Growing our Economy with More Workforce Housing

HELP PROVIDE HOUSING FOR OUR GROWING ECONOMY

LEGISLATION

SB 172/ AB 156 Workforce housing multi-family tax

Learn More

Resources

Capitol Insights

Ep. 24, 23, 21

Removing Local Barriers to Workforce Housing

Wisconsin employers are having difficulty recruiting workers to fill thousands of job openings due to a shortage of affordable housing options for workers.

With statewide housing inventory levels at historic lows, median home prices continuing to rise, and apartment rent increases outpacing wage growth, Wisconsin has a major workforce housing shortage problem. Unless this workforce housing problem is fixed, Wisconsin will struggle to keep and attract the skilled workers necessary for our economy to thrive.

Single-family Home Permits 2004

Single-family Home Permits 2017

The Wisconsin REALTORS^® Association released a groundbreaking study, “Falling Behind,” that shows a severe workforce housing shortage and highlights the need for bold, bipartisan action now to address this growing concern.

From the more than 30,000 single-family home permits authorized in 2004 to fewer than 12,500 permits authorized in 2017, Wisconsin is on the cusp of failing to adequately provide housing for today’s growing workforce needs.

The REALTORS^® support legislation seeking to promote workforce housing by providing local governments incentives to reform local development regulations to lower housing costs, and greater flexibility to use tax increment financing for the purposes of providing additional workforce housing.

%

Year-Over-Year Dip in Home Sales (February)

Additional Resources

Industry expert predicts declining statewide home sales during peak months due to low listings

Newsmakers: Update on Workforce Housing Shortage

Walworth County Owner-Occupied Housing Report

AN ANALYSIS OF WALWORTH COUNTY AND ADJACENT COMMUNITIES

The results for the entire Walworth County housing market show signs of a shortage in the medium to long term. Policy changes that address this disequilibrium may improve the health of the owner-occupied housing market and prevent the current housing shortage from compounding.

Of particular note, our results suggest a significant shortage of affordable owner-occupied housing — i.e., the price bracket of homes that includes starter homes.

Results from Western Racine and Kenosha counties also suggest an even more pronounced overall shortage of housing than Walworth County as well as a similarly pronounced shortage particular to affordable owner occupied housing.

Policy that addresses this sector of the housing market — for example, policies that reduce fixed development costs, which most heavily impact the development of the most affordable homes— may improve the overall health of the entire housing market and ensure that there is sufficient supply of
affordable owner-occupied homes.

Download Report

PDF (25.1 MB)

Local communities must remember that development fees such as building permits, stormwater management or plat review fees; impact fees; and the approval process itself all contribute to the cost and affordability of housing. Moreover, these costs are generally fixed regardless of the price or size of housing and, thus, have a regressive effect on the affordability of housing.

One change that could encourage housing development is to establish a consistent schedule of low fees and non-onerous regulations across communities, or setting reduced fees for starter-priced homes. The fees, permits and processes a prospective developer must adhere to vary considerably between communities. These hurdles create inefficient “shoe leather” costs, or the additional costs from time and effort that developers are required to incur while parsing through differing standards.

The additional costs are inevitably passed on to the homebuyer or may even discourage developers from constructing affordable owner-occupied housing altogether and instead choose to construct larger homes with higher profit margins where these costs can be more easily absorbed. Ultimately, such costs are either passed on to the homebuyer, prevent the expansion of the affordable owner-occupied housing stock, or both.