Let’s start at the beginning. After I make a quick plea:
Several months ago, the Slater property on the east side of Whitewater received a huge $5.1M TIF subsidy for the purpose of building a 128 unit apartment. This was the first of it’s kind in recent history in Whitewater (probably ever). This was done without adequate transparency. The $5.1M amount was disclosed to the public right before the vote at a Common Council meeting. The public never got a chance to digest this or even comment on it.
Quick synopsis of TIF/TID funding in this case is that the builder will receive 90% of his property tax payment (from the city and school) back until he has received $5.1M (approx. 14 years).
TIF funding was originally meant for businesses. Taxes have simply gotten so high that communities need to compete by giving tax breaks. The rate of return for a business can typically be relatively justified as the taxpayers (and the community) will see typically see a return on investment (assuming the business is successful) in a few years.
Housing is a different story. To calculate the return on investment (for the taxpayer) for housing is an exercise in futility and would require quite an imagination.
As a general rule, when the problem is government (taxes and spending, in this case)… more government (TIF/TID) is NOT THE SOLUTION. This is the socialist death spiral.
So the Slater property has been followed by significantly more possible housing developments. The total TIF/TID tax breaks could be in excess of $30 Million dollars.
As a result, I became concerned about that impact on the schools, the police, emergency services to name just a few. I decided to run for Whitewater Common Council.
This graphic is the most accurate and unbiased representation of most uses of TIF. Contrary to the constant distortions by conflicted TIF proponents. The area marked as red ink is clearly the value lost by the diverting of all property tax revenue increases to urban renewal debt instead of the municipal services that would otherwise be getting the proceeds needed to help keep pace with rising costs. Any slight variation which may occur with some municipality is an insignificant exception. Suggesting some hypothetical possibility that the loss may be only a percentage of what is labeled as red ink is the kind of fog often commonly used to deliberately confuse the perception of TIF.
Essentially every municipality engaged in the use or promotion of TIF uses a TIF graphic that purposefully omits the long term losses to the pre-existing property tax beneficiaries and fails to note how the loss cripples the ability to meet rising costs. Graphman-Creator of the TIF Graph.
Since deciding to run, I have spoken with several hundred people. Time and time again I am asked why the city is giving all this money to builders.
Not once have I been told that putting all this burden on taxpayers is a good idea. I recognize that Brianne Brown (assemblywoman) and Miguel Aranda (currently running for school board) favor this burden; however I see that this opinion is relatively rare in Whitewater.
This week the city put out this claim:
The city is referring to this as a “crisis”. It is fairly evident that a majority of Whitewater residents do not agree.
The whole thing simply does not pass the “smell test” (much like a baby’s diaper).
As someone that is asking the voters on the east side of Whitewater for their confidence and support, I decided to do my own research.
What I discovered is not to be taken lightly.
I am going to pause for a moment from the overarching thought here to (hopefully) humbly present my credentials. In the years I have posted here, I have not done so. Now seems to be a good time for this.
I am a Senior Mechanical Engineer for a very large, global company. I am officially in Leadership within the company. I am involved in cutting edge technologies such as aritificial intelligence as well as some that I cannot discuss. I honestly do not know how many patents that carry my name. I believe I am valued for my ability to dissect data as well as my ability to solve complex problems. Difficult conversations are had quite often with opposing stakeholders. The financial impact of projects that I have led are far greater than the annual budget of the city.
The Analysis
Near-zero availability of single-family rentals. 50%+ of renters cost-burdened, spending over 30% of their income on housing.
For the last five years, our federal government printed $1 Trillion dollars roughly every 100 days. This has resulted in inflation and higher interest rates. If I were to purchase my home (that I purchased in 2016) today, my monthly mortgage payment would be triple (or more) than what I currently pay.
There is not a lot we can do about this, as a community, other than vote out those reckless politicians.
The city’s response to this claim is to give tax breaks to wealthy builders, which will provide a greater financial burden to the people of Whitewater.
If taxpayers are already burdened by housing costs, why is the city asking to burden them further?
0.7% apartment vacancy rate
This is where it gets very interesting.
College towns have larger than normal variability during the year with regard to apartment vacancy rate. Turnover rates are very high. Many college kids are not here over the summer.
An accurate measurement of the apartment vacancy rate in Whitewater will go over a twelve-month period and show a range.
I also happen to know an apartment near me with six current vacancies. This makes this 0.7% claim to be highly suspect.
I believe the city needs to take down any documentation this 0.7% snapshot. Replace it with a twelve-month range.
Conflicting Reports
There are three reports on Whitewater housing that I have been given.
There is also a Strategy Planning Guidelines by Tracy Cross in April 2024 to align with their April 2024 report.
I do not have any particular takeaways to share from any of these analyses. Simply put, there is nothing in any report that drives me to want to burden Whitewater taxpayers with tens of millions of dollars in TIF subsidies. If you would like, read them for yourself.
My big takeaway actually comes from a different source:
If there is a city in the state that has a larger percentage of rental properties, I cannot find it (and not for lack of trying).
30% of homes in Whitewater are owner occupied.
Milwaukee has 50% owner occupied, and that is considered an epic low.
Kinda blows me away that someone would tell the city in Wisconsin with the largest percentage of rentals (by far) that they need more rentals. Just a little healthy skepticism.
healthy markets need 5-6% (per the city of Whitewater)
If you have made it this far into this analysis… well, I have saved the best for now.
I will begin here by writing that the city needs to take down any information they provide that states 5-6% is healthy. It is simply wrong.
The current state of housing in Whitewater is relatively healthy. Not perfect, but certainly not worthy of all of this expensive urban planning.
After reading the city’s claims and reports, I did my own investigation. I quickly found much information contradictory this 5-6%.
I am not a huge fan of Google AI; however I typied an inquiry about rentals. The result was that 2% vacancy in a rental market is considered “good”.
If you follow thru with Google AI (or any other AI), it will list the sources for which you can follow up.
Next, I decided to cross reference it with the AI that I use (and pay for this service). Grok AI (Elon Musk’s AI). The full inquiry including sources is at the bottom of this blog post or here.
3-5%: This is often considered a healthy vacancy rate for most markets. A vacancy rate within this range typically indicates a balanced market where there’s enough supply to meet demand without causing significant rent pressures or vacancies.
So what is the effect of university students on local housing?
Lower Baseline Vacancy: Due to high demand, especially during the academic year, a reasonable vacancy rate in university towns might be lower than in other areas, potentially around 2-4% rather than 3-5%.
Again, I strongly recommend (if you are so inclined) to read the full inquiry at the bottom. The many sources of this info are listed with the inquiry.
The City of Whitwater claims 5-6% vacancy rate is needed. Experts claim 2-4% is healthy.
Add the possibly temporary influx of migrants to the equation.
Add inevitable decreasing enrollment at the university to the equation.
How has the city reacted to pushback from taxpayers?
The city has three big government housing advocates coming to City Council meetings for over the next three meetings:
Deb Reinbold (Thrived)
Derek D’Auria from WCEDA
Kurt Paulson – Professor of Urban Planning at UW-Madison
I would certainaly expect that these housing advocates provide their conflicts of interest with regard to housing.
Where are the advocates for the taxpayer?
Final thoughts
Get involved. Where there is a void or vacuum, big government will quickly step in and provide very expensive direction.
If you are a big government, housing advocate, my advice to you is to do it with your own time and money. Do not burden the hard working taxpayers of Whitewater.
Well, I hope you enjoyed this analysis. I hope you made it through it.
Peace and joy and love to you.
Let me know your thoughts. Email me at mike@mspd-llc.net
-mike
what is a reasonable amount of rental properties in a community to be vacant?
Determining a reasonable vacancy rate for rental properties in a community involves considering several factors, including local market dynamics, economic conditions, and the balance between supply and demand. Here are some general guidelines:
Healthy Market Vacancy Rate:
3-5%: This is often considered a healthy vacancy rate for most markets. A vacancy rate within this range typically indicates a balanced market where there’s enough supply to meet demand without causing significant rent pressures or vacancies.
Economic Indicators:
Below 3%: This might suggest a very tight market, potentially leading to rapidly increasing rents and possibly indicating an undersupply of rental properties. It might also mean that renters have fewer choices, which can affect housing affordability.
Above 5%: Higher vacancy rates can suggest an oversupply of rental units, which could lead to downward pressure on rents. This might be due to overbuilding, economic downturns, or shifts in population or employment.
Seasonal Fluctuations:
Vacancy rates can naturally fluctuate seasonally. For example, university towns might see higher vacancies outside of the academic year.
Local Market Characteristics:
Urban vs. Rural: Urban areas might have lower vacancy due to higher demand, whereas rural areas might have higher vacancies due to less population density or economic activity.
Economic Base: Communities with stable, diverse economic bases might maintain lower vacancy rates than those reliant on one industry.
Regulatory Environment:
Rent control, zoning laws, and other local regulations can influence vacancy rates by affecting both the supply of new housing and the incentives for landlords to keep properties on the market.
Property Type:
Luxury apartments might have different vacancy rates than affordable housing units due to different target demographics and market conditions.
Given these considerations, here’s how you might interpret vacancy rates:
0-1%: Extremely low, suggesting potential housing shortages or very high demand.
1-3%: Indicates a market where demand is high relative to supply.
3-5%: Generally seen as a balanced market.
5-10%: Could indicate an oversupply or economic issues affecting demand.
Above 10%: Suggests significant issues like economic downturns, population loss, or too much new construction without corresponding demand.
For your community, without specific data, I’d recommend:
Consulting local real estate data from sources like the U.S. Census Bureau, local housing authorities, or real estate market analysis firms.
Looking at trends over time rather than a snapshot to understand if the current rate is an anomaly or part of a longer trend.
Considering the economic and demographic context of your community to interpret what these numbers mean locally.
If you have more specific data about your community or need further analysis on this topic, feel free to provide more details!
what is the impact of a university and student housing on the reasonable amount of rental properties in a community?
The presence of a university and student housing can significantly influence the reasonable vacancy rate for rental properties in a community in several ways:
Increased Demand:
Student Population: Universities attract large numbers of students, many of whom require housing. This can lead to:
Higher Demand for Rentals: Particularly for apartments, houses, or rooms near the campus. This often results in lower vacancy rates during academic terms.
Seasonal Fluctuations: Vacancy rates might spike during summer breaks when many students return home, creating a seasonal pattern of high demand in term-time and lower demand off-term.
Non-Student Renters: The influx of students can also indirectly affect the broader rental market:
Displacement: Long-term residents might be pushed out of traditional neighborhoods near the university due to rising rents or changes in neighborhood dynamics, thus affecting where and how they seek rental housing.
Pressure on Affordable Housing: If student housing options are limited or expensive, students might compete for affordable units, impacting low-income or fixed-income residents.
Supply Dynamics:
Student Housing Development:
Purpose-Built Units: Universities or private developers might build dormitories or apartments specifically for students, which can increase the overall supply but be less relevant to the general rental market since they are often leased out en masse.
Conversion of Existing Properties: Homes or apartments might be converted into student housing, potentially reducing the supply for non-student renters.
Rental Market Segmentation:
Short-Term Leases: Students often prefer shorter lease terms, which can lead to higher turnover rates and affect the stability of occupancy in rental properties.
Economic and Cultural Impact:
Economic Boost: Universities can stimulate local economies, leading to:
Increased Job Creation: More jobs mean more workers needing housing, which can tighten the rental market further.
Business Growth: New businesses catering to students can lead to more employees and residents, again impacting housing demand.
Cultural Changes:
Neighborhood Character: The student population can change the demographic and cultural fabric of neighborhoods, which might influence where others choose to live.
Impact on Reasonable Vacancy Rates:
Lower Baseline Vacancy: Due to high demand, especially during the academic year, a reasonable vacancy rate in university towns might be lower than in other areas, potentially around 2-4% rather than 3-5%.
Seasonal Adjustment: A higher vacancy rate (e.g., 5-8%) during non-academic periods might be considered reasonable if it correlates with student absence.
Housing Policy: Universities might implement housing policies that affect off-campus housing markets, like requiring first or second-year students to live on-campus, which can temporarily ease off-campus demand.
Community Planning: Local governments might need to adjust zoning laws, encourage or regulate student housing development, or implement policies to ensure housing availability for all residents, balancing student and non-student needs.
To assess what’s “reasonable” in your specific community, you’d need to consider:
Current Data: Look at local housing statistics, occupancy rates, and student enrollment numbers.
Trends: Analyze how these numbers have changed over time with university growth or policy changes.
Local Housing Initiatives: Understand any local efforts to manage student housing impacts on the broader community.
If you’re looking at a particular community, providing more specifics about the university’s size, student housing policies, and local market conditions would help in giving a more precise answer.
what is your source of this infomation?
My information comes from a combination of:
General Knowledge: I have been trained on a vast array of texts which include books, articles, and other publicly available documents up to my last update. This includes general principles of economics, real estate, urban planning, and university impacts on local communities.
Real-time Web Access: When answering questions, I can search the web for the latest data, articles, and analyses. However, for this particular question, I’ve relied more on general knowledge because the specifics can vary significantly by location, and without a specific area in mind, I provided a broad overview based on common trends and studies.
Academic and Industry Studies: There have been numerous studies on the impact of universities on local housing markets. These studies often look at case examples from different cities to draw broader conclusions about student housing’s effect on vacancy rates, rental prices, and community dynamics.
Governmental and Policy Research: Reports from bodies like the U.S. Department of Housing and Urban Development (HUD), local government planning departments, and non-profit organizations focused on housing and urban development contribute to understanding these dynamics.
News and Media: Coverage of housing issues in university towns often provides insights into real-world impacts and policy responses.
For any specific statistics or current data, I would recommend:
Local Real Estate Market Reports: These are often published by real estate firms or local chambers of commerce.
University Reports: Some universities publish data on housing, enrollment, and their impact on the local area.
Government Databases: Like the U.S. Census Bureau for demographic and housing data.
If you’re looking for detailed or localized information, you might want to consult:
Recent academic papers on urban studies or economics focusing on housing markets.
Local news for current community discussions and data.
Real estate analysis websites like Zillow, Redfin, or local equivalents.
Remember, for accurate and current information tailored to a specific community, direct sources or recent studies from that area would be most beneficial.
Discerning Whitewater 
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