rental units (9/year) in the Grantsburg Area. New construction should target the full spectrum of prices and incomes, however a priority should be placed on apartments with rents at $500 or less to provide more options for existing and new residents who are most likely to be cost burdened by rent.

Some of these 50 units should be dedicated for seniors based on the increasing median age in the Grantsburg Area.

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The development of additional apartment units within the Village will put pressure on existing landlords to maintain the quality of their units. One unintended consequence that could occur with the addition of more apartment units is that it could drive prices of apartment units up across the board. Since prices are relatively low in Grantsburg right now, this cost does not outweigh the benefit of new units. This could also have the unintended consequence of leading to foreclosures on the poorest-quality properties.

Strategy 3.1

Designate more land for multi-family residential use

The Village should consider dedicating more land to multi-family residential as a majority of the Village and its growth areas are planned for single- and two-family residential. At the time, the 2009 Comprehensive Plan showed that there is land available, or available to be added to the Village, that provides space for approximately 7,800 new residences (when using the minimum lot size in the R-1 district of 0.28 acres and assuming the majority of these properties are single family). Adding more multi-family does not necessarily mean adding all large multi-family complexes. Additional land can be designated for multi-family purposes on the future land use map through a Comprehensive Plan amendment. This should be reflected on a wider use on the future land use map, particularly as areas redevelop in Grantsburg.

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Responsible Party – Plan Commission & Village Board Cost – Low Priority – 2020

Strategy 3.2

Develop Additional Housing Opportunities for Seniors

While many seniors do prefer to age in place, there are those that are looking for independent living or assisted living facilities. The availability of these types of housing would help open up more owneroccupied affordable housing in Grantsburg. New housing products for seniors that should be considered include independent living rentals, assisted living facilities, nursing homes and for-sale condominiums.

Seniors will for personal or financial reasons reach a point when they seek to downsize into smaller and more maintenance-free living arrangements.

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Responsible Party – Private Developers Cost – Low Priority – 2021

Strategy 3.3

Utilize Federal Low Income Housing Tax Credit (LIHTC) (Section 42 Housing)

LIHTC (or Section 42) is a federal program which gives the Wisconsin Housing and Economic Development Authority (WHEDA) the authority to issue tax credits for acquisition, rehabilitation, or new construction of rental housing for low-income households. This program is a key funding mechanism being used to create affordable housing across the nation. When a project is completed, investors can deduct from their taxes about 4% or 9% of their investment in the project each year for ten years. LIHTC developments must continue to meet the established affordability requirements for 30 years, either 20% of units affordable at 50% of the Area Median Income or 40% of the units at 60% of AMI. WHEDA monitors the condition of each project awarded with credits to ensure they stay in good repair, have acceptable management practices and maintain affordability. There are two types of tax credits available within the LIHTC program: 30

Federal 9% Tax Credit - Competitive The 9% tax credit is available for new construction and rehabilitation projects that do not have other federal funds. Nine percent (9%) tax credits are received through a competitive application process with WHEDA. Per WHEDA guidelines, projects require a local funding match in order to score well (see Strategy 1.4).

Federal 4% Tax Credit - Non-competitive The federal 4% tax credit is available for acquisition, new construction and rehabilitation projects, and is often used for rehabilitation. These funds can be used with other federal funds. Four percent (4%) tax credits are received through a non-competitive application process with WHEDA. Four percent (4%) tax credit projects are often more difficult to use because they require a mixture of funding sources, of which local funding is important (see Strategy 1.4).

• Responsible Party – Private Developers • Cost – Low • Priority – 2022 Strategy 3.4

Utilize Wisconsin Low Income Housing Tax Credit

State of Wisconsin 4% Tax Credit - Non-competitive The state 4% tax credit is available for acquisition, new construction and rehabilitation projects. Again, the rehabilitation aspect of this may be most beneficial to the Village. These state credits can be used to match the 4% federal funds. The state 4% tax credits are received through a noncompetitive application process with WHEDA. The credits are awarded only if they are necessary for the financial feasibility of the property. A preference is given to developments located in municipalities with fewer than 150,000 people.

• Responsible Party – Private Developers • Cost – Low • Priority – 2022

Goal 4: Provide Good Quality Housing in Clean Neighborhoods Strategy 4.1

Enforce Property Maintenance Ordinance

Several interviews noted that there are some properties within the Village where property maintenance is an issue. Chapter 415 of the Village of Grantsburg lists requirements for property maintenance. The Village should enforce this ordinance. The Village could also consider amending this ordinance to include a section on general exterior requirements – keeping property exteriors in a clean and sanitary condition, meaning free from debris, refuse, etc. Maintenance of property is an important element that impacts property value, and is also important to the community’s stability and health.

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Responsible Party – Village Staff Cost – Low Priority – 2020

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Goal 5: Make Grantsburg a Great Place to Live Strategy 5.1

Continue Revitalization Efforts

Outside of the existing housing stock, anecdotal evidence from the interviews points to a lack of amenities and things to do within the community as another common reason people choose to live elsewhere. A vibrant community can help attract and retain workers, especially young professionals who are drawn to places that offer amenities such as restaurants, opportunities for recreation and other activities. The GRO’s Town Renewal Subcommittee should continue its efforts and focus on exploring opportunities for redevelopment within the community that would contribute to the vibrancy of the community.

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Responsible Party – GRO Cost – Low-High Priority – 2020

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