The Community and Economic Development Committee met 04/12/2023. Most of the meeting was taken up with an Appleton Housing Overview in which Community and Economic Development Director Kara Homan and City Planner Jessica Titel talked about the overall housing situation in Appleton and the surrounding area as well as the steps the city was taking to promote housing development and affordable housing.
I’ve prepared a transcript of the discussion which includes the slides.
You can also download the slides separately.
Appleton’s housing market is connected to a broader housing market that stretches from Oshkosh to Green Bay. Regionally, this is one of only a handful of areas in the state whose population had continued to increase.
Director Homan noted that while the population was increasing, household size was decreasing which meant that not only did the housing have to meet the needs of more people but it also needed to meet the needs of an increasing number of household units. The change in family unit size along meant that, even if the population had not increased, the region would still need more housing units. [I took that as meaning that where a family of four could be served by one house, it would require two houses to serve two families of two.]
For a housing market to be considered healthy, a region generally needs a vacancy rate of between %5 and 8%. That results in enough empty houses/apartments/etc. being available so that people who are moving can easily find enough products in the marketplace to find what they need. Appleton, at 4.1%, was a little short of that 5% number but the rest of the area was also below the 5% number ranging form 4.2% vacancy in Neenah all the way down to only 0.2% in Greenville. This was an indication that supply was not keeping up with demand which was resulting in upward pressure on rent and housing prices.
Between 2020 and 2030, Appleton needed to produce a total of 2,640-4,293 additional housing units to meet demand and the greater Outagamie County/Fox Cities area needed an addition 10,910-17,738 housing units.
The City of Appleton itself estimated that it needed between 1,750-1,850 owner occupied units and 1,150-1,250 rental units. They wanted those housing units to be spread out across all income levels.
Director Homan specifically addressed housing that was affordable to low-income buyers/renters. She said that the demand for that level of home was met when new houses were built freeing up older and smaller houses. In terms of rentals, the market did not support that level of cost, without direct subsidies or incentives through things such as WHEDA tax credits, housing authority, TIF incentives, and American Rescue Plan Act payments. [I would have thought that the same dynamic with houses would have held true for rentals—i.e., the older, dumpier, smaller apartments would have to decrease their rent as newer apartment complexes were built.]
Director Homan touched on what was considered “affordable” for each different income bracket. The Federal Housing and Urban Development agency generally considered affordable housing to be no more than around 30% of a household’s monthly income going to mortgage/rent and utility payments. She included a slide that showed the estimated annual salary for various types of work and indicated where those would fall on the income scale from “Extremely Low Income” up to “High Income”.
[I felt that the slide was not as helpful as it might have been because it didn’t seem to take into account the fact that many households are dual income households nor that people in the lower income levels can receive a lot of financial assistance from the government in terms of things like the child tax credit and the earned income tax credit as well as having their health insurance costs covered by qualifying either for Medicaid or general insurance premium subsidies. An end result is that these lower income households might very well have much more money annually than is recorded as income and also not have some of the routine monthly expenses that eat into the funds of higher income households.]
Director Homan said that the city needed to find ways to create different housing products to create choice in the marketplace. She particularly mentioned the aging population which may not want to stay in a single-family home. Unless there were other products for them to move into such as condos or smaller products, they would have to stay in their single-family homes that might better meet the needs of other families. They wanted to bring in more options in between duplexes and large apartment complexes such as townhomes, triplexes, and accessory dwelling units.
In addition to increasing housing supply, the city needed to preserve and maintain the existing housing stock by doing things such as
- Improve housing that has fallen into disrepair
- Improve the functionality of older homes
- Stop the deterioration of units before condemnation
- Improve neighborhood performance (property values, curb appeal, etc.…)
- Preserve the property tax base
- Incorporate ADA-accessible home improvements
They could do this by code enforcement and offering programs to help homeowners to need financial assistance to fix their homes.
There were some major things that the city at the local level could not control such as interest rates and how that impacts housing affordability of new homeowners.
There were, however, some things that could be done locally which Appleton had been doing and continued to do.
In the downtown area they implemented a number of changes.
- They supported private sector efforts to redevelop and invest in downtown by creating Tax Increment Financing Districts 11 and 12.
- They revised the Central Business District zoning guidelines to allow first floor dwelling units and stand-along residential developments in the Central Business District except for on College Avenue along which which they wanted to maintain retail store fronts.
- Encouraged mixed-use and mid-density residential redevelopment on the edge of downtown by revamping the C-1 zoning district to accommodate mixed-use infill and redevelopment.
- Completed the Downtown Streetscape Design Guide to give downtown street design elements a consistent feel and make it a friendlier place.
Outside of downtown they updated the zoning code to allow for more housing options and redevelopment in a number of ways.
- They increased the allowable densities for multi-family residential districts and there is now no maximum density in the Central Business District, C-1, or C-2 zoning districts.
- They amended the C-1 Neighborhood mixed use district. The city’s commercial corridors on Wisconsin and Richmond have smaller lots that were difficult to be redeveloped into housing due to the parking requirements. Additionally, the commercial lot coverage requirements were geared toward greenfield sites. As a result, the city revamped them to allow increased lot coverage and reduced the parking requirements by 50%. They also eliminated the maximum density for multi-family housing and reduced the setback requirements.
- Allowed Accessory Dwelling Units in residential districts
- Allowed for zero lot line dwellings which they hoped would spur townhome development.
The city continued to support the preservation of existing housing stock through the City Housing Rehab Program which was a loan program that helped homeowners with things like roofing and windows.
The city had also allocated $3million of American Rescue Plan Act funds to affordable housing projects in the downtown area. It also allocated some Community Development Block Grant funds to agencies that rehab homes and create affordable housing.
Overall, in looking at industry recommendations from the League of Municipalities, the city was already engaging in best practices regarding how to increase the construction of affordable housing.
The committee members had a number of questions.
Alderperson Nate Wolff (District 12) asked if housing such as townhomes, triplexes, and accessory dwelling units could be built on older developed or if they had to be constructed on green space.
Director Homan said that existing buildings could be retrofitted, but they would have to meet building codes and conform with the zoning requirements. Those types of housing could also be built on greenfield sites.
Alderperson Wolff and Alderperson Maiyoua Thao (District 7) both asked rehab programs for run-down apartment complexes. Director Homan said that if there was a complaint and potential violation regarding the building code or the health code, the Inspections Department or Health Department would follow up, but the city did not have a program to proactively provide funds to renovate a multi-family dwelling.
Alderperson Kristin Alfheim (District 11) mentioned that she saw many areas that would make beautiful settings for townhomes but they all seemed to just have standalone houses put into them.
Principal Planer Jessica Titel said that the city would love to see townhome developments, but noted that the cost of construction right now was challenging. She mentioned that Rise Apartments was creating some eight townhome units in the downtown area.
Alderperson Alfheim also asked if there had been any traction on accessory dwelling units yet. Principal Planner Titel said there had been interest but she didn’t know if they had issued any permits yet. It was a different product and some of the lots were small, so they were working through some of the challenges. [The February Board of Zoning Appeals meeting highlighted some of the issues that have been coming up with people wanting to build ADUs.]
Alderperson Thao asked about the process to apply for the homeowner rehab loan program. David Kress, the Deputy Director of the Community and Economic Development Department said there are two application periods, one in the spring, one in the fall. Typically, they get about 15-20 applications. They do their best to promote the program and work closely with the city communication staff to get it on social media and to do outreach to neighborhood groups so they are aware that the program exists.
Alderperson Wolff asked if Airbnbs were hurting the city’s housing goals by taking properties that would otherwise be used as houses and turning them into hotels.
Director Homan thought it was likely that Airbnbs were impacting the housing stock but noted that state statute prohibited municipalities from regulating them beyond what the Health Department was allowed to do via health and safety codes.
Alderperson Alfheim said she loved Airbnbs but she also had some concerns. She wondered if it would be possible to pull the number of licenses for Airbnbs and compare it to the number of houses that the city was short by. If they only made up 5% of the needed housing then that might not be a big deal but if they were something like 18%, she would view that as a big deal. Director Homan thought they would be able to do that.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1080166&GUID=870AADAB-FA01-4F71-BE05-413CA5499136
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