A Janesville downtown with several hundred new apartment units?
It’s a future that might not be far off, even if it’s been a long, cold winter fraught with continued inflation and bottlenecks in construction labor and materials.
The need exists for a range of housing, with market-rate rentals remaining a particularly tough to button to push.
Throughout the region, consumers are looking for a sweet spot that rests somewhere between affordability and location. But there will be a growing number of families who will be seeking housing in Janesville, according to a recent, independent study commissioned by Forward Janesville.
Over the next four years, the study indicates, economic growth forecasts show that more than 7,000 such families could seek to move here, according to the study.
They’d choose Janesville as a place to work and live if there is a broad range of housing options to meet their needs, it said. If not, they might opt to stay put, commute here or move someplace else in the region where housing is more plentiful and more affordable.
Seven thousand families.
That’s one reason why several local developers are eyeing big apartment projects that soon could come to downtown Janesville. One local developer is refitting a former funeral home property on North Jackson Street across from City Hall that would bring a handful of new apartments to the downtown.
And work continues on the six-floor, former Monterey Hotel along West Milwaukee Street. The defunct but iconic Art Deco hotel is undergoing a transformation that a local owner and a Madison development partner say could bring 50 or so apartments downtown.
These are redevelopments that would continue a nearly decade-long, public-private revitalization movement that the city and private-side investors have continued to invest in along the downtown’s riverfront.
One of the linchpins in downtown revitalization—and in Janesville’s future hopes at attracting families—would be meeting demand in a demographic that housing market experts call the “missing middle.” That segment is mainly made of working-class renters with solid incomes who seek, but aren’t finding, very many mid-priced apartments, either here or regionally.
That’s in part because there simply aren’t enough housing units here to meet the market demand.
But how much to build? And where?
The question is whether to wait to see whether the workers show up looking for a place to live and who will be the first to test the waters. It’s a chicken vs. egg argument that’s long vexed local housing officials, developers and local industry leaders.
There’s risk involved, and the main worry now is inflation and its potential impact on building.
Because of that risk, look for any new apartment developer to turn to local governments here (and everywhere else) for increased tax incentives and other economic development packages that would help cover real or speculative gaps in project costs.
And look for municipalities (you’d hope) to be calculating potential risk to taxpayers of any incentive package that’s tied to rental housing, a market that’s as fickle as it can be lucrative.
Blue collar rents
Back to the blue-collar workers with the solid paychecks.
Marketing people call them “flush families,” and more seem to want to live here, survey analysts tell us.
Those people earn above and beyond a baseline income that would qualify them for affordable-housing subsidies. Yet, they face a hunt for housing in a local market with few apartments.
What’s now out there, increasingly, are one-bedroom apartments renting for well over $1,000 a month. Most two- and three-bedroom apartments have rents even pricier.
The city of Janesville and Milwaukee developer Zilber Property Group earlier this month announced a brand-new, 180,000-square-foot, ready-to-go manufacturing building off West Venture Drive could by this summer become the home of Phelps Pet Products, a pet food manufacturer that would pay workers at least $20 an hour.
The jobs (a total of 103 workers) would be subsidized over nine years by a city of Janesville tax-incentive that would hinge on the company paying its employees at least $20.82 an hour. That’s a payday that’s considered by Massachusetts Institute of Technology economists as the minimum threshold for a “living wage” for a family of four, the city said.
That’s pay that local economic development officials believe could draw a workforce from nearby labor markets such as Rockford, Illinois. Or at least, that’d be the hope.
At least some of those workers have families, and some of them might want to move to Janesville rather than commute. If there’s housing available, it would be for people whose rank-and-file paychecks also would fuel local restaurants, grocery stores, retail shops.
Risks in the market
There’s no guarantee that the regional economy will continue to ring twin bells for industrial expansion and new housing.
Things could slow, whether it’s because of persisting, pandemic-driven bottlenecks in construction labor and materials or other headwinds that are coming in tandem, such as a projected 20% jump in building costs for housing and apartments.
Jumps in costs can lead to rent increases, another form of inflation that’s a challenge for developers planning projects, rent-paying tenants, and municipalities who seek to lure families here.
Then there’s global concerns, including fluctuations in bank interest rates, jumps in oil prices, and multiple layers of new economic volatility tied to wartime turmoil in European markets.
That wouldn’t change the fact that by this summer, and in the months to come, at least a portion of 103 new, decently-paid pet food workers here would be looking for a place to live. They’ll likely be far from the only ones.
They’ll need to be able to find decent, affordable places to live in Janesville, soon, or they won’t come here.