Wisconsin housing permits out of step with costs, report shows

Listen to this article

Housing permits in Wisconsin increased during the pandemic but declined and flattened in the last two years.

That’s according to a Wisconsin Policy Forum report following single- and multi-family housing permits and their effect on housing affordability over the last 20 years.

In 2021, there was an uptick of housing permits during the COVID-19 pandemic, but the pace of permitting has fallen in 2022 and was stagnant in 2023, the report showed.

Last year, Wisconsin trailed behind the national average of 4.48 housing units for every 1,000 residents, the state scoring 3.47 units.

Multi-family housing permits were up significantly, while single-family permits increased modestly, the report noted. Because the average size of households in Wisconsin, like the rest of the nation, has declined, there’s been higher demand for smaller units in multi-family structures.

Multi-family permits on average between 2021-23 increased 61.3% on a population-adjusted basis, compared to 21.7% between 2017-19, the report showed.

According to a National Association of Homebuilders survey cited by Harvard University, builders struggled with high interest rates, shortage and cost of labor, price of building materials, availability of lots and difficulty obtaining zoning or permit approvals.

The Wisconsin Policy Forum report showed that while multifamily housing construction stepped up, it might not meet the demand of some communities’ population and household growth.

Data diverges between metro areas

According to the report, eight of Wisconsin’s 10 largest metro areas issued more housing permits per capital in 2021-23 compared to pre-pandemic years. However, Milwaukee and Racine lagged.

Madison came out on top as the lead housing developer, where the metro saw a robust increase in multi-family housing permits but a decrease in single-family permits.

Between 2021-23, multifamily permits were up 77.8% in the Madison area while single-family permits were 4.3% lower than several years ago.

The Milwaukee metro area saw a decline in multi-family housing permits, the report showed. Single-family permitting was flat as well.