Wisconsin Republicans introduce bills to increase supply of affordable housing

Homes built by Tom McHugh Construction stand in Kaukauna. McHugh has been building modest-sized homes — and would like to go even smaller — but local laws and property restrictions make that difficult. State lawmakers are now proposing a series of bills to relax certain zoning rules, provide tax exemptions and clear away other barriers to the construction of workforce-housing projects. (Wm. Glasheen/Appleton Post-Crescent)

Lawmakers introduced a series of bills Thursday to relax certain zoning rules and provide tax exemptions and loans — all to increase the supply of affordable housing in Wisconsin.

Legislative Republicans announced the proposals during a press conference Thursday at the state Capitol. If adopted, the bills would require municipalities to relax their zoning rules to ease the way forward for affordable housing, offer a tax break for building materials and set up loan programs and investment funds to encourage both municipalities to develop more workforce housing and homeowners to improve their properties.

The proposals come as Wisconsin deals with a lack of so-called workforce housing — or affordable housing found near places of employment. For the past several years, rents have been rising faster than incomes in Wisconsin.

Construction costs have meanwhile also been rising steadily, and Wisconsin has had a lower homeownership rate among those aged 25 to 34 and those aged 35 to 44 than any of its neighboring states except Illinois.

“Unfortunately these trends have made it a challenge for Wisconsin to be an attractive destination for workers and businesses alike,” said Rep. Rob Summerfield, R-Bloomer, chairman of the state Assembly Committee on Housing and Real Estate.

Among other things, the bills announced by Republicans on Thursday would:

Make zoning changes to support housing

One proposal would require local governments to remove barriers to affordable housing projects by mandating that most municipalities provide at least one district where multifamily-housing projects of at least 16 units per acre are allowed. The bill would also require cities and towns to allow housing of that density in any commercial district, with some exceptions.

Direct COVID aid to workforce housing 

Another bill would require local governments to use money they are receiving in the form of federal COVID-19 aid for workforce-housing projects. Cities and towns would be required to use $1 million, or 10% of the money they are receiving federal stimulus legislation, on new infrastructure to support workforce housing, a loan program to support housing projects or plans to turn shopping malls and similar commercial properties into affordable housing.

Provide loans for housing rehab projects 

Still another proposal would direct the Wisconsin Housing and Economic Development Agency to set up a low- or no-interest loan program to help homeowners finance structural improvements to their properties or remove lead paint. The program would be on offer to homeowners who earn less than 120% of the county’s median income or who plan to improve a house built before 1980.

Offer tax exemption for building materials

One bill would offer a sales-and-use-tax exemption for building materials used on any new workforce-housing project. The tax exemption would apply to building materials, landscaping, equipment or other goods and services. The bill would allow the credits to go only to developers who have first obtained a certificate from the Wisconsin Housing and Economic Development Agency certifying that their project is truly a workforce-housing development. The tax exemption wouldn’t apply to the construction of sidewalks, wastewater systems or other property for public use.

Set up a local housing-investment fund

A separate proposal would allow local governments to set up a housing-investment fund enabling municipalities to divert tax revenue from certain properties into new affordable-housing projects. Local governments could designate an undeveloped or underused property set aside for a housing project as a housing-investment-fund property, then divert any increase in property-tax revenue stemming from that property into an investment fund.

Create a ‘shovel ready’ designation

This proposal would let Wisconsin Economic Development Corp. classify certain residential real estate projects as “shovel-ready.” The designation could apply only to sites that are properly zoned, have any needed permits and utilities in place and are in compliance with various other criteria. Government agencies would then be required expedite the approval of any projects planned for these sites.