MADISON (WKOW) — A new study from the Wisconsin Realtors Association indicates that while more people are flocking to the state for jobs, the housing availability has not kept up with the workforce increases.
The author of the study, Kurt Paulsen, noted that the number of building permits and new housing lots never came back up after the Great Recession nearly a decade ago.
“Our fastest-growing counties, such as Dane, Brown and Waukesha, have collectively under-produced 15,000 housing units in the past decade,” Paulsen wrote.
Beyond not building enough homes to keep up with population and income growth, the study also reasons that rising construction costs have outpaced inflation and incomes. An increase in material prices and a labor shortage in the building and construction trades have influenced these costs, making home affordability more difficult for people in the state.
Finally, he said outdated land use regulations have also driven up the cost of housing.
Because of these factors, Paulsen concluded that housing costs continue to rise, fewer people are deciding to own homes, and housing affordability is on the decline.
In fact, the study showed that many lower-income homeowners are paying more than 50 percent of their income on housing.
Madison’s mayor, Satya Rhodes-Conway, said last Tuesday in her budget address that she is hoping to make housing affordability a priority in Madison.
“As Madison grows,” she said, “The landscape of our housing market and neighborhoods has also changed.”
Despite a rise in multi-family unit development over the past 10 years to accommodate the thousands of people who are renting in the city, the vacancy rate has dropped sharply from 5.6 percent to 2.8 percent.
Rhodes-Conway said that rate is “contributing to the lack of affordability that we see in the rental market.”
She proposed several investments in affordable housing including creating a new fund to make money available to buy land for affordable housing units, as well as increasing the money going to the affordable housing program from $4.5 million to $5 million annually.
Paulsen presented solutions to the housing shortage in his study, which included appealing to lawmakers to make some bipartisan changes. He plans to testify Monday before the State Assembly’s Committee on Housing and Real Estate to talk about the challenge.