Think about this the next time you hear someone having difficulty finding affordable housing in Sawyer County . . . at any given time over half the county homes are vacant, not occupied.
So why is it so difficult to find affordable housing when so many houses are unoccupied?
The answer lies in seasonality. Roughly 52 percent of Sawyer County homes are seasonal, meaning the owner either uses the dwelling just part of the year or it is rented for periods of less than 30 days, making the home either unavailable or too expensive for long-term renting.
The number of vacant homes is just one of many pieces of information unearthed in the recently completed “Sawyer County Housing Study 2018.” The Sawyer County/Lac Courte Oreilles Economic Development Corporation (SC/LCOEDC) commissioned Ann Kozak (now the part-time executive director), to do an extensive housing study to quantify what previously had been a collection of anecdotal stories of complaints by businesses that they are unable to hire workers because candidates couldn’t find an apartment, or other diverse bits of data, such as the numbers on a waiting list for low-income housing offered by Sawyer County Housing Authority.
Kozak spent three months researching the county’s demographics and household trends, available housing units, occupancy states, income and employee data, home sales and more. In December, Kozak presented an information-rich 38-page study with recommendations.
One “eye-opening” revelation for Kozak was how many county homes are vacant most of the year, a paradox when so many are complaining about the lack of affordable housing.
“We have all this housing but it’s empty most of the time,” she said. “Yet, we have a housing shortage.”
Sheila Young, executive director of Sawyer County Housing Authority, which helped pay for the study, said she was also “shocked” by the number of seasonal homes that are vacant most of the year. Of the county’s 16,193 housing units, 7.488 are occupied with 5,525 occupied by owners and the remaining 1,963 rented.
That leaves 8,705 vacant housing units with 7,845 of them seasonal, another 265 for sale and 104 for rent.
But there’s another 491 vacant homes that are neither seasonal, for sale or for rent. Kozak believes these homes are largely owned by seniors who are not living at home but are residing with children or living in apartments/condominiums, assisted living or nursing homes.
“They haven’t given up their homes,” she said, “so the house is still there, but they don’t want to sell it yet.”
Ty Wiley, an SC/LCOEDC board member and broker/associate with Area North Realty of Hayward, said some of those vacant, not seasonal homes could also be a lake cottage or hunting camp owned by a county resident who essentially uses the property seasonally even if the home isn’t considered seasonal.
Some of these 491 homes could also be unavailable due to remodeling and or, in some cases, unavailable because former occupants used methamphetamine and require expensive abatement.
Kozak believes the pool of vacant, livable non-seasonal homes could present a solution for the lack of affordable housing if a significant percentage could become available for sale or long-term rent. However, she didn’t specifically address this pool of vacant houses in her recommendations.
Trends, needs, rentals
Based on demographic trends, the study says 529 additional households will be added to the county by 2020 and another 817 by 2030 (1,346 more than in 2018).
Kozak estimates the need for an additional 537 rental units and 809 owner-occupied housing units. Of the 1,346 additional households, 571 will be those 65 years or older as the county continues to gray.
Looking at 2000, 2010 and 2012-16 census data for the county reveals a slow trend of more residents renting, rising from 22.9 percent in 2000 to 26.2 percent in 2012-16 and projected to reach 29.3 percent in 2030.
One factor driving the increase in rentals, Kozak said, are seniors leaving their homes and opting for the lower maintenance of apartment/condominium living.
“Projections estimate the percentage of renter-occupied households will continue to increase as population ages and seniors move from owner-occupied housing units to rental units,” Kozak wrote.
Wiley said he has witnessed more seniors moving away from single-family homes by the lake to condominium living in a single-story home such as the Stonewood subdivision outside of Hayward.
Another factor increasing rentals are all the post- secondary graduates with large student debts who cannot afford to buy. Wiley, a millennial himself, said many millennials just don’t want to be bogged down with a mortgage and prefer renting.
Wiley, Kozak and Young say the study and their experience reveals a need for more affordable rentals.
“Every week we receive calls asking about rentals,” said Wiley.
As Kozak was doing her research she heard from several employers who said the lack of affordable housing, especially affordable rentals, hampered their ability to hire new workers.
“We definitely need workforce housing,” she said.
During her research, Kozak learned a person from Phillips hired by the hospital quit after a month because of the inability to secure local affordable housing.
She learned that the Winter School District hired four teachers last fall and one of the new teacher’s only options for housing was to rent a room from a retired teacher.
“Even Winter has issues with lack of housing,” she said. “I didn’t expect that. I thought it was more of an issue of the northern part of the county.”
Areas of the county that have zero percent rental vacancy include most of the Town of Lenroot and southeastern corner of the county in the Town of Winter, along with the towns of Draper, Meadowbrook, Meteor, Ojibwa, Round Lake and Weirgor and the Village of Couderay.
However, other areas of the county appear to have sufficient rentals with vacancies over 10 percent: these include the towns of Edgewater, Radisson and Spider Lake and the villages of Radisson and Winter.
Kozak believes the highest rental vacancies are those areas of the county with the least availability to broadband, making those areas less desirable for renters.
The most available rental units in the county are in the city (565) and town (413) of Hayward and Town of Bass Lake (309), but there is 1% vacancy in Bass Lake and city and town are under 5 percent.
For renters, the best situation is 5 percent vacancy, Kozak said, so there are some options.
For Sawyer County, the study reports the “estimated median household income for renter-occupied housing units is $24,453.”
Based on the “accepted standard” of 30 percent of income for housing, those median household renters should pay $611 a month, but the reality is the median gross rent in the county is $657 a month.
Hill ripple effect
The proposed Hill Construction project on the north side of Hayward to add eight apartment buildings with eight rental units per building (64 apartments in total) renting for over $900 per month, said Kozak, could have a positive ripple effect of attracting renters who move up to something better, leaving behind opportunities for others in the rentals left behind. She said Superior has seen this ripple impact with new apartment construction.
Young believes those 64 rental units will be occupied as they come available because there is a demand for higher-end rentals from professionals, especially hospital and school workers, and she also believes there will be a positive ripple effect.
Likewise, Wiley also believes there could be a ripple effect from the Hill project but only if those new apartment units are considerably better than what renters have now because for more rental dollars they are going to expect better living conditions.
Rehabbing vs. new construction
Those who can only afford $611 a month, Kozak said, are not going to be moving into those new Hill apartments. That’s why she recommends rehabbing existing housing or converting commercial space into housing.
Northwest Regional Planning Commission manages revolving loan funds that help landlords rehab rentals with low interest rates as well as helping income-qualified homeowners with zero-interest, zero pay back loans until the property is sold or the owner leaves the residency fulltime.
After a former Hayward school building on Fifth Street was demolished, there was a some sentiment expressed that the school should have been rehabbed as apartment rentals instead of being town down.
Young said her organization explored converting the former school into apartments but found the cost probative.
“We looked at the building several times, but there were issues, such as asbestos, that would have to be removed,” Young said. “What you would have to do to convert it, it wasn’t feasible.”
Young said her agency is looking at options for rehabbing housing, including tax credits and rural development programs.
Demolition, tiny houses, new construction
Kozak also recommends demolishing substandard housing to “enhance the appearance and appeal of the community and improve the safety of homeowners and renters.”
However, Young said, the reality is some renters’ only option is that substandard housing, so she would be slow to demolish until there is sufficient housing to replace it.
Not specifically stated in her recommendations, Kozak also encourages exploring tiny houses as option for affordable homes to purchase or rent. Tiny houses are small homes, often 500-square feet or less that sell for well under $100,000.
Young said the housing authority had been approached with an offer by a donor to create smaller housing options that were more affordable but the donor had to back off due to health complications and there was also the reality that it is difficult to create housing under $150,000 per unit when each home requires 1½ acres of land along with well and septic.
The study reveals a large need for new affordable housing either for sale or for rent, but Wiley said building a single story, three bedroom home for under $150,000 is nearly impossible without some form of government assistance. The same is true for a rental complex that would offer rent in the $611 a month range.
However, Kozak said, because much of the county is considered in the federally recognized Opportunity Zones, there is the opportunity for investors looking for tax breaks who might invest in such new housing developments.
The study also found few transitional housing options, especially for those coming out drug addiction treatment or jail who would benefit from a controlled environment for a period to transition to a stable living situation.
In Sawyer County, the three women’s shelters all have waiting lists: LCO’s Women’s Shelter, Elizabeth House and New Reflections Pathway to Hope, but there is nothing available for men.
Sufficient transitional housing, Kozak said, could have positive effects in helping people get established versus reversing back into social ills and compounding problems related to addiction and criminality.
There is so much information in the housing study to consider, but so far there has been no public dialogue with the study at the center.
“I think we need to explore possibilities,” Kozak said. “My goal was to have information for the stakeholders in the community to see what is the best fit for Sawyer County.”
Kozak would like a public meeting to discuss housing with the various stakeholders, including developers, contractors, landlords, government officials, elected officials and groups concerned about affordable housing
“We have opportunities to do something in 2019,” she said.