The challenge of single-family housing

Looking at the data around new homes in Wausau

This week the city said no to a proposal that would have seen the city spend $350,000 on a home that would have sold to a single family for $140,000. The Wausonian highlighted all the details and why Wausau leaders ultimately found it unpalatable in this story:

The proposal, despite being greenlit 3-2 at the city’s Economic Development Committee, was dead on arrival at the city council floor. Mayor Doug Diny called it a lottery for one lucky family (and maybe a burden, depending on how the house was actually evaluated - would they end up paying taxes on a $140,000 home or a $350,000 one?). Not too many people disagreed with his statement - the cost didn’t seem worth the limited impact building the house would have.

But the whole thing begged the question: Just what IS going on with single-family home construction in Wausau? Are homes actually being built? At what rate?

From the data available on the city’s website, I put together some numbers. It turns out there has been a downtrend in new home construction.

A big caveat, that I will let readers take as they may - 2021 is potentially artificially high because a company installed a number of mobile homes in a park called Lazy Acres. At first I thought it was a mix of housing and mobile homes, but Chief Inspector Bill Hebert explained that there was a change in classification at the state level that led them to classify mobile homes as new single-family housing instead.

I didn’t remove them, because they are still homes people can live in and by all accounts it’s a pretty nice place. (They look like small modular homes.) But they’re also sort of an anomaly in the data.

Here is a graph where I added a line for the homes that aren’t part of the subdivision/park.

(Caveat: Folders on the city’s website didn’t have actual monthly permit reports prior to 2020. So I don’t know if 2019 had any Lazy Acres properties. You’ll want to take that year with a grain of salt.)

Hebert told The Wausonian that otherwise they don’t get too many new single-family home building permits these days. That aligns with what the data suggests. Hebert has staff working on getting me numbers for prior years so in a future story we can look at the longer trend.

I was a bit surprised with what I saw in the permits I did find. Quite a range of house styles from 4-5,000 square foot mini mansions to houses as small as 1,200 square feet. I’d had the sense that houses the size found in my own Southeast Side neighborhood weren’t really being built anymore. But that doesn’t appear to be the case (most seem to be in the 2,000-3,000 square feet range).

Demand

City Council Member Chad Henke made a point at Tuesday’s meeting that seems salient here. “The question is who is going to be building single-family homes in the next ten years if it’s not subsidized somehow,” Henke asked rhetorically. “No one is going to be building single-family homes. And that really scares me.”

But that said, the demand is there, says real estate agent Lora Bladow. Bladow told The Wausonian that newly constructed homes typically sell before they’re even built.

But that doesn’t mean they’re in Wausau. D.C. Everest is currently the main focus for families right now, for instance. Other real estate agents in the past have told The Wausonian the same.

And Dave Eckmann, the Greater Wausau Chamber President/CEO, told me single-family housing is a huge issue in Wausau.

Hebert agrees. He said there isn’t a lot of space left to build new houses.

The higher tax rate Wausonians pay compared to surrounding municipalities doesn’t help.

Much more to dive into

This looks like the start of a series. I plan to start collecting data from other municipalities to see what kinds of numbers they’re seeing. It’ll be interesting to see if it’s a Wausau trend or a bigger one. I suspect it’s a bigger one.

Why does this matter? Families can be raised in an apartment but generally speaking, those looking to start a family prefer their own home. That could be rented, but it gets expensive. A house similar to mine in my neighborhood (actually about 300 square feet smaller) is renting for $1,300.

And with low inventory, as reported in pretty much every installment of our quarterly housing report Getting Real with Real Estate, more new homes are needed to free up older homes.

A report I received recently from the county produced by consultant Forward Analytics details why. Between 2000 and 2023 the number of people under 18 dropped by nearly 8%. In Portage County, that number dropped by nearly 18%, and more like 33% in Lincoln County.

The report was commissioned by the Wisconsin Counties Association. County leaders, economic development leaders and others are concerned about the aging population and lack of young members of the workforce.

Having housing for those young workers, especially as they get older and want to start families, will be a big part of that.

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