RACINE COUNTY — When Foxconn Technology Group hires 3,000, 8,000 or 13,000 people someday — where are all of those people going to live?

Surely, not every future Foxconn employee will live in Racine County. But an effort is underway to try to coax in as many of them as possible. That initiative is designed to prime the pump for the construction of a wide array of housing types in Racine County in the next few years.

Jerry Franke of Franke Development Advisors is leading the charge on behalf of Racine County Executive Jonathan Delagrave and Racine County Economic Development Corp., under the direction of RCEDC Executive Director Jenny Trick.

Franke’s work is to be capped off at a housing summit on Sept. 12, at which developers will be invited to consider building housing on any of approximately 10 potential local sites which Franke calls “development opportunity zones.”

On Tuesday evening, Franke presented his findings and recommendations to the Racine County Board. He had first shown the presentation, “Housing Impacts and Opportunities from the Foxconn Development,” to a gathering at Wingspread on June 25.

Franke calculates that 10,484 housing units will be needed to house all 13,000 future Foxconn employees.

And that doesn’t even take into account the roughly 10,000 construction workers that will be needed.

Franke explained recently that Delagrave “really wants to capture as much of the residential growth that will be generated by the Foxconn and related jobs for Racine County. Because people tend to spend most of their disposable income where they live. And so, Jonathan wants this to be a positive economic experience for the county.”

“The last thing we want,” Delagrave said, “is that we get all this ancillary development and then (people) go outside Racine County and spend that disposable income.”

Delagrave said Racine County needs to have “a continuum” of housing types developed. He also said planning and coordination are needed among the municipalities so housing is developed where the necessary infrastructure exists, for cost efficiency. Not doing so, he said, would make the developments more expensive — and likely rents and housing prices also.

“We want to make sure there’s a continuum of housing and that it’s located and developed as efficiently as possible.”

Wanted: market-rate apartments

Franke made a startling statement about one particular type of housing and the greater Racine area. He said, “There has not been a market-rate apartment (modern apartment with no rent restrictions) developed east of the ‘I’ in Racine County in a year beginning with a 2.”

That means the greater Racine area is 20 years behind on supporting the creation of new multifamily housing, Franke says.

He asserts in his presentation that “Development is coming; it is time for our communities to guide the right type of development in the right places.”

Meanwhile, Franke said, since 2012 the construction of market-rate apartments has been one of the hottest types of commercial real estate investment and development. He cited Oak Creek, Kenosha, Pleasant Prairie, Menomonee Falls and Greenfield as places where the construction of market-rate multifamily housing has been occurring.

Franke said it’s not just millennials who choose apartment living. For example, at Drexel Town Square in Oak Creek, with hundreds of apartments being built there, “It’s not just millennials,” he said. “There’s a lot of (baby) boomers in there. … Many times they go back to a smaller home; many times they stay.”

“Now, that’s not the only thing we’re going for” with this Foxconn-related housing effort, Franke emphasized.

“But, the bottom line is: Many of these Foxconn employees will not come in and buy a single-family home. That takes a long-term commitment. I think with any new enterprise like we’re going to experience with Foxconn, everybody’s going to want to stick their toe in the water. So, you need to have a place for people to live.”

That means having as many housing options as possible, Franke said, including condominiums for sale or rent, townhouses and so on.

“We’re trying to begin the conversation,” Franke told the County Board.

Challenges

Franke’s housing presentation identifies several challenges to creating the needed housing.

One is that, with a dearth of modern multifamily housing in eastern Racine County, it’s difficult to know how much people are willing to pay for that type. In Oak Creek’s newest apartment developments, monthly rents range from $1,100 to $1,400 for a one-bedroom unit. “In the communities that are adjacent to us,” Franke said, “they are paying that.”

Another is the REC, or residential equivalent charge, that developers pay to offset the costs of water and sewer infrastructure.

A third potential problem is inflated land prices driven by Foxconn-related land speculation. “Developers will not overpay,” Franke said. “They will just go out(ward).”

RCEDC and Delagrave have given Franke multiple tasks. He said the first is to get municipalities east of I-94 thinking positively about creating 21st century residential development, both ownership and rental.

“Too many of them are saying, ‘No apartments,’ and that’s just not the right answer,” Franke said. “If that’s the answer, then Oak Creek and Somers and points south and north will benefit, and Racine (County) just won’t grow. And we won’t get that disposable income that we’re trying to achieve.”

Franke said if the greater Racine area is to land future Foxconn employees, housing development projects must start next summer. That would bring new housing options into being by 2020.

He plans to share his housing study with any area public officials that are interested.

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