PUBLIC POLICY
Tackling the Workforce Housing Shortage Jennifer Sunstrom RANW Government Affairs Director Realtors Association of Northeast Wisconsin
Despite continued record-low unemployment rates, Wisconsin’s economic future still hinges on the ability to retain and attract a skilled workforce to fill existing and future job vacancies. As part of this struggle, Wisconsin employers are finding it increasingly difficult to recruit workers to areas lacking attractive and affordable housing options. With statewide housing inventory levels at historic lows, median home prices continuing to rise, and apartment rent increases outpacing wage growth, Wisconsin’s workforce housing shortage is a growing problem for Wisconsin’s economic success. For that reason, the Wisconsin REALTORS® Association (WRA) commissioned a study, that demonstrates 1) A severe workforce housing shortage does exist in Wisconsin, 2) the primary causes of the shortage, 3) the consequences of the workforce shortage, and 4) how we can take steps to address the problem. The report titled “Falling Behind,” is authored by University of Wisconsin Madison Professor of Urban and Regional Planning, Dr. Kurt Paulsen, Ph.D., AICP.
Three Main Causes of the Workforce Housing Shortage 1. Not building enough homes to keep up with population - Wisconsin is creating about 75 percent fewer lots and 55 percent fewer new housing units than pre-recession levels. In the past two years, fewer than 10,000 buildable housing lots were approved in WI, even though WI usually adds 10,000-20,000 net new households each year. In Outagamie County, from 2006-2017 there were 5,727 new households and 6,245 new housing units. Although Outagamie has not yet joined its neighbor Brown County in actually underproducing housing, it is drawing close with a narrow margin of just 518 units.
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Fox Cities BUSiNESS I Winter 2019 I Public Policy
2. Construction costs outpacing inflation and incomes - In the past seven years, construction costs have risen substantially faster than inflation, and construction companies are facing severe labor shortages in Wisconsin. In the Fox Valley area, from 2010-2017 area builders say that construction costs for single-family homes have risen 15%17%. Unlike home construction costs, development costs (land, engineering, permits, carrying costs, etc.,) can vary from community to community. For this same time period, local developers have seen costs rise approximately 10%-15% depending on the community. 3. Outdated land use regulations limiting supply and significantly driving up the cost of housing - Local regulations that have no public safety purpose, such as large minimum lot sizes, prohibitions on non single-family housing, excessive parking requirements and high-end building materials, and long approval processes are adding substantial costs onto housing.
