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Business & Economics

Developers convert vacant motels to apartment units to tackle affordable housing shortage

Motel
Erin Gottsacker
/
WXPR
Tim Shimek is converting motel rooms in the Silver Lake Inn in Laona into apartment units. Demand for the units is high.

Housing in northern Wisconsin is in such short supply that some people turn down jobs in the area because they cannot find a place to live. Employers have come up with a solution — convert vacant motels into affordable housing.

When tourists started flocking to the pristine lakes and quiet wilderness of northern Wisconsin, motels and resorts popped up to serve them.

By the 1950s and 60s, renting a room was the way to vacation in the Northwoods.

But that has changed over the last few decades.

“Back in the 60s, not everybody had a cabin in the woods. Now, the tradition in Wisconsin has become just buy a lake property and go there every weekend,” says Tim Shimek, a property manager and developer in Rhinelander.

He has watched as people abandoned motel rooms in favor of private lakeside homes, or cabins rented from Vrbo.

The shift left once bustling motels sitting empty — their queen-sized mattresses and bulky tv sets collecting dust.

However, investors like Shimek see these decaying buildings as an opportunity.

Motel renovation
Erin Gottsacker
/
WXPR
Tim Shimek, a local developer and property manager, stands inside the Silver Lake Inn, where renovation efforts are underway.

“I’ve been keeping my eye open for the last few years for mom-and-pop motels that aren’t surviving anymore,” he says. “Vrbos are a thing now and everybody is renting their lake homes, so I’ve been keeping my eyes open, and I know that housing is an issue up here — permanent housing.”

When Shimek discovered the Silver Lake Inn in Laona, he contacted the owners on Facebook and made an offer. The 1950s building once housed a thriving inn and supper club. But since the restaurant burned down a few years ago, the inn has sat vacant.

Shimek is trying to change that.

He has been renovating the place for the past six months, repainting red and green walls a bright white and re-establishing gas and electricity.

When he is finished, the building will host ten apartment units. He has already had 60 people apply for those units.

“I’ve gotten applications like crazy,” he says. “Most of the people that we’ve got applying right now are semi-local or are people that live here in the area that are just looking, looking, looking, looking for a place to rent.”

Shimek is not the only person doing this.

Developers have converted motels into long-term living units in Minocqua and Eagle River too.

Rick Wilson, the owner of Pukall Lumber Company in Minocqua, says he converted a motel into affordable housing because his employees could not find anywhere to live.

“It’s not like my wife and I really wanted to do this, but there’s such a need within Pukall Lumber Company to find housing for employees,” he says. “We had three employees that we offered jobs to, and they looked around town and they came back at the end of the day and said ‘I can’t take your job.’ The third time, I said that’s it, I’ve got to do something.”

motel.jpg
Erin Gottsacker
/
WXPR
The Little Arbor Vitae Motel now holds dozens of affordable apartment units.

Like Shimek’s property, the Little Arbor Vitae Motel was built in 1946 for vacationers staying for a week or two at a time. The quarters are tight.

“Honestly, people just need a place with a hot plate,” Wilson says. “Every room has a microwave and a refrigerator just like a motel room would have. But this is what they’re looking for, and they can get it for under $600. There’s demand for just this.”

Wilson says his idea is for people to stay in the renovated motel until they can find more permanent housing.

The demand for this type of transitory housing was higher than Wilson expected. The building’s units rented in less than 2 weeks, with many to Pukall Lumber employees.

This conversion from motel to apartment complex will likely become more and more common says Eric Schoessow, who has worked in real estate in the Northwoods for decades.

“There’s a lot of motels on the market right now,” he says. “People are getting out of the business because of what’s going on with Vrbo and vacation rentals. It’s taken away from the mom-and-pop motels. So, what do you do with them when you sell them? You have to utilize them for housing and that’s what I think a lot of people can do and should do.”

Schoessow has converted several former motels into multi-family apartments.

He finds they are popular among older seniors looking for simple living arrangements and young people moving into the area to work.

Because many Northwoods townships are hesitant to build new apartment complexes, he says this is one of the most obvious ways to provide more affordable housing.

“We go up to the Northwoods for a reason. We go up there to try to escape and you want the Northwoods look. You don’t want a bunch of overly modern apartment buildings going up and taking away from that,” he says. “You could still build some multi-family apartments in the area and you could make them look nice with a Northwoodsy look, a log look. But you have to have municipalities that are willing to do that. Otherwise, you have to convert.”

With building costs higher than they’ve been in years, converting could be a viable option to address the pressing need for more housing in the Northwoods.

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