Housing industry experts praised Washington County’s Next Generation Housing initiative that aims to stimulate the development of more affordable owner-occupied homes in the county, but added there are additional factors that need addressing in order to add more units to a market that has extremely limited supply.
County officials note that, over the last few decades, housing costs have increased significantly, making it difficult for younger people to purchase their first home.
“The main problem in (the first-time homebuyer) price point is that there are no homes available,” said Josh Schoemann, Washington County executive and the one spearheading the NGH initiative.
The Milwaukee metro area needs 6,000 listings of homes for sale to meet demand, but there are only about 2,500 currently on the market, said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors. The market is even tighter for homes priced under $400,000, and starter homes seem like a rarity in the region.
“Unfortunately, there’s no single arrow that’s going to slay the dragon,” Ruzicka said.
One recent morning, Schoemann saw 10 homes listed in that price range. But by 11 a.m., a local realtor informed him that number had already dipped down to just four. Business leaders frequently tell Schoemann about their difficulties in finding enough workers, and one part of the problem is the lack of housing options for people they want to employ.
NGH launched in October 2021 with the goal of creating 1,000 new owner-occupied dwelling units with 75% sold for less than $300,000 and 25% sold for less than $400,000. The initiative has the backing of numerous municipalities within the county, along with business groups, lenders, realtors and nonprofit organizations.
The NGH coalition identified a handful of key housing barriers: high development costs (including land and infrastructure), mortgage costs, zoning restrictions, public skepticism of new projects and an unfamiliarity in the buying process among would-be homebuyers.
With its total budget of $10 million, NGH has $6.75 million to facilitate three pilot developments, a $2.5 million down payment program for buyers and $750,000 for costs to help kickstart housing projects in local communities. Pilot development funding will go toward planning services, building new infrastructure, permitting and developer incentives, among other things.
One pilot project, The Oaks of Jackson, recently broke ground in the village of Jackson. The 20-acre subdivision will create 101 new units. Plans call for 53 single-family homes, four duplexes and 40 townhouse-style units, said Jen Keller, Jackson village administrator.
Infrastructure work is slated to be complete by the fall. The village is working with builders that expressed interest in building the homes, with the goal of finalizing development agreements by August to sell the village-owned lots, said Keller. Construction could begin in October with some homes occupied as early as April next year.
“We’re hoping in the next 12 months to be handing keys to new homeowners,” Schoemann said.
But there are numerous factors outside the scope of NGH that impede the construction of new, affordable housing in both the metro area and the entire country. Brad Boycks, executive director of the Wisconsin Builders Association, said one of the top issues he hears most frequently from members is local regulation. Things like impact fees, minimum lot sizes and street and sidewalk width requirements make it more difficult and expensive to build homes.
“WBA and its members are obviously supportive of any group or local unit of government that is trying to do creative things to bring more housing, especially workforce housing options, to people who reside in those areas,” Boycks said.
Other impediments include the inflating cost of building materials and labor. Boycks said it seems that as soon as pricing increases moderate for one building material, another one will shoot up.
Another is the pushback that many residential projects face from residents. Housing experts cited NIMBYism (short for “not in my backyard”) as a massive, continuous impediment to new residential projects.
Developers know well the frustration of crafting residential development plans in an area that a municipality identifies in their long-range plans for new housing, only for those plans to be met with stiff resistance at public hearings, said GMAR’s Ruzicka.
“When things get to the plan commission, it’s like they’re running into sand,” he said.
Boycks and Ruzicka said they support proposals in the state Legislature that would make it easier for housing projects to win approval at the local level. The legislation would require communities to issue building permits on residential projects that meet existing local requirements, and limit their ability to require supermajority approval on zoning changes.
But the solution to NIMBYism is not a government mandate, Schoemann contended, while not addressing specific state legislation. Rather, local leaders must convince residents as to why more residential projects are needed in their communities through open, honest dialogue, he said.
Schoemann said when speaking with constituents about the need for new housing, he asks them to think back on their first home buying experience. He asks for details such as the size of their lot and home, the cost of their mortgage and what job or jobs were they working to pay that mortgage. This exercise helps them reflect on the type of home a younger or first-time buyer needs, and realize how out of sync supply and demand are for those housing options.
“Once you do that with somebody, what I’ve found is that those barriers of NIMBYism start to fade,” he said. “They find themselves in the shoes of (younger, first-time homebuyers) and go, ‘Oh yeah, I guess I do remember.’”
