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November 18, 2019

Abigail Bostwick/Lakeland TimesMatt Kures of the University of Wisconsin-Madison Economic Development Administration presents on the regionís aging population during the Northwoods Economic Development Summit Sept. 23, 2019 at Nicolet College in Rhinelander.
Abigail Bostwick/Lakeland Times


Matt Kures of the University of Wisconsin-Madison Economic Development Administration presents on the regionís aging population during the Northwoods Economic Development Summit Sept. 23, 2019 at Nicolet College in Rhinelander.
10/3/2019 7:30:00 AM
Broadband, employment, housing: Heavy hitters at Northwoods Economic Development Summit
Abigail Bostwick
of the Lakeland Times

The phrase "lack of" was repeated frequently during lively discussions on housing, broadband, workforce and entrepreneurship at the Sept. 23 Northwoods Economic Development Summit at Nicolet College in Rhinelander.

Community leaders from Oneida, Vilas, Forest, Iron and Lincoln counties attended the event which covered a wide range of current and future trajectories of economic conditions. The event was hosted by Grow North, local University of Wisconsin Extension offices, the Lac du Flambeau Tribe, Forest County Potawatomi, Bay Lake Regional Planning Commission and the Federal Reserve Bank of Minnesota.

Speakers included Kristin Runge, Steve Deller, Matt Kures and Tessa Conroy, all with the University of Wisconsin-Madison Economic Development Administration, as well as Director of Regional Outreach at Federal Reserve Bank Ron Wirtz.

"What are the most pressing issues facing the overall economy in the Northwoods? Business, housing, workforce, broadband, young workers, wages and people...a lack of," noted Runge. "A lot of these issues are issues we are having across the entire state."



Housing

Entry-level housing and rentals, year-round good-paying jobs, a lack of seasonal help, few childcare options and training in technical jobs and manufacturing also topped the concerns of audience members.

"We are good in having access to open space, recreation, a low crime rate, we are close to a two-year college, have quality public schools and cultural opportunities," said Runge.

Deller address the lack of housing and challenges that sector is facing today.

"Are we heading for another housing bubble? That's what's got folks worried," Deller observed of a potential housing market crash such as the one the country experienced nearly a decade ago. "We didn't recover nearly as fast as the rest of the nation...rural areas are only just now starting to pick up steam."

Cost of construction for new homes is "through the roof" and only continues to rise, Deller noted, leading to fewer apartments and entry-level homes being constructed across the area.

"The markets are stacked against affordable housing," Deller relayed. "(Plus), there is a very weak rental market here. We are having a really hard time getting our hands on quality housing."

Because northern Wisconsin is primarily a tourist and retirement destination, young families have a hard time getting root, Deller added. Homes are either very low quality or such high quality they are not affordable to most. Further, because many homes in the Northwoods are second homes much of the high-end housing market sits vacant a good portion of the year.

Compounding the issues is how much a bank will loan to a homeowner. In some cases, bad practices have led to too much money being loaned and families or individuals not being able to keep up, thus, homes go into foreclosure, Deller said.

"We are starting to see this happen again," noted Deller. "We didn't learn from our mistakes."

Deller encouraged local leaders and citizens to engage in discussion regarding building codes, ordinances in their communities to change ordinances for stronger rules on landlords regarding low-quality rentals, work on fines for blight properties, seek out Habitat for Humanity, and work on grants to get more affordable rentals built.

"Attitudes of local lending institutions really matters," Deller said.

Deby Dehn, WHEDA (Wisconsin Housing and Economic Development Authority), noted area banks and credit unions have been supportive and that homebuyer eduction and financial literacy is especially important to avoid another housing bubble in the future and prepare homeowners to be successful financially as well as in being able to care for a property.

"Is there the political will in your community to make this happen?" asked Deller. "There's a range of options that can be pursued, but do they have the will, desire and knowledge to move forward?"



Aging population

The general trend in the Northwoods is the young graduate high school and leave for college and do not return. Some may come back to retire, however that leaves the area with a lack of workforce, Kures told attendees.

"We have an aging and retirement population here," Kures noted. "People leave for the city and do not return until they are older."

The projected numbers show a continued aging population, an especially high one in Wisconsin and in northern Wisconsin even more so, Kures added.

Most counties will see their over 65 population double in the next five to 10 years. Compounding the problem is a dropping birth rate in families. In some areas it is the lowest in 60 years, it was noted.

"There are challenges, but also some opportunities that come with these challenges as well," Kures said.

Stacey Johnson, executive director of the Oneida County Economic Development Corporation agreed with Kures, relaying much of the area is struggling with an older and aging population as well as a high rate of retirees. However, there is a lack of housing for them as well as care.

"People want to stay in homes and with their families," she said. "What I see is a great opportunity...we're small numbers here and this gives us the opportunity to stand out from the rest...and make a significant commitment."

Because primary sources of income for older populations are government funds, the area tends to lack extra funds for other sectors, it was noted.

"In northern Wisconsin, since the 1970s, income from this source has grown dramatically," Kures said, referring to Social Security.



Employment

An older demographic also is a hardship to the labor pool as it lacks diversity.

"People entering the labor market versus leaving is high," Kures indicated, adding this also means experience is leaving. "Really this is an important time for a convergence of skills. That gap. It's a bodies gap, but also a skills gap...the older are leaving and taking with them the education and training."

The hardest hit areas include, and will continue to include, healthcare, warehouse, utilities, transportation and public administration, Kures said.

Strategies to combat lack of workforce quality and quantity include education of high school and beyond, mentorship programs in the workplace as well as marketing the area to attract younger families and workers to move and reside here.

"We better invest in our people," relayed Kures. "Placemaking, telecommunity and phase retirement options would all help...how do we do things different to get people on board and keep them? There are a lot of potential partners to think about solutions here. The education system, state and local agencies, labor organizations...take a community by community approach."



Entrepreneurship

"Strong economies tend to churn," observed Conroy.

For as much start-up activity as there is, a thriving economy will tend to have as much closures of businesses, she explained.

"Hopefully, those businesses that fail come back with a new, successful venture," Conroy added.

With the downward birth rate and rising older population, there has been fewer new business activity in communities across Wisconsin and the Midwest, relayed Conroy.

"New businesses are important for job creation," she said. "Most tend to be small businesses. Small businesses create jobs."

A lack of new businesses therefore means a lack of jobs or slow job growth, she added.

"We're talking about a lot of missing jobs in the Wisconsin economy," Conroy explained. "There is a link between new business and going forward."

A plus for the Northwoods is that people who move here are apt to stay here and the same is true for Wisconsin in general, Conroy indicated. In-migration for the state is high, and life in the area is favorable.

To build on this, Conroy suggested more financing opportunities for start-up businesses, be it loans from banks or credit unions or revolving loan funds through organizations and counties. Working on legislative issues and reconnecting with current populations is also important, she indicated.



Broadband

Little or no internet access often leads to less business and fewer educational options, said Conroy. It also impacts the market value of rural homes, researchers have found.

While there have been broadband efforts and grants throughout the Midwest, not all areas are being reached and surveys and corporate provider estimates of coverage are not accurate - especially in remote areas like the Northwoods.

"We need to get in contact with our elected officials and doing a better job of demonstrating a large swath of the community as far as not having a provider," said Conroy.

Further, northern Wisconsin residents and officials have aired frustrations over discrepancies between the speeds that providers advertise are available and what service customers actually receive.

A recent study revealed houses where broadband is available were worth more than houses without it, Conroy said.

Communities need to work on an individual basis to determine what is best for them, their residents, government, businesses and possibly schools, Conroy relayed.



Business condition trends, trajectory

Federal Reserve Bank branches aim to involve tracking current business conditions, focusing on employment and wages, along with sector-tracking in construction, real estate, consumer spending and tourism. Federal Reserve Bank of Minneapolis networks and monitors a six-state region, both in person and via various communication channels, gathering traditional and nontraditional sources of information to assess current business activity, noted Wirtz.

The Federal Reserve decides upon federal rates and determines where the most opportunity is.

"We are trying to do a much better job of being visible," Wirtz relayed. "We track data and get a good feel for the current economy. The only way to do this is to talk to local businesses and find out what they see."

Wirtz also met with several local chamber directors at the Minocqua Area Chamber of Commerce during his stay in the Northwoods.

"A lot of what we're hearing is lack of housing supply, good-paying jobs, childcare and labor supply," Wirtz said of immediate local conditions. "We have fairly low labor participants here. We are trying to find out why. Is it transportation? Lack of childcare? Not enough pay?...we want to try to create more jobs as well as workforce enhancement."

Workforce enhancement would include employers helping enrich the employees they currently have and using those incentives to entice new workers, said Wirtz. This might include flexible hours, childcare options at work, some remote work, better benefits and education.

"We see a lot of positive things here, in our rural areas especially," Wirtz observed. "What I see is a lot of opportunity and dichotomy. I see areas like this as prime for growth."





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