Realtors, builders groups form coalition on Foxconn housing needs

Shortage of labor, materials and land will be an issue

Belman Homes is building side-by-side condos on Hawthorne Hill Drive in Waukesha.

Last updated on July 2nd, 2019 at 09:12 pm

Realtors and builders groups across southeastern Wisconsin expect Foxconn Technology Group’s plan to build a $10 million campus in Wisconsin to put more demand on the already tight housing market.

Belman Homes is building side-by-side condos on Hawthorne Hill Drive in Waukesha.

Members of the Greater Milwaukee Association of Realtors, Commercial Association of Realtors, NAIOP, the Wisconsin Builders Association and builders associations in Milwaukee, Racine and Kenosha met Tuesday to discuss how to build affordable houses in Racine County – where Foxconn is likely to build its manufacturing plant – and elsewhere.

“We’re going to be behind the eight ball,” said David Belman of Belman Homes and president of the Wisconsin Builders Association. “There is not enough supply of ready-made lots and some developments take years to develop. We need to be talking to the municipalities and elected officials to find a way to make this a more efficient process.”

The issue facing home builders is a shortage of labor, materials and land, coupled with regulations that increase costs.

A 2016 National Association of Home Builders report found that on average, local and state regulatory costs total $84,671 per home built, which has slowed the pace of new home building across the state overall.

That, coupled with the cost of land, makes it difficult to build a house for less than $300,000, Belman said.

With Foxconn reportedly creating jobs paying $53,000 per year, $300,000 homes will not be what many of those employees are looking for, Belman said.

Foxconn is planning a 20 million-square-foot plant, which is expected to be operational by 2020. It will initially employ 3,000 people with the potential to grow to 13,000.

Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said  the meeting was a chance for everyone in the room to wrap their arms around a subject that involves all aspects of real estate and construction.

“We don’t know where Foxconn is going, but wherever it is, this will cause a huge ripple effect for demand of all three – commercial, residential and construction,” Ruzicka said. “Besides where the Foxconn facility itself is located, we’ll need to look at existing land plans to figure out where over the next few years the future growth is.”

From a real estate perspective, Wisconsin is poised to absorb Foxconn and its buildings, but as far as where the company’s workers will live, Ruzicka isn’t so sure.

“Our window of time gets very small,” he said. “We have to get the communities on board to allow for new construction and we have to move quickly.”

The group will get together again in coming months to continue discussing issues.

“This is good for us in the long run,” Belman said. “We’ve identified these things as problems for years. Foxconn might have been the additional push we needed to move forward in a positive way.”

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