Municipalities in Waukesha County may need to explore zoning changes, expedited development approval processes and increased public awareness if the county wants to reverse its housing affordability challenges, which have only become more acute in recent years.
According to a new report from the
Wisconsin Policy Forum, Waukesha County has the highest home prices in the state, with rents only higher in Dane County. Further, the county’s vacancy rate in the owner-occupied market was only 0.2 percent in 2021 and there’s only been 176 affordable apartment units built in the county during the last decade.
“Waukesha County’s affordable housing challenges have reached new heights due to economic trends stemming from the COVID-19 pandemic, demanding consideration of strategies to reduce the cost of renting, buying, and building homes,” the report says.
While some of these trends are seen statewide and nationally, they are more pronounced in Waukesha County.
“One clear takeaway from our analysis is that there is no ‘silver bullet,’” the report says. “Rather, multiple strategies are needed to increase and diversify the county’s housing supply and to improve affordability over the longer term.”
The report outlines six things that contribute to Waukesha County’s affordability challenges:
- High housing costs are already out of reach for many and rising faster than incomes: The county’s median home sales price increased by over 41% between 2016 and 2021, while its median household income rose only 15%.
- Inventory is low and housing production is not meeting demand: The number of homes listed for sale in Waukesha County has declined, while the vacancy rate in the owner-occupied market was just 0.2% in 2021. The county added nearly 1,200 more households than housing units between 2010 and 2021, as fewer units were permitted than in the years preceding the Great Recession.
- Very little affordable rental housing has been built in the last decade: Between 2013 and 2023, only three developments in the county totaling 176 affordable units were supported with federal or state low-income housing tax credits.
- Zoning regulations limit the variety of housing that can be produced and impact housing costs: Some Waukesha County municipalities restrict developers from building smaller homes on smaller lots, which can add to the total cost of homes. In the last five years, the average size of new lots created by subdivision was twice as large in Waukesha County (0.67 acres) as in Dane County (0.31 acres). Many Waukesha County municipalities also prohibit duplexes and multi-family housing development in most areas of their communities, bar the construction of accessory dwelling units, or impose extensive parking requirements on multi-family housing that add to the cost of each unit.
- The cost of infrastructure and utility extensions and expansions are additional barriers: When subdivisions are created, water and sewer services, private utilities, roads, and sidewalks must be built or extended. For multi-family housing, more intensive modifications often are needed.
- Public opposition poses a major obstacle to housing development: Developers commonly propose denser, mixed-income housing, but community members frequently oppose such developments due to concerns about potential impacts on traffic, parking, or property values. This can cause delays, increase costs, or derail projects entirely.
As a result, 43% of Waukesha County renters were paying more than the economist-recommended 30% on housing each month.
The report notes that this is having an impact on the county’s workforce as many occupations including nursing assistants and bank tellers do not make enough money to afford housing in the county, on average. Further, the county’s job to housing ratio of 1.37 is the worst in the state.
“Both state and local action could play a role in fostering housing affordability in Waukesha County,” the report says.
- Zoning changes, such as allowing for smaller homes on smaller lots; permitting duplexes in districts zoned for single-family housing; allowing multi-family housing development in more places, including commercial districts; permitting accessory dwelling units; and reducing or eliminating minimum parking requirements for multi-family housing developments.
- Expediting development approval processes, as time spent waiting for municipal permitting and approval adds considerably to total project costs. Local governments or the state could set limits on the time municipalities can take for those approvals.
- Better funding strategies. Multi-family affordable and workforce housing development typically requires some public funding to be viable. For both multi-family and single-family housing, infrastructure often poses a challenge, including the need to build or modify sewer and water connections. Municipalities could consider using TIF or other funding sources or could create or bolster affordable housing funds.
- New or expanded use of alternative building methods, such as increasing the use of prefabricated housing or expanding the development of attached single-family townhouses.
- Additional public education to raise awareness about the problem. Given the frequency of community opposition to proposed housing developments in general – and affordable housing specifically – stakeholders we interviewed said more public education is needed about the county’s rising housing costs, and how this issue is impacting area employers and the county’s overall economic health.
