Our national economy is weird. We are going through an odd time. People are complaining about human feces on the sidewalks of San Francisco, and yet rents and housing prices are extremely high there. Are people fleeing San Francisco? Yes—but is that lowering rents in San Francisco? No. The same is true in Chicago and right here in our state’s big city of Milwaukee. Crime is going up, living conditions are getting worse, but rents are not going down. I have adult children living in major cities on the east coast, west coast and Chicago, as well as a daughter going to school in Milwaukee. Am I worried about them? Yes I am—very much so. But does high crime mean lower rents? No it does not.
And living with high rents is not just a big city problem. It’s true throughout Wisconsin. And it is true right here in Kewaunee. Yes, we have a very livable city. Yes, our crime is comparatively low. But we can’t really credit the fact that we have a beautiful, low-crime, wonderful town with increasingly higher rents. People are scooping up investment property for short-term rentals and long term rentals in virtually every part of Wisconsin. And frankly, the same phenomenon is true throughout the country. I have personally talked with city officials from many towns all over the county and the state. Everyone is affected by this issue.
I am not just a councilwoman in Kewaunee. I am also on the board of a county economic group call KCEDC (Kewaunee County Economic Development Corporation). We try to stimulate economic growth in the county. And sometimes we meet with others from the Greater Green Bay region or the State of Wisconsin. And everybody is seeing the same issue. Outside investment in housing is very strong right now; this is both good and problematic. People are investing lots of money in real estate here in the city of Kewaunee and everywhere else, but this is also causing a shortage of local housing.
One reason for this recent phenomenon are short-term rental companies—AirBnB, VRBO to name a few. Prices in Kewaunee are still much lower than the rest of the country, so folks looking for second homes for investment find Kewaunee properties very affordable and attractive.
Another reason for the shortage is that people have great 3% or 4% mortgage rates on their homes, so they are reluctant to put their homes on the market. Further, there is a great shortage of builders, so even if you wanted to build a house, the price of that house would be higher and may not be finished for years. Builders are being very picky about the projects they work on—a property without a house is likely to stay that way. And a property with a house is likely to be fixed up and rented out to vacationers, bridal parties or Packer fans from Milwaukee.
Some people are benefitting from this. Restaurants in the area are seeing more out of town guests. People selling their homes are finding buyers quickly and at a good price. And there are even businesses popping up to manage short-term rentals. Our boating businesses are back, as are the fish! And those local residents who have a house or a room to rent are making some extra money.
The city is also benefitting. We had a lot of rundown property in Kewaunee. Now, these short-term rental owners have bought up and fixed up a lot of formerly distressed properties. Some more taxes are coming in through higher property taxes and room taxes. So overall, some properties are being improved and our city’s tax revenue is a bit higher.
There are some downsides as well for some people. For those who plan to stay in their homes for a long time, it does no economic good to have a higher assessment. This just means more taxes for a home you don’t want to sell for many years. Also, some people may complain about short-term rental guests who may have too good a time staying up late at night in a formerly quiet residential neighborhood. And of course, there are the people who are working here, but can’t find a local house to buy or rent.
To put some rules around this new overwhelming economic investment in our town, there are committees looking into fair and constructive ways to manage the concerns of all our residents. At the moment, the Planning Commission is considering legislation appropriate for short and long-term leases. There are many opinions and perspectives. As a councilwoman, I am most interested that all rental property is well maintained, safe and clean. Please stay abreast of the latest news on this issue by attending a Planning Commission meeting. And there is one tonight, July 27th at 6pm at City Hall. All are encouraged to come!
One thing that everyone needs to understand is this real estate economic situation is very new. Seven years ago we had many houses sitting unsold for years. Even two years ago, the city bought up and demolished several distressed houses. We don’t know how long this short-term rental situation will last. It could be a bubble or the beginning of a new long-lasting reality. We simply don’t know. But we do know that it’s everywhere and that it is affecting many people. There are winners and losers. This is the time to let your voice be heard on short-term rentals in Kewaunee—as legislation is being developed. People involved in the short-term rental business will surely be at the meetings. People with any concerns, pro or con, should be part of this process.