More than 700 new apartments and multi-family housing units will be created within the next year around Wausau. Turns out, the area has been way under supplied for some time.
Up until a few years ago, a large, multi-family housing development was a hard sell in Wausau. Some city council members vocally connected a proliferation of apartment buildings with crime, poverty, and a general degradation of neighborhoods. Former Mayor Tipple had to break a tie on a riverfront housing development that was opposed by half the council partly for those stated reasons.
Today local leaders hear from businesses, especially bigger companies such as the Medical College of Wisconsin or Greenheck Fan, that their employees have nowhere to live. That seems crazy, right? How can a metro area with 80,000 people be short on housing?
But talking with city employees, local developers, or business leaders leads to one conclusion: The Wausau area doesn’t have a large enough variety of housing options, especially quality rental units.
With their own research, housing developers have known this for years, of course. That’s why in the next year or two, huge developments will pop up around the Wausau area, and construction has begun on many of them. In all, City Pages tallied more than 700 new units that will open within the next few years.
The much-ballyhooed East Riverfront Development will add roughly 270 units or so to east Wausau, but there are major developments that local property management company S.C. Swiderski is moving forward with on the west side of Wausau and throughout the city.
Urban West, Swiderski’s 132-unit apartment complex on Wausau’s west side near NTC.
Other mid-size cities in Wisconsin—especially ones Wausau competes with for workforce talent—are ahead of the curve when it comes to modern ideals of housing. Consider Eau Claire, with a population of nearly 70,000 in the city proper and 129,665 in its metro area. Eau Claire has added large rental developments or repositioned existing downtown property into rentals nearly every year since 2009. That has helped Eau Claire become one of the most-hyped mid-size towns in America and see a 3% jump in population since 2010, the largest in the state outside of Madison.
“We are behind the ball. We are catching up and being proactive, but we have not kept pace with our peers,” says Chris Schock, Wausau Planning, Community and Economic Development Director. “We have to have new, high-end residential apartments within the core of the city if Wausau is going to be marketable to those professionals who look at working in the city.”
Research supports the idea. The Wausau area is predicted to add 22,000 new jobs over the next decade, according to a recent North Central Wisconsin Regional Planning Commission report. Most of these new jobs will be in manufacturing and healthcare, and people who fill those jobs need somewhere to live.
That means now. “I think what’s loudest in our ears is the desire of people to build a tax base and bring more jobs to this community,” says Wausau Alderperson Pat Peckham.
Here are the major developments happening around Wausau:
• Timberwolf Suites near Northcentral Technical College, a 75-unit apartment complex, to open in January 2018 (50 units already are rented out)
• Westwood Estates, Swiderski’s 80-unit, 16-building rental development on the northwest side of Wausau, opening in early 2018
• Urban West, Swiderski’s 132-unit apartment complex on Wausau’s west side near NTC. Phase one (66 units) will open by end of 2018
• Row houses on Third Street, a 10-unit development of tightly spaced, single family rental homes set to break ground this fall and be complete in 2018
• Riverlife Village on Wausau’s east riverfront, a potential 270-unit development that includes apartments, condos, and townhouses. First phase could open in fall 2018
• Sav-o Supply Building lofts, a 29-unit apartment complex near the east riverfront, open in early 2018
• City View Apartments in the former Stahmer Clinic, a recently opened 10-unit apartment complex near Fourth Avenue and Stewart Avenue, only two vacancies currently
• Glade Subdivision in Kronenwetter, a 104 unit apartment development expected to be completed in fall 2018
• Swiderski this week got initial approval for a proposed development of 244 multi-family units (rentals) and 36 single-family homes off 72nd Avenue on Wausau’s far west side. Depending on wetland delineation, the project could break ground in late 2018.
The Sav-o Supply Building apartments, in a former eyesore near Wausau’s east riverfront, will include 29 units—a mix of lofts, multiple bedrooms, and affordable efficiencies.
Empty apartments and houses?
There still are detractors to adding more rental properties. Can the area sustain that much of an addition to its housing? Will houses become vacant? How can smaller landlords—especially those who own older houses—compete against these huge developments?
Alderperson Dennis Smith was the only city council member to vote against the Riverlife Village project last summer. Smith has been a strong opponent against the use of public money to finance private projects, and the east riverfront development will use $6 million in city funds to get the project going. But where another of his concerns lies is in whether or not the developments across the city will actually have renters. And if they do, what does that mean for single-family homes across the city?
“Mr. Swiderski thinks there’s a market for those apartments. I guess he must’ve done his research, but frankly, I don’t think there is,” Smith says. “I think he may be sitting on a lot of empty apartments, but that’s just my opinion.”
Jacqui Miller, Marketing & Real Estate Manager for S.C. Swiderski, doesn’t see it that way. Though its Westwood Estates won’t open until early 2018, Miller says all the units in the complex are already rented out and there’s a long waiting list of would-be tenants.
The success of the Westwood project caused S.C. Swiderski to green light its Urban West development, which it broke ground on earlier this month. The apartment complex at North 12th and Merrill Avenue on Wausau’s west side, is a $22 million, 132-unit development.
“We want to meet market demands and provide as many options as possible in the Wausau area. We want to attract people and fill as many jobs that are open,” Miller says. “We’re constantly getting calls from people who are on the higher end of the market and we’re not able to serve them.”
Miller’s mention of “higher end” is important. Higher end to most developers in the rental market means four-star apartments and above. As of now, only four or five apartment complexes in Wausau meet the four-star standard, and none are five-star, according to CoStar Group and apartments.com. (These are the types of units that would rent out for around $1,000 or more for a two-bedroom.)
Pfefferle Management, the landlord for Riverlife, is positioning the development to be a five-star complex, something Senior Property Manager Consultant Corleen O’Malley says Wausau sorely needs. “We hear a lot from the businesses we talk to that say there’s nowhere they can have their executives go to rent,” O’Malley says.
O’Malley looked at the high occupancy rates and low vacancy rates when determining how many units could be sustained in the Riverlife Village development. That type of research is what many development companies perform before moving forward with large projects.
“That research told me (Wausau) is a little underserved,” O’Malley says. “There’s room for additional apartments at all levels… The kind that we’re building and Swiderski is building aren’t even represented in this area at all.”
A problem with five-star rentals is they can price out your average person. According to the National Low Income Housing Coalition, the average wage a Wisconsinite must earn is $16.11 per hour to afford a two-bedroom apartment without paying more than 30% of their budget. One of Alderman Smith’s concerns when he voted against Riverlife Villages in 2016 was they weren’t going to be available to people of all socioeconomic levels. The cheapest Riverlife apartment, a one-bedroom unit, costs $925 per month, while the most expensive are two-bedroom, two bathroom apartments that will run $1,725 per month. For the record, a person would need to make $69,000 a year to afford a two-bedroom Riverlife apartment.
O’Malley says the apartments aren’t supposed to be for everyone—that’s what she means about Wausau needing a variety of options. “There are going to be certain people who can’t afford it but we think there’s going to be enough people who can afford this and want to move here,” O’Malley says.
There certainly are people who can afford the condos being constructed as part of the River Life development—people already are lined up for all 18 of the yet-to-be-built units.
Who will live in these rentals?
Whenever Chris Schock speaks to local businesses, he hears about how incoming workers lack options when it comes to rental properties—the choice is either buying a single-family home or renting in a basic apartment complex.
“A lot of that has to do with the missing middle,” Schock says.
What is the “missing middle?” It’s row houses, townhouses, duplexes, quadplexes and courtyard apartments. “We just don’t have that amount of housing choices,” Schock says.
But combined, the upcoming developments like the Third Street row houses, Westwood, Riverlife Villages, and Sav-O Supply do provide that variety.
The key is making sure they don’t sit vacant, so many of these are designed for millennials and empty-nesters, the two sectors most likely to be interested in renting.
Millennials especially are interested in rental properties, as the home ownership rate of 34.1% among Americans under the age of 35 is barely more than half the national number of 62.9%, according to the U.S. Census Bureau. In 2005, there were just 10 million Americans in their 50s and 60s that were renting, but by 2015, that number had jumped to 15 million, per the Joint Center for Housing Studies of Harvard University.
Christopher Knight, Student Services Program Manager for the Medical College of Wisconsin, knows a lot about the struggles students face when it comes to finding quality housing in central Wisconsin. Many students he’s spoken with in the past few years said they were priced out or had to go into sub-standard rentals. “All our students have found housing but it’s not always easy. There’s not a lot in between for young professionals on a budget,” Knight says.
Other communities in central Wisconsin are dealing with the same issues. Stevens Point Director of Community Development Michael Ostrowski says he often hears new employees to the area say don’t have choices when it comes to housing. “The supply is here, but the quality and the amenities that individuals choosing to locate here want to see in housing isn’t,” Ostrowski says.
That was one reason Stevens Point conducted a housing study in 2017, and Ostrowski says the city is starting discussion on how to implement the suggestions it was given.
Although Wausau isn’t a university town like Stevens Point, the ability to provide housing for students at UW-Marathon County, Northcentral Technical College, Rasmussen College, and the Medical College of Wisconsin is something that needs to happen.
NTC embarked this year on the addition of its own set of apartments, Timberwolf Suites, which are nearing completion. The NTC President Lori Weyers says the medical college and even businesses have approached her about using Timberwolf Suites for housing.
The biggest thing Wausau can do in the next decade is to continue housing development, but in a smart way, Schock says. Sometimes that means city incentives for a developer.
“Whatever Eau Claire has, Wausau can have. If they can do it there, then we can too. We compete against them for the interest of developers and workforce talent,” Schock says. “What we’re doing is catching up.”