The regional housing plan recommends the development and maintenance of affordable housing throughout the Southeastern Wisconsin Region. The commercial housing market provides many housing options for households with higher incomes. The plan therefore focuses on the need for affordable housing for low- and moderate-income households, and on the need to provide conveniently located housing affordable to people employed at major job (economic activity) centers throughout the Region. Affordable housing is defined as housing that costs no more than 30 percent of a household’s monthly income, which is the standard used by the U.S. Department of Housing and Urban Development (HUD) and by banks when evaluating applications for mortgage loans.
Many plan recommendations are directed to communities with sanitary sewer service, since the majority of services and jobs are located in areas with sanitary sewer service. Sewer service is also necessary to accommodate multi-family and higher-density single- and two-family development, which is typically more affordable than single-family housing on larger lots. Recommendations for providing housing that is affordable to people holding jobs in a community are summarized under the Job/Housing Balance section.
The regional housing plan includes the following recommendations to help increase the supply of affordable market-rate (non-subsidized) housing in the Region:
Community Planning and Zoning
Although market-rate housing is, by definition, provided by the private sector, zoning and other regulations enforced by counties, cities, villages, and towns affect the cost of housing development and therefore the price paid by consumers who purchase or rent the housing. The housing plan includes several recommendations directed to county and local governments which could facilitate the development of housing that would be more affordable to lower- and moderate-income households, and at the same time maintain public health, safety, and environmental standards.
The plan recommends that all communities with sewer service designate in their comprehensive plans at least some portion of the community for modest multi-family housing (a density of at least 10 housing units per acre, with minimum floor area requirements no greater than about 800 square feet for two-bedroom apartments), and for modest single- and two-family homes (a density equivalent to one home per 10,000 square feet or less, with minimum floor area requirements no greater than about 1,200 square feet). Through analyses conducted as part of the housing plan, it was determined that market-rate multi-family housing with these characteristics would be affordable to lower-income households with incomes between 50 and 80 percent of the Region median income, or about $27,000 to $43,000 per year. Modest single- and two-family housing would be affordable to moderate-income households (households with incomes between 80 and 135 percent of the Region median income, or about $43,000 to $72,000 per year). Numerous housing options are available to households with incomes of more than $72,000 per year. Recommendations for providing housing for households with incomes less than 50 percent of the Region median income are summarized under the Subsidized and Tax Credit Housing section.
The plan also recommends that sewered communities include flexible zoning districts in their zoning ordinances such as planned unit development (PUD), traditional neighborhood development (TND), and density bonuses for affordable housing. The use of flexible zoning districts may allow smaller home and lot sizes than the underlying zoning district; and potentially common open space and shared parking. The plan also recommends that communities prepare neighborhood plans to provide for a variety of housing types and densities/lot sizes, and therefore housing costs, within neighborhoods with shopping, parks, and other local services conveniently located to residents.
The plan also includes recommendations appropriate for implementation by all local governments, including those without sewer service. Recommendations include:
Allowing accessory dwelling units in single-family zoning districts;
Limiting zoning and subdivision ordinance requirements for home sizes larger than 1,200 square feet;
Limiting zoning ordinance requirements for higher-cost façade materials such as brick and stone;
Limiting requirements for extensive and/or higher-cost landscaping materials;
A review of site improvement standards to determine if changes could be made to reduce the cost of housing without compromising the safety or aesthetic quality of new development, with particular attention given to street width requirements.
Property Taxes and Impact Fees
Funding for schools and local services (street maintenance and fire and police protection, for example) is derived primarily through local property taxes and State aid. In some cases, local government approvals of proposed housing developments may be based on a preference for higher-priced housing that will pay more in property taxes to help fund local services. In order to address the issue of local preference for higher-cost rather than more modest housing, the regional housing plan recommends that the Governor and State legislature establish a Task Force to study and develop strategies for alternatives to the property tax for funding schools and local government services.
The plan also recommends that local governments consider reducing or waiving impact fees for lower-cost housing, which is permitted under Section 66.0617(7) of the Statutes. To help offset the cost of providing services to serve new residents of low-cost housing, the plan recommends that limits on State revenue caps be refined to provide an exception to such caps when impact fees are reduced or waived.
Older, existing homes are often more affordable than newer homes in a community, and are an important source of lower- and moderate-cost housing. To help maintain the existing supply of affordable housing, the plan recommends that local governments adopt property maintenance regulations and invest in the maintenance of infrastructure necessary to keep established neighborhoods strong. In recognition that in many cases existing residents lack the financial resources to make needed home repairs, the plan recommends that programs be established to provide grants and loans for repairs and improvements. Examples include property weatherization and lead paint abatement programs and use of Community Development Block Grant (CDBG) funding.
Incentives for Affordable Housing
Communities with Tax Increment Financing (TIF) authority, primarily cities and villages, have authority under current State law (Section 66.1105(6)(g) of the Statutes) to extend the life of an existing TIF district for one additional year, provided the proceeds from the TIF are used to provide affordable housing in the community. The plan recommends that communities consider taking advantage of this funding mechanism to develop affordable housing.
The plan also recommends that the State fund the Smart Growth Dividend Aid Program enacted as part of Wisconsin’s comprehensive planning law in 1999. Under this program, a city, village, town, or county could receive one aid credit for each new housing unit sold or rented on lots that are no more than one-quarter acre, in the year before the year in which the grant application is made. A city, village, town, or county could also receive one credit for each new housing unit sold at 80 percent of the median sales price for new homes in the county in which the city, village, or town is located. The program is part of State law, but has not been funded.
The national economic recession and related housing crisis that began in 2007 resulted in foreclosures and abandoned homes in portions of many communities in the Region, reduced home values, and led to credit restrictions for builders and households seeking financing to develop or purchase housing. To help address these issues, the plan recommends that State and Federal governments work cooperatively with private partners to provide a housing finance system that includes private, Federal, and State sources of housing capital; offers a reasonable menu of sound mortgage products for both single- and multi-family housing that is governed by prudent underwriting standards and adequate oversight and regulation; and provides a Federal guarantee to ensure that 30-year, fixed-rate mortgages are available at reasonable interest rates and terms.