Last summer, Janesville officials began a public push to illuminate the need for more housing in the city.
Apartments, townhouses, condos, homes, low-income housing, high-end housing—we need it all, officials said.
Proposed apartment projects have tended to get the most attention. They are larger and can accommodate more people than a single-family home, whose construction can go unnoticed among the grand plans and glittering renderings of new apartment complexes.
But the spotlight has slowly turned back to single-family homes. In December, the city council overrode a city staff recommendation to not pay for subdivision infrastructure.
The city once allowed infrastructure subsidies but dropped the policy in 2016. It had lost too much money building water and sewer lines, street improvements and other services for subdivisions that were never built in the recession’s aftermath.
Under the old policy, the city financed infrastructure at the outset, and the developers or landowners promised to pay back the city through five-year payment plans, Planning Director Duane Cherek said.
Though staff prefer not to revive the practice, the council wants to consider restoring it to trigger more home construction.
The city might have few single-family homes available for purchase, but there’s no shortage of available land. Janesville has plenty of remnants in subdivisions that began before the recession, still empty years after the crash.
City residential building permit data show Janesville has slowly climbed out of its housing doldrums. The market bottomed out in 2011 with only 31 permits issued. It eventually rose to a post-recession peak of 94 permits in 2017 before slipping to 83 last year.
That’s trivial compared to the early 2000s building boom, when the city consistently issued permits for more than 200 new homes annually.
Cherek said there are fewer building companies these days, and those that still exist have reduced their size to remain solvent. A shortage of construction and skilled trades workers also has slowed the pace for some projects.
That’s led to fewer new homes being built at one time. It’s easier to manage smaller-scale development, he said.
The construction tempo might be more sluggish, but Cherek believes Janesville will continue to see strong demand for housing. It has a good school district, strong quality-of-life amenities, a fruitful job market and a prime location along Interstate 90/39.
“All of those same things that drove residential development in the past are still very much there,” he said. “And now we’re seeing a diversification in the community. Look at our downtown, with all the things going on there and improving what’s there.”
The land once prepared for homes as the pre-recession economy boomed, when General Motors still pumped out SUVs, still has plenty of space for recovery. The Gazette took a closer look at five city subdivisions at various stages of development to take the pulse of Janesville’s single-family housing market.
Arbor Ridge might be the pinnacle of Janesville’s single-family home market. Its northern and southern entrances are marked with stone signs emblazoned with the subdivision logo. A nature conservancy offers private hiking trails for residents.
Being at the top means a narrower slice of potential homebuyers. Konya Schuh, who works for landowner Hendricks Land Development and markets Arbor Ridge as a Realtor through Century 21, said the subdivision’s home prices range from $400,000 to more than $1 million.
Progress is slow. Of the 65 lots created before 2009 during phase one of development, 27 have sold. Not all of those have had construction, either. And there’s another 130 lots not yet ready for building, she said.
The infrastructure is in place for phase one lots. Work would probably begin on phase two in a couple years, Schuh said.
Because phase one lots are already connected to city services, Schuh said the city reinstating its infrastructure policy would have no immediate impact on Arbor Ridge. Without knowing how the policy would function, she declined to say whether it would help phase two.
Sales are starting to pick up, however, even without the policy. Arbor Ridge sold six lots last year.
Hendricks Land Development typically doesn’t handle home building. Schuh hoped their partners would consider speculative homes, but builders were still gun-shy to pour so much money into a house without a buyer.
“These executives moving to Rock County looking for housing—you’re moving to a new community, new job, getting kids entrenched in the community. Most people don’t want to build right off the get-go,” she said. “That’s why I feel it’d be so nice to have high-end spec homes up there that are move-in ready for people relocating into the area.”
City staff highlighted this west-side subdivision as a reason to keep the infrastructure policy abolished. Janesville installed infrastructure in the subdivision right before the housing market collapsed, and the landowners never paid taxes, Clerk-Treasurer Dave Godek said.
The city ended up losing more than $1 million on the deal, he said.
Driving through the subdivision reveals signs of a development stuck in time. Aside from a handful of brick and stone homes, there’s only a couple Century 21 signs. Multiple roads wait to be extended into cornfields.
The city did issue one building permit in 2017 and one in 2018 for Greenway Point. But the subdivision’s ownership structure—Rock County has foreclosed on part of the property while the former developers retain the rest of it—complicates future activity.
Godek said if everything comes together, the subdivision could have 20 to 25 homes within walking distance of Parker High School. But the biggest question facing the property is who will be responsible for the unpaid, decade-old infrastructure costs.
The interest on the money borrowed to finance the infrastructure is “steamrolling and snowballing really bad,” he said.
The city is trying to work with the county to write off some of the costs and make it easier for someone to buy the property. But the county board and city council will need to find an arrangement that works for both, Godek said.
“At some point, we’ve got to figure out what to do,” he said. “I expect we’re going to see a write-off, but what that write-off is, we’re still trying to work through.”
Ridges of Rock County
One subdivision that has long been stuck in neutral is showing progress. Ridges of Rock County, a development known to some as the former Kennedy Homes project between Janesville and Milton, has sold 34 lots since being purchased in 2017 by Advantage Homes, company executive Virgil Waugh said.
There were 12 homes built at the time of the sale. Since then, Advantage has finished or started construction on nearly two dozen, he said.
Marketing helped jumpstart the subdivision, where the average price sits around $250,000. Advantage keeps a model home open every Sunday, and getting a few homes built made it easier to attract homebuyers, Waugh said.
“Once we got some activity going, it was easy to make sales on the other sites,” he said. “The big thing is it’s a pent-up demand. This is a great location. The north edge of Janesville is where a lot of people want to live.”
Ridges of Rock County has another 45 lots available plus nearly 80 that haven’t had infrastructure developed. The original developer had paid for and installed the first phase of water and sewer lines and more, Waugh said.
Like Schuh, the Arbor Ridge Realtor, Waugh said it was hard to have a position on the city restarting the old infrastructure policy without seeing what it would look like.
At least one developer wants nothing to do with the policy, no matter what its potential terms might be.
Chris Cannell of First Midwest Group said his company would prefer to maintain control of all aspects of development at Emerald Estates, a fledgling subdivision on the city’s east side. That helps keep costs down.
The company has been the lead developer since the project started more than a decade ago. The subdivision built its first phase of homes several years ago but waited on going any further until this fall. Crews have nearly finished extending roads into previously vacant land.
In October, the city council approved extending—but not paying for—public infrastructure to 13 new lots in Emerald Estates. Undeveloped land north of those lots has room for another 37 homes, Cannell said at that meeting.
The flurry of activity is thanks to increased demand for housing, he said.
There’s one subdivision in Janesville that has bucked the trend of languishing, vacant land—Harmony Grove, a cluster of mostly ranch homes on the far north side.
Cherek, the city planning director, said it’s the only one that has filled since the recession.
Forster Construction acquired the partially completed subdivision several years ago and began developing it immediately. It took only a few years to finish the final phases, co-owner Cindy Forster said.
She estimated the 64 homes in their section of the subdivision are valued between $200,000 and $300,000. The houses mostly follow the same design, with different colors and slightly different features between them.
Co-owner Tom Forster said the success at Harmony Grove was because the company runs an “efficient, well-organized” operation. Forster is now developing Red Hawk Farms subdivision in Milton.
The Forsters are striking while the market is robust. They have been developing homes for more than 20 years, and they know economic conditions can change quickly.
“The real estate market is always very cyclical,” Cindy said. “It’s healthy now, but no one has a crystal ball.”