{"id":16225,"date":"2025-04-10T20:05:43","date_gmt":"2025-04-10T20:05:43","guid":{"rendered":"https:\/\/wifamily.news\/?p=16225"},"modified":"2025-04-10T21:00:43","modified_gmt":"2025-04-10T21:00:43","slug":"wisconsin-cities-can-grow-if-they-let-housing-markets-work-say-scholars","status":"publish","type":"post","link":"https:\/\/wifamily.news\/?p=16225","title":{"rendered":"Wisconsin cities can grow if they let housing markets work, say scholars"},"content":{"rendered":"

This post originally appeared at https:\/\/www.badgerinstitute.org\/wisconsin-cities-can-grow-if-they-let-housing-markets-work-say-scholars\/<\/a><\/p>\n

Study from AEI calculates more than 21,000 new homes a year from permitting economically feasible urban infill<\/strong><\/em><\/h4>\n

Concerned that exorbitant housing<\/a> is out of reach<\/a> for middle-class families<\/a>, cities without developable green-field sites could ease the squeeze by allowing more market-driven urban infill, say scholars at the American Enterprise Institute.<\/p>\n

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\u201cWhy is housing so expensive?\u201d asks Ed Pinto, co-director of the Housing Center at AEI in\u00a0 Washington, D.C. It\u2019s because, he says, costly housing is all that most cities will allow a developer to build, even inside urban areas.<\/p>\n

The AEI scholars have modeled three options for infill development in Wisconsin urban areas that, they calculate, could mean more than 21,000 new homes per year in the state, all without government subsidies or mandates.<\/p>\n

\u201cThe point is that you have to allow things that are economically viable,\u201d said Pinto.<\/p>\n

One option is to allow people with a house on a lot to build an accessory dwelling unit \u2014 also called a \u201cgranny flat\u201d or an \u201cin-law suite,\u201d either attached to the back of the house or as a separate building. AEI\u2019s model, which uses the actual house prices and sizes of existing lots in Wisconsin cities, reckons that perhaps as many as 5,100 such units would make economic sense per year.<\/p>\n

Another option recognizes the fact that many old houses are on large lots in or near cities where the value of land has now outpaced that of the house. In some cases, the land value constitutes 60% or more of the total value, much higher than 30% that lenders and builders regard as a rule of thumb. For some houses, the AEI model calculates, it makes more sense for a homeowner who is looking to sell to subdivide the lot into several city-sized lots, each with a single-family home.<\/p>\n

Pinto\u2019s team calculates that if such an option were available in all the places in Wisconsin where\u00a0 it makes economic sense, it could mean as many as 6,500 new houses annually, if cities permitted it. Often they don\u2019t, in part because neighbors want to keep the look of their surroundings intact.<\/p>\n

But, wrote Pinto and colleagues in a 2022 book<\/a> explaining their \u201clight-touch density\u201d concepts, \u201cPreventing change in a neighborhood is generally impossible. If land use regulations prevent the built form from changing, the neighborhood community will change nonetheless,\u201d as homeowners age and leave. The main alternative to subdividing an expensive large lot, he points out, is a teardown of the 1950s ranch and its replacement with a \u201cMcMansion,\u201d much larger and out of character with the neighbors anyway.<\/p>\n

\u201cNobody would put a $600,000 structure on a million-dollar lot,\u201d he says. \u201cIt would be uneconomical the day it was built,\u201d and so lenders would balk.<\/p>\n

His team includes a map of census tracts in Wisconsin where existing land and home values make the neighborhood especially vulnerable to McMansions. One part of Madison near Lake Wingra has, by AEI\u2019s calculation, 168 houses vulnerable to such replacement when sold; four already have been replaced by much larger, costlier houses. Teardowns may pencil out, but they change a neighborhood \u2014 and, Pinto points out, don\u2019t provide much new housing.<\/p>\n

A third option, what Pinto dubs \u201clivable urban villages,\u201d involves simply making it always permissible to add residential use, including single-family home, duplexes, and larger apartment buildings, in existing commercial or industrial districts of a city. The idea is to permit the free market to find the next example of what has happened to Milwaukee\u2019s Third Ward. This could lead to as many as 10,000 new homes annually.<\/p>\n

\u201cWe\u2019re not saying you have to building housing there,\u201d Pinto says. \u201cBut if someone comes along and says, \u2018Wait a minute \u2014 I believe that parcel\u2019s highest and best use is housing,\u2019 and wants to build housing, let them, simple as that, by right.\u201d<\/p>\n

\u201cBy right\u201d means that, once zoning and other building rules for a parcel are set into code, developers need no more permission for a project. It\u2019s important, says Pinto, to giving builders some certainty of a project going forward once they\u2019ve committed money to planning it.<\/p>\n

The three urban options are in addition to the biggest suggestion in AEI\u2019s playbook for Wisconsin, letting builders offer smaller lots on green-field sites<\/a>. That idea \u2014 allowing mostly single-family homes at about 6 homes per acre instead of the 3.5 per acre that Wisconsin has averaged since 2000, along with some townhouse-style single-family homes \u2014 could mean about 31,000 additional homes a year on no more land than we\u2019re currently using for development.<\/p>\n

Patrick McIlheran is the Director of Policy at the Badger Institute.<\/em>\u00a0<\/p>\n

Any\u202fuse or reproduction of Badger Institute articles or photographs requires prior written\u202fpermission.\u202fTo request permission to post articles on a website or print copies for distribution, contact Badger Institute President Mike Nichols at\u202f<\/em>mike@badgerinstitute.org<\/em><\/a>\u202for 262-389-8239.<\/em><\/p>\n

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