In Shorewood, we are foremost a residential community, and we have a larger than average stock of rental units.

Yet  the Village Board  seems to put an inordinate amount of emphasis on the business community while putting residential and housing concerns on the back burner. 

The Village Board also seems easily attracted to glamorous big dollar projects like the New Streetscaping and questionable Marketing Schemes   --- the present Village Board Members is so enamored of Big Dollar Projects, that they couldn't help but get involved in a project that belongs to the School District, and ended up giving away almost ½ Million $$ for D2D.

The problems that Shorewood currently face, however,  are of a much more mundane nature, such as a decreasing student population for its schools, and a housing inventory that in many cases has reached obsolescence in design and operating systems.

Most notably is the plethora of duplexes in Shorewood, that are in urgent need of updating to meet the requirements of today's families.

Contemporary families with students, the target demographic for our school system,  will not settle for Two Bedroom Duplexes, with antiquated plumbing, electric and heating  --- which we have way too many of in Shorewood.

Ironically, rather than address ways in which these duplexes can be re-vitalized,  the Shorewood Board is seems more inclined to just make the duplexes go away !

The current plan the Board is considering  is to float "sweet deal" loans to duplex owners to convert them to single family houses.

As I stated in my earlier postings, I believe the conversion of duplexes to single family houses would be counterproductive to attracting the young families with children that we desperately need --- and would make Shorewood even more unaffordable for housing.

Rather than try to solve the problem by destroying it --- I believe that Shorewood can take positive steps to update and rejuvenate the duplexes, and revitalize its population base with more families that include school age children.

INFRASTRUCTURE:

Shorewood should make TIF funds available to property owners (both single family and duplex) to improve plumbing systems to copper (rather than the old galvanized pipes that are spring leaks) - update electrical to newer wiring, circuit breakers versus fuses, and minimum 200 amp service per housing unit. 

ENERGY EFFICIENCY

TIF funds should be used to upgrade insulation and replace old in-efficient furnaces and boilers with new efficient models in both single family and duplex.

In regards to duplexes and multi family properties,  owners can be encouraged to  convert to efficient energy systems by mandating  that all rentals must include hot water, heat and air conditioning in the cost of the rent.

BULDING CODES AND ZONING

In designated areas, where appropriate and needed, set backs, lot line and  foot print requirement ratios, etc., should be amended to allow the adding square footage to existing duplexes, for more bedrooms, family rooms, etc. 

Amendments would also be necessary to allow the building of more garages, which may not meet the lot line and setback requirements now, to help alleviate the parking situation.  Car ports should also become a viable option.

In some cases, backyards may be all but totally eliminated, but this would not be inconsistent with high density housing that is already inherent in Shorewood. 

Loss of backyard space can be offset with additional planned green spaces, interspersed in the designated areas.  The loss of a few housing units for the green spaces, will be more than offset by the increased usable square footage gained in the enlarged duplexes.

 RENTAL AUTHORITY

The village should provide resources for both landlords and tenants, to meet the requirements mandated by housing law, and dispute resolution.  The Village could also operate a clearing house for landlords to list their available units and made available to perspective tenants. 

MORE

I am sure there is a lot more that can be done to improve Shorewood's  housing stock and attract more families to the Village.  Please share YOUR ideas in the Comments Section below !

In researching WHO can afford to buy a house or duplex in Shorewood, the best breakdown of the various criteria that may be relevant in the planning of any type of incentive program I found was at:

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

and all the information contained in this posting (parts taken directly in italics) is from that web publication.

I think it would be fair to say that Shorewood schools and their economic viability  are (and have)  been a major concern to the residents of Shorewood, and are always listed as a concern in relationship to the various tax/building/planning incentives, conceived by the Village Board and its appendage bodies. 

The major concern with Shorewood schools and their continued independent existence is directly affected by the number of students enrolled. 

And the number of students enrolled in  Shorewood's schools, is directly affected by the population mix --- and by the percentage of that population mix that is within the normal child bearing years --- and which has the financial resources to buy property in Shorewood.

In my previous posting, I pointed out that a minimum household income of $79,000 was needed to come into Shorewood, at the lowest entry level cost of buying, which is a median priced  duplex --- living in one unit while renting out the other unit to subsidize the costs.

In order to afford the median cost single family house in Shorewood, a household income of $110,000 is necessary.

Per the "Age of Householder" information below (assembled from the U.S. Census Numbers by the web publication listed above) - the highest median household income age group is between the ages of 45 and 54 --- well past the biological clock for giving birth, and assuming a prime childbirth age of 30 years (my assumption), the children in these households would range from 15 to 24 years of age. 

The age group between 35 and 44, which would be a good prime age group for the likelihood of having school age children (my assumption), has a median income of $56,785 --- which is also well below our threshold of $79,000 noted above for base entry level buying in Shorewood. 

As the median income means that half are above that number, and half below that number --- not even ½ of the age group between 35 and 44 can find affordable housing in Shorewood as the lowest entry level buyers.

Age of householder

Household income in the United States varies substantially with the age of the person who heads the household. Overall the median household income increased with the age of householder until retirement age when household income started to decline.^[24] The highest median household income was found among households headed by working baby-boomers.^[24] Households headed by persons between the ages of 45 and 54 had a median household income of $61,111 and a mean household income of $77,634. The median income per member of household for this particular group was $27,924. The highest median income per member of household was among those between the ages of 54 and 64 with $30,544. The group with the second highest median household income, were households headed by persons between the ages 35 and 44 with a median income of $56,785, followed by those in the age group between 55 and 64 with $50,400. Not surprisingly the lowest income group was compromised of those household headed by individuals younger than 24, followed by those headed by persons over the age of 75. Overall households headed by persons above the age of seventy-five had a median household income of $20,467 with the median household income per member of household being $18,645. These figures support the general assumption that median household income as well as the median income per member of household peaked among those households headed by middle aged persons, increasing with the age of the householder and the size of the household until the householder reaches the age of 64. With retirement income replacing salaries and the size of the household declining, the median household income decreases as well.^[24]

Population Diversity by Race

In the same web publication, the chances for diverse homeownership in Shorewood is even less likely, with Black households having a median income of a little less than $30,000 per year, and Hispanic household being just a little over $30,000.

In conclusion --- if Shorewood truly wants to be a Diverse Community --- as measured by Income and Race --- we need to concentrate our Residential Incentive Programs to provide Affordable Housing for those groups !

In future posts, I will propose some ways that I think will help in achieving those objectives --- and I hope that readers will offer their suggestions also.

 

In my previous posting, I noted that the new Loan Program the Village Board is considering, would encourage the transition of duplexes to become single family homes. 

In this posting, I will attempt to  illustrate the housing availability and affordability factors in Shorewood - and the differences in affordability between duplexes, single family homes, and the impact on renters.

In doing research on the current housing that is listed for sale in Shorewood on the MLS  (of which I am a member), I found the following.

There are currently 28 single family homes for sale in Shorewood.  The least expensive is $219,000 and the highest is $1,495,000.  The median price is right at $400,000.

There are currently 11 duplexes for sale in Shorewood.  The least expensive is $280,000 and the highest is $675,000.  The median price is $319,000.

Of course, an integral factor in Shorewood housing is the cost of rents, so I  researched Craigslist  for 2 and 3 bedroom duplexes (not apartments) advertised for rent over the last month. 

There were 15 advertised, almost all in the $900 range ($950 is about average).

Now what do all these numbers mean for someone who would like to live in Shorewood - what is our "affordability factor" ? 

Affordability as quantified in a percentage of income is debated constantly, and varies somewhat depending upon the type of housing, the income strata of the household, and whether it is being used for subsidized housing programs, or loan qualifying by banks, etc. 

A good benchmark for our purpose here would be to use the FHA Income to Debt Income Ratio of 29% (round to 30) --- this means that a household with a monthly income of $4000 should be spending no more than $1200 on housing costs ( combined principle, interest, taxes, insurance or rent) but not including utilities.

For duplex renters we can calculate how much income a household would need, based upon the average monthly rental cost of $950.  

By using the inverse of 30% of the Debt Income Ratio (divide 950 by .30) , a household  would need an   income of $3200 per month to affordably rent a duplex in Shorewood.  That is a yearly income of $38,400.

For someone who wants to buy in Shorewood, we have to determine how much their payment would be per month working backwards on the cost of the house (just as we worked backwards from the rental cost above). 

To simplify our model,  I will assume in all buyer scenarios,  that the buyers have a down payment of 20% (gift from parents ?) and that their interest rate will be a fixed rate of 6.5% on their mortgage note, amortized over 30 years.

Our Median Priced Single Family Home noted above,  at $400,000 would then have a mortgage of $320,000. 

The mortgage payment would be $2023 per month, the taxes on the existing Shorewood house at that price are $679 per month, we'll ballpark  $50 per month for insurance, so their total monthly housing cost for ratio purposes would be $2752.00.

Using the inverse of 30% again, this household would need a monthly income of  $9175 --- or a yearly income of $110,000. 

But let's say that our folks who want to live in Shorewood, and want to buy a place, don't have that kind of income for a single family house.  Here is how they would do with a duplex:

Median Priced Duplex noted above is $319,000. 

Assuming again there is a 20% downpayment, the mortgage note would be for $255,200 and the mortgage payment would be $1613 per month.   The taxes on the existing Shorewood duplex at that price are $560 per month, using $75 per month for insurance, their total monthly housing cost for ratio purposes would be $2248.

Using the same inverse of 30% as we did above for our buyer of the single family house, the duplex buyer would need an income of $7495 --- or a yearly income of about $90,000. 

But there is a big difference - because this is a duplex, the buyer  benefits from the rental income on the unit they do not live in. 

Using our $950 per month number, that is an extra $11,400 in income, bringing their qualifying ratio number down to the $79,000 range.

Buying a duplex instead of a single family house ---  makes Shorewood affordable for a household making $31,000 less than our single family buyers !

In my next posting --- I will illustrate the different demographics involved, based upon household income --- and how that affects who can afford to live in Shorewood.

(note that in the above examples I rounded numbers to make working with them easier, and simplified some of the actual workings of mortgages and buying, and did not include expenses as maintenance, upkeep, depreciation etc.)

 

 

According to stories in the Current Issue of  ShorewoodNow (http://www.shorewoodnow.com/) , the Shorewood Village Board is contemplating a new loan program targeting residential housing. 

As reported by Dave Fidlin -- staff writer :

" outlined in a draft document, the village would disburse as much as $360,000 in loans to nearly 40 home owners if the program is enacted. Applicants must own and live in the homes to qualify for improvement loans.

Loans would be offered in one of four categories: down payment assistance for a single family or duplex, a loan for converting a duplex to a home, attic improvements and exterior maintenance.

Trustee Margaret Hickey said at a board meeting this month that a good target population for the loans would be elderly residents on fixed incomes who sometimes find it difficult to obtain bank loans.

"It's going to be a pilot program," Trustee Dawn Anderson said. "We're going to have to have some faith that the eligibility requirements will work."  "

The Loan Program as described above, in my opinion, is seriously flawed, and will result in the loss of a lot of affordable housing in Shorewood, and will adversely affect the enrollment in the Shorewood Schools.

There is no question that Shorewood needs to work on improving its housing.  When I ran for the Village Board in the last election, I made this issue a prominent point in my campaign.  I especially decried that the Village Board was focusing on the "business environment" in Shorewood --- including a Business Loan Program that would provide up to $50,000 in unsecured loans to businesses....

Unfortunately, at the time, my opponents Phinney and Eckman, and other Village Board members such as Anderson and Hickey did not agree, preferring to concentrate on ineffective business programs, and large grandiose expenditures, such as the multi million dollar Streetscaping.

An obviously logical question  would be, if I was proposing housing improvement programs just a few months ago,  why am I criticizing the program that is now being floated out for consideration ?

The program that I proposed would "enhance" the existing housing stock, making it more efficient, up to date, and  appealing for both buyers and renters. 

But I did not propose that we change the character or nature of the housing that currently exists.  Encouraging the transformation of existing duplexes to single family homes, will drastically reduce the population of Shorewood, and make Shorewood more un-affordable for young families - especially the kind that have school age children.

The program I proposed concentrated upon the infrastructure of the existing housing, which is rapidly becoming obsolescent - with outdated electrical, plumbing and heating. 

The program being touted now by the Village Board, concentrates on cosmetics and attics --- not the features, in my experience as a Realtor, that are of the greatest concern of school age families.

Encouraging the transformation of duplexes (which Shorewood has more of per capita than any other community in Wisconsin) into single family homes, will price most families with school age children out of the market !

Over the next week or so, I will be making postings that examine the affordability of housing in Shorewood , and the differences in costs and demographics in relation to renters and buyers of single family homes and duplexes.

 

I was happy to see Joe turn his attention to the RESIDENTIAL needs of Shorewood, which I feel have been slighted by the Village Board in favor of Hi-Visibility initiatives, such as the Multi Million Dollar $treetscaping Plan, and Dog and Pony Shows by the BID, which do little or nothing to promote business or residents.

The following is an excerpt from my March 1, 2007 blog, with some "starter" ideas for promoting the RESIDENTIAL needs of Shorewood.

In Shorewood we have a great place to live - we have one of the best school systems anywhere, and our Residential - Urban - Sidewalk - atmosphere is almost "Norman Rockwell" in its flavor.

Our underlying strength is not the businesses that are in the Village. Shorewood is not a shopping destination in itself. We have some destination shops here, such as Goldi's, Harley's and CC Conrad, but for the most part, businesses which locate in Shorewood are here to serve the people of Shorewood. Shops and businesses that fill the need of our population, with a convenience of being close to home.

It is no secret that our population is lower now than at our peak, and that our schools have excess capacity to serve more students. And there are steps we can take to help make Shorewood even stronger and more desirable.

We are foremost a residential community, and we have a larger than average stock of rental units. If we are to use TIF money to strengthen Shorewood, it should be used to help property owners to improve the housing stock --- ie. energy efficient furnaces, newer copper plumbing and updated electrical. We can promote energy systems that are affordable for the landlord to include heat in the rent.

We can develop programs to encourage owner occupied duplexes. And we can develop programs that work with both landlords and tenants, to make Shorewood the number one rental option in the Milwaukee Metro area.

As Shorewood has grown more mature, there is also a greater need for housing that serves the needs of our senior citizens who would like to stay in Shorewood, but don't necessarily want the responsibility of a large property to maintain. As I can attest to, after both a hip and a knee replacement, a two story house with a basement, is not very user friendly to those with older joints !

(And by the way --- as a residential, sidewalk friendly community --- we need to resume show removal !)

Our focus in building a stronger Shorewood should be on our housing, and filling the needs of all the different segments of our community, higher and lower income, younger families with school children and seniors with mobility needs.

I would like to extend my sincerest thanks to the 596 citizens who cast their vote for me for Village Trustee.

I hope that my campaign for Trustee raised awareness in the Village about some very important issues; IE. New Sreetscaping Program without a Post Mortem as to why the last Sreetscaping was such a Disaster, Bid District Expenditures, Unsecured Loans to Businesses, Consideration for the Needs of our Senior Population, Ecology Consciousness and Awareness in Government Actions, and the Overall Emphasis on Shorewood Business (hi visibility sizzle) with a Decided Lack of Attention to our Residential Infrastructure (low visibility steak).

As the voter turn out for this election was quite low, I do not think it reflects a mandate for the status quo, and I have to wonder if I could have / should have, done more to get the message out.

These issues and others I believe, are very important, and suffer the lack of attention they deserve, by a Village Board that values consensus and status quo, more than introspection and questions. Hopefully, through continued publication of this blog, more deserving questions will ultimately be addressed.