UW–Madison Urban Planning Professor Kurt Paulsen said Gov. Tony Evers’ budget proposal to provide incentives to local governments for zoning changes would be an effective tool to bring more affordable housing to the state.
But the chair of the Assembly Local Government Committee, Todd Novak, argued zoning incentives would not make a difference in supporting affordable housing.
“I firmly believe zoning isn’t the issue,” the former Dodgeville mayor said.
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However, another Republican working on housing, Assembly Committee on Housing and Real Estate Chair Rob Brooks, R-Saukville, said “everybody thinks we need to address’’ zoning but said he would like some changes to the governor’s current proposal.
The governor’s proposal would provide $20 million for a pilot program that would provide grants to local municipalities if they enact zoning changes to build more affordable housing.
The changes Evers recommended include reducing minimum lot sizes and setback requirements for existing lots and adopting a neighborhood development ordinance: a set of regulations for a city guiding development, land use and subdivision.
While Evers argued that the pilot program will help the housing crisis, Novak, R-Dodgeville, contended it isn’t what municipalities need. But both he and Brooks said lawmakers plan to have further discussions about housing investment this session.
Addressing affordable housing
The governor justified the proposal in a statement to WisPolitics saying it is important to invest in affordable housing, based on what he has heard from Wisconsin residents.
“I am proud that our budget builds upon our efforts to expand access to affordable housing over the past six years by making sure local communities can get additional resources and support to bolster housing opportunities and infrastructure statewide,” Evers said. “That’s a win-win-win for our families, our workforce, and our state’s economy.”
Paulsen, who researches housing policy, said zoning changes help municipalities develop more housing.
“In order for a municipality to be housing ready, you need the zoning and planning in place,” Paulsen told WisPolitics.
Paulsen said in his research, he’s noticed municipalities with outdated zoning laws, and that it takes time, planning and money for a municipality to develop new zoning laws and comprehensive plans.
“Zoning is a barrier to building housing,” Paulsen said.
He argued that changing zoning paves the way for more development.
“Restrictive zoning stifles housing growth relative to demand,” Paulsen said. He added that relaxing zoning constraints helps developers find more available land.
Novak said there’s no question about the need for affordable housing, but he doesn’t like the governor’s proposed solution.
Novak argued municipalities already have “intense” zoning requirements.
He also said the most significant barriers to changing zoning laws are neighbors and city residents who aren’t interested in bigger developments, not state regulations or lack of finances.
And Novak argued a more significant barrier to more affordable housing, especially in rural areas, is incentivizing developers to invest in communities, given the cost to build.
“The developer has to make some profit,” Novak said.
Finding solutions
Paulsen added he “hopes” the governor’s proposal would work.
“If this process takes time and money, the state can provide those resources,” Paulsen said.
Then, because the proposal is a pilot plan, the state can get feedback from municipalities and try different strategies.
Novak has other ideas to address housing needs in municipalities.
“I think you could do a grant of X amount of dollars max for the community to explore expanding new development and housing, and something like that,” Novak said.
He said then the money could be used to bring in developers, get people to build more houses and expand the housing market.
Novak said he’s open to ideas. He expects housing legislation will come up this session, and would like to take the $20 million the governor proposed to invest in different housing grants. Novak said he would like to have conversations with other legislators and the governor’s office to consider ideas.
Brooks has also been exploring housing solutions. He said he doesn’t mind the governor’s proposal, if it can be adjusted to reward municipalities for adopting zoning changes, instead of giving them money for planning to do so.
“We want to reward good behavior, not good intentions,” Brooks said.
Last session, Evers signed a series of bipartisan bills creating loan programs under the Wisconsin Housing and Economic Development Authority.
The housing bill package from last session allocated over $500 million to addressing housing needs. Brooks said he wouldn’t mind some of that money going to a zoning program similar to what Evers has proposed.
However, Brooks would first like to get a bill through to expand the amount of money WHEDA could grant to developers and local municipalities for housing incentives.
Housing efforts this session
Lawmakers from both parties have introduced a bill this session that would expand some of the programs.
The bill would raise the limit on loans to developers under the Infrastructure Access Program from 20% to 33% of total project costs, and the loan to municipalities from 10% to 25%.
For another loan program to improve workforce housing units, the bill would allow up to $50,000 in loans per dwelling unit or 33% of the total cost, whichever is lower. This is up from $20,000 or 25% of total project costs.
SB 180 will be before the Senate Committee on Insurance, Housing, Rural Issues and Forestry Thursday.
Brooks said he’s optimistic this bill will “sail through,” because he’s seen support from both parties, as well as WHEDA, the Wisconsin Realtors Association and the League of Municipalities.
After that, he’s open to discussing solutions to zoning and considering a pilot program. He wants to get input from communities and those who would be involved. Brooks said he doesn’t think the governor’s proposal has been fully vetted yet and would like to look into options for zoning changes.
“Everybody’s interested in looking at that and realizes that if we’re going to ask communities to increase density, increase the need for fire and police and everything else that we need to somehow help them,” Brooks said. “And the governor’s pilot program is not far off from what we’ve been talking about.”
