Citizen Wausau

[I know this appeared on Johns blog, but the work is impressive, and I think it is worthy of a larger discussion.]

Let me start off by saying that I don’t know everything and I don’t understand everything.  I start out with that statement because something just doesn’t add up for me — it doesn’t make sense to me.  Although I admit I don’t know everything there is to know about various sources of development incentives from the local, state and even federal level; to be fair, I am not completely without knowledge either.

At Tuesday’s City of Wausau Plan Commission meeting, after a public hearing, a zoning change was approved for a 40-unit apartment complex near downtown. It would be located where the Zastrow Beer Distribution facility is, on the river just south of Bridge Street.  This zoning hearing is not the first step in the process for this development.  Although the meeting last night was to get the zoning situated, about a year ago the City of Wausau approved a Developer’s Agreement for this project where the City of Wausau (through various sources, including funds allocated toward development of low-income housing) was going to provide a total of $450,000 towards this development.

Before I start my rant about how this project appears to be an outright abuse of those systems in place to help with our “affordable” housing crisis, it is important that I make a few of my personal thoughts clear.

I do not oppose a development of this nature in this location.  This property is currently zoned manufacturing, which made sense back when we floated logs down the river. However, today a mixed use of commercial and high-density housing along the river front makes sense from an urban planning perspective.   I also, in concept, don’t have a problem with the Community Development Authority (CDA) using money they have available to eliminate blight.  However, I would hope that because this is a limited resource, they would be selective in its use to get the best bang for the buck.

I have said for a while that our rental housing market for “market-based” rentals is saturated.  And, reports done not that long ago by the Wausau Daily Herald and City Pages both verified the amount of overbuilding that has happened, and what this overbuilding has done not only to the supply, but also the quality of housing available.  However, the market is, though, in my opinion, overbuilt.  I cannot and will not object to a private developer proposing a multi-family development in an location that is consistent with that type of use and the developer is taking this gamble with their own money.  After all, I am a free-market kind of guy.

Personally, I think we need to take a much closer look at what our government (city and state in this case) is doing when a developer realizes that the only way to make a development profitable in a saturated market is to have the government defer their risk with grants, tax credits, and other incentives.

I did testify at the public hearing.  However, my testimony was neither truly in favor or against.  Instead, I was providing information.  The hearing was only on the zoning aspect of this project, and as I already stated here, this is a good use of that land from an urban planning perspective.  Although the hearing was on the zoning, I did try to address the funding issue without being completely out-of-order.  I pointed out two facts:  The market for “market-rate” multi-family is beyond saturated; and there is a severe shortage of income-based housing (often called subsidized housing, or often labeled “affordable” housing).

We have a crisis when it comes to housing for those with very low incomes.  Most of our subsidized housing developments have waiting lists. The waiting list to get on the Section 8 Housing Voucher program has gotten so long with so few people coming off of it, that the Housing Authority isn’t even taking new applications any more.   When I testified, I wanted to know how many of the 40 units were targeted to help with this urgent need.  I wanted to know how many families this $450,000 would help, what were we spending per family?  You can imagine my shock when the final answer to the question as I phrased it was:  ZERO.  I was told these are “tax credit” units, which differs from those type of units where the rent paid by a tenant is a percentage of their income.  In exchange for these “tax credits” (issued by WHEDA), they have to keep the rents at a level that is affordable to “low and moderate income” individuals.

To give you an idea how much help $450,000 could do if targeted differently:  The average amount that I get as the Housing Authority portion of the rent payment for my tenants that are on Section 8 is about $260 per month (let’s round that up to $300). That means that someone who just needs a safe roof over their head costs the Section 8 program about $3,600 per year (let’s call it $4,000). At $4,000 per year per family, over 50 families (10% of those on the waiting list) could get safe housing for over 2 years!

(That is based off of the payments I receive, can any one from the Housing Authority correct my numbers as to what the average cost per household is, if my $4,000 per year number is off?)

We must remember that certain types of City funds can only be used certain ways.  You can’t just take this $450,000 and use it to fund the voucher program.  That is a federal government issue (although WHEDA does provide funding for some of the vouchers our Housing Authority provides).  If, instead of cash for clunkers or new home buyers credits, the federal government would put some funding in the Section 8 program, we could solve the problem of this huge waiting list of families that need help AND solve the problem of record vacancy levels in market rate units AT THE SAME TIME.  However, the federal government has no time for solutions that make sense, and this post is not about the federal government use of money to solve problems.

It was said at the hearing this is a $6.9 million multifamily development (however the Daily Herald reported it at $7.2 million).   That comes out to well over $170,000 per unit. Based on my experience, a good rule of thumb when calculating the financial feasibility of multi-family projects is $100 per month in rent = $10,000 of value.  That is a rough guideline.  An example of how to use it would be if the market says you can get $600 per month in rent, you are looking at about $60,000 per unit.  If you are relatively close, for example $80,000, the project may still cash flow, just the risk increases as you need to sharpen your pencil.  However, but if the market dictates $600 per month and the costs are going to be $120,000 per unit, there is no way to make that thing profitable.  On this project, we are looking at units that run from $600 to $750 per month with a cost of  over $170,000 per unit.  You do the math.

One way to make this work is to cut your costs, bringing down the per unit cost.  Another way is to not spend less money, but instead someone else’s.  One way to do this is to get WHEDA tax credits designed for low income housing.  Another place to ask for money is to ask the City of Wausau to throw money at the project. If I remember correctly from information that came out when the developers agreement was being discussed, they are cutting operating costs also, specifically property taxes.  It is my understanding this nearly $7 million project is not going to be taxed on $7 million of value.

The person at the hearing representing the developer said at the hearing that as a condition of getting these WHEDA tax credits, they have to keep the rents “low and affordable” for low and moderate income individuals and families.  Really?  $600 for a one-bedroom?  That is not housing for low income individuals.  That is “market rate.”  Actually, if you look around, that is a little higher that what the market charges for one-bedroom units.

As a matter of fact, only a few of these units will even take those people who do manage to get off the waiting list and get Section 8 vouchers (though I don’t know of too many landlords in town who would turn down a Section 8 tenant, so there is no need for units that take Section 8, the need is for Section 8).

Based on the information handed out last night, of the ten one-bedroom units, only two will be at rates that are eligible for Section 8. Late last year, I had been told by Mary Fisher of the housing authority (no relation) that the highest need is for two-bedroom units. Of the 19 two-bedroom units in this project, only two are priced within Section 8’s guidelines. The other two-bedroom units rent from $650 to $775.  (The highest priced two-bedroom unit Section 8 will allow is $631).

The information provided at the public hearing that specifically addressed how this housing will cater to our need to provide safe housing for low income individuals and whether the CDA’s contribution to this project actually created more questions for me than answers.  I feel one of the reasons the developer’s agreement passed was that I was not the only one who thought this development would help with our low income housing needs.  The biggest question I have, was there a deadline in the developer’s agreement?  Now that we know this project won’t help with low income individuals, can that agreement be re-negotiated?

We have a need for housing that is affordable to our low-income families (the market provides plenty of housing for moderate income families).  We have programs available through the City of Wausau and through WHEDA to help solve those needs.  This project, in my opinion, does nothing to help with our low-income housing problem and that money would best be, not put toward this project,but instead focused more on things that will actually solve the problem.

I close this post as I started, reminding you that I do not know everything, and maybe there is something going on here, something important, that I am missing.  If that is the case, I need for someone to explain to me what I am understanding incorrectly.  Please educate me – educate us. Because if I am understanding the situation correctly, a great disservice is being done, not only by the City of Wausau, but also by WHEDA.

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Not long ago, Dino had a post here about a small victory for local skateboarders when a proposal to further limit skateboarding in the downtown was killed in committee by the committee’s chair. Last week I had the opportunity to attend a meeting where many of the participants saw this not as a small victory, but as a significant loss. And in the interest of fair and balanced reporting, I thought it prudent to look at the issue from their point of view.

The meeting was the Public Safety Meeting of Wausau Main Street. Being a property owner/manager in the “Main Street” area, I have made an effort to be at least marginally active.

The Main Street program, which represents downtown Wausau on both sides of the river (yes, downtown extends to the West Side), has a very good working relationship with the Wausau Police Department. One of the Wausau PD officers who I personally think really does a good job, Officer Max LaPorte, is the liaison between the PD and the downtown business owners.

Based on the Public Safety meeting that I attended, it was through these meetings that a proposal to further curb (pun intended) skateboarding in the downtown came about. The reason being the elements that skateboarders brought to downtown. The element is described as loitering juveniles who are rude, use profanity, litter and therefore discourage paying customers from visiting downtown businesses. In addition, in practicing their “street skills,” they cause damage to curbs, railings, planters, benches, etc. The damage to the downtown benches actually warranted a discussion that maybe the benches shouldn’t even be put downtown until the three summer CSOs (Community Service Officers) were on patrol in the downtown.

As I did with the pool issue, it is probably only fair that I make my position clear, as I don’t want people to assume that I come in with no bias whatsoever. I will admit that I have witnessed juveniles in groups “hanging out” and it can, at times, be intimidating. Also, the property that I own on the West Side has low rails protecting the sidewalk from the parking lot (or vice versa) and the painting and maintenance of these rails was a 2-3 time a year project because of damage caused by skateboarders. (I was going to have stops welded every foot or so, but was informed this may lead to potential liability issues – so instead I just chose to stop keeping the rails nice and painted.)

In essence, I fully agree that the act of skateboarding has little use on the downtown sidewalks and pedestrian areas. There is no need to do tricks on public or private property. I do see the validity of skateboarding as a form of transportation, but once you get on the crowded sidewalks of downtown, at some point public safety has to come into play.

Note, that I said that skateboard-ING has little use, and did not comment on skateboard-ERS. There is a difference. Let’s face it, I can sympathize with skateboarders, as I am a landlord. And that minority of people who do this job and do it badly gives all of us a bad name. Therefore, I can understand how a minority of rude skateboarders can give all of them a bad name. However, the more I hear, and the more that I see – first hand – I have to ask myself, are the bad apples truly a minority? Even in the comments from that article here on Citizen Wausau, one skateboarder (I assume) pointed out that running from the police was all a part of the skateboarding experience.

There was a comment at the meeting last week that from year to year, it is never the same group of kids. The age of the kids stays about the same, so each year it is a new batch. That leads me to ask the question, is it because the old batch now knows the rules and respects them and the new batch simply doesn’t know? I asked about maybe communicating with those active in the sport (like Dwellers) about educating boarders about what the downtown regulations are. The response that I got from members of the group was that because Dwellers wasn’t really supportive of the current ordinance, they would not do anything to help educate people on its specifics.

Although I naturally lean more on the side of the business owners, being one myself, I do think that there has to be a happy medium. I pride myself in being a big-picture kind of guy. One of the big problems that downtown Wausau has to deal with is getting people to come downtown, to check out what the downtown has to offer. The fundamental problem with the current skateboarding policies is that many of the people that you are trying to get to come downtown are the SAME PEOPLE who you went out of your way to chase out of downtown 5, 10 or 15 years ago. “Oh sure, NOW you want us back, yeah right!”

There has to be some type of happy middle ground. There has to be some type of way where the younger generation can spend time downtown not being chased out or shown they are so obviously not welcome. At the same time, there has to be a way for the younger generation, while they are downtown, to not cause damage to public or private property or act in a manner that is detrimental to others. There has to be some type of way where each side can see the point of view of the other side and find a way to co-exist.

Because although there is a problem with some younger people being rude and littering and making life hell for local businesses, at the same time if you chase people away from downtown when they are young, it is unrealistic to expect them to return when they have matured into adult consumers.

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The City of Wausau is a small town. Like a small car, the City of Wausau can be a nimble thing, darting through changes, looking forward, wind in its hair.  But like a badly maintained small car, the city of Wausau can be an underpowered, unresponsive car without any room for friends or family or even the dog. I think that this is a challenging time, a time with opportunity, and a time where we have the resources to make our City the best small car we can make it.

As the Fourth of July just passed, I am left with the reality that we built this country not with committees or procedures, but literally with shovels and hoes, and our hands got dirty. We came here (and yes, we stole the country from its previous tenants) and created government out of an idea, out of an abstraction. Blood in the streets, brothers killing brothers, and law was the beginning.

Today we have a much different world. Some might say a more stagnant world, one that sits on its laurels and rests in hopes of resting at a later time — a slower, less dynamic, less responsive, less brave world. A world often led by its fear.

We in Wausau have a chance to change some of that. We have a chance, we have the resources, and we have the wherewithal to do it.

Jim Rosenberg is a member of our City Council and a member of the County Board. He has been there since before the Civil War, I think, and was a founding father of this city. Just kidding, but he has, in fact, been a civic leader for a long time. In case anyone was wondering, Jim works at WPS. The electric company. A big electric company. Jim is a leader both in the city and in the big electric company.

Let us think about that for a second shall we? A man in a leadership position in the City is also sitting in a position to know all the players in the energy business. When I wanted to explore solar power, Jim was a tremendous asset, telling me who was reputable and who was not.

How can this apply to our city? HOW DOES IT NOT? Mr. Rosenberg has access and contact with people who are experts in both electricity and alternative energy, just through his daily reading for his job. How can these people help us in Wausau? How can they not?

We have a Commission for a Greener Tomorrow. I have read every agenda and every set of minutes they have put forth. We have a mayor who has a chance to lead us into a sustainable working model for our city. And we have Rosenberg.

We have a chance to exploit the professional knowledge and contacts of this Rosenberg character to the fullest extent. If the City of Wausau is really serious about making a commitment to being green or sustainable, it has someone on its council who can and should be called upon to lead the way.

Sadly though, like a sluggish small car, we are underpowered and under committed. A statement from our Mayor at the beginning, a unanimous vote to name an ad hoc committee. That is it, and it is sad.

New York City has an entire department devoted to Sustainability. New York is like a Sherman Tank compared to a small car. A small car can move faster, change direction quicker, and I hope we do. A green Wausau could contain solar and wind power, more community gardens, hybrid fleet vehicles, and greener building standards. In part two of this series, I’ll describe many specific, tangible ideas that we can invest in and implement.

We live in a challenging time, a time of vast change and significant social upheaval. Small towns, medium cities, all have a chance to lead. To be innovative, to be responsive, to be the best small car we can be.

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