Committee sends restrictive-covenant housing proposal back to staff amid legal, valuation concerns

The Marathon County Extension Education and Economic Development Committee discussed a proposal to use restrictive covenants on properties acquired through tax foreclosure to expand workforce housing and directed staff to return with recommended amendments to County Ordinance Section 3.2.

Committee members and staff repeatedly flagged legal risk tied to the U.S. Supreme Court-related litigation referenced in the meeting, noting Tyler v. Hennepin County and other pending state litigation that could expose counties to claims for proceeds in excess of tax debts. Administrator Leinart said staff would propose a process that emphasizes appraisals and other safeguards.

Why it matters: the committee is considering using county-held parcels to create or preserve affordable and workforce housing. Members said any policy must balance the county’s housing goals with potential liabilities to former owners and taxpayers if properties were later shown to have been taken for amounts exceeding what was owed.

Discussion centered on two practical questions raised earlier by the HR Finance and Property Committee: how to define which parcels would receive covenants (for example, excluding farmland, forestry or parcels with zoning that precludes housing) and whether appraisal or valuation protocols should be required before covenants are imposed. Supervisor Lemmer summarized the HR Finance discussion, saying the concerns focused on whether all parcels described as “buildable” should be treated the same and noting that amending the ordinance likely will be necessary.

Administrator Leinart described staff thinking that some of the treasurer’s current duties should be supplemented by administration and corporation counsel to ensure timely appraisals and legal review. He said staff has discussed using a template ordinance circulated by the Wisconsin Counties Association (WCA/AToLLIS) and would prepare proposed revisions, including language to protect the county’s ability to recover costs.

Supervisor Robinson said Marathon County has historically been slow to take tax deeds, which often left properties “underwater” (special assessments and back taxes exceeding market value), but added that as the county becomes more efficient the fiscal exposures change and will require quicker timelines and appraisals. He recommended a triage approach to avoid applying covenants to sites such as known contaminated parcels.

The committee did not adopt the proposal at the meeting. Instead members instructed staff to draft ordinance language and an implementation process that would: (1) identify criteria for which parcels would receive covenants, (2) require timely independent appraisals where appropriate, and (3) produce an annual report listing parcels recommended for covenants. Staff estimated it would return with recommendations within roughly 60 days.

Votes at a glance: the only formal motions on record were routine: the committee approved the Feb. 6, 2025 meeting minutes and later moved to adjourn. No motion to adopt restrictive covenants was made or passed during this meeting.

Ending: Staff will prepare draft amendments to County Ordinance Section 3.2, document proposed appraisal and recovery procedures, and present them to HR Finance and Property and then to the full board for consideration.