Oshkosh staff recommends selling Washington lots at $35,000 to spur workforce housing

City housing staff told a council workshop that bids to make 18 Washington School-area lots “build-ready” came in higher than anticipated and recommended selling the lots for $35,000 each — including nine earmarked for Habitat for Humanity — to close a roughly $200,000 funding gap.

The recommendation follows a July bid process. “The lowest bid came in at about $830,000,” a city housing staff member said, describing the work as private laterals, grading and storm-water preparation that would leave the lots ready for building. That bid equates to an average cost just under $46,000 per lot, staff said.

The bid shortfall leaves a funding gap staff recommended covering largely from city capital-improvement funds (CIP) or other internal sources. “We played with DPW CIP,” the housing staff member said, but ruled it out because the work is on private laterals and thus does not meet DPW’s public-facing requirement. Staff also said they considered borrowing from the state trust fund and noted proceeds from lot sales would offset some costs if developers or Habitat buy lots.

Julie, finance staff for the city, told the workshop that $75,000 in ARPA funds had been designated and spent on purchase of the Washington School site. “$75,000 of ARPA funds was designated for the Washington School site purchase,” she said; those funds were not included in the per-lot cost figures shared at the workshop.

Staff recommended selling each lot at $35,000 — higher than the $25,000 figure discussed in early conversations but below the roughly $46,000 per-lot construction cost from bids. Council members indicated informal support for the $35,000 price and for income-eligibility rules expected to be included in the master-builder request for proposals (RFP). The guidance at the workshop was not recorded as a formal roll-call vote.

Eligibility and other restrictions: staff recommended income limits and program rules to keep the homes affordable. The proposal discussed using U.S. Census median-income figures by household size and limiting buyers to households at 80%–120% of area median income (AMI); at the workshop council members signaled acceptance of 80%–120% as the target range. Staff also said buyers must be Oshkosh residents.

On resale and equity protections, staff proposed an equity-recapture clause and discussed a five- or 10-year period before resale without repayment. Council members and staff settled on five years as the preferred recapture window for the RFP, with staff saying the city would place a lien and remain in second position to protect the public investment. Staff described that as an administrative requirement to enforce any repayment if owners sell within the recapture period.

Builder selection and timing: staff said the city will issue an RFP for a master builder for the nine city-side lots and recommended that builders take title to lots; the city would verify buyer eligibility before final closing rather than selecting individual buyers itself. “I do not have the staff or time to do that,” the housing staff member said about selecting occupants, describing the practical reason for letting the builder select buyers subject to city verification.

Staff proposed a two-year build deadline for the developer and a standard housing specification (three bedrooms, two baths, basement egress allowed, garage, and neighborhood-appropriate aesthetics) so new homes match surrounding development. Habitat for Humanity’s local executive director, Tom Simon, was described as aware of the bid results and on a timeline that could begin construction next year with completions in 2027–28, staff said.

Other sites: staff previewed Farmington, a larger site of about 31 lots that needs more extensive infrastructure (roads, mains and laterals) and estimated a first-phase cost near $2 million; staff said Farmington would require separate, longer-term planning and funding decisions.

What council set and what remains to be decided: workshop discussion produced council direction (not a formal vote) to proceed with drafting an RFP using a $35,000 per-lot sale price, 80%–120% income-eligibility guidance, a five-year equity/recapture clause and a two-year build timeline. Staff said it will return with draft RFP language and additional options for incentives, permit-fee relief and coordination with other local housing programs. Staff also listed potential funding sources to cover the approximately $190,000–$200,000 gap, including CIP reallocation or borrowing.

The city’s next steps are to finalize the RFP for a master builder, confirm funding sources for the bid shortfall, and continue outreach to Habitat and other developers. No formal ordinance or sale resolution was adopted at the workshop; any sale, program agreements, or CIP reallocations will require future council action.

Votes at a glance: No formal motions or roll-call votes were recorded at this workshop. Council members signaled informal approval of the staff recommendations described above, but staff and council said formal actions will return in a future meeting for official approval and any budget adjustments.