Wisconsin lawmakers hope to build on major bipartisan legislation passed two years ago to tackle the state’s housing affordability crisis.

The state Senate is now considering a broad package of bills that the state Assembly passed in early October. If signed into law, Wisconsin would join other states like California, Washington, Colorado, and Oregon, which have passed new laws over several years to ease housing development.

In Wisconsin, however, the latest effort is facing a more challenging road. Bipartisanship is proving elusive for the Republican-authored bills, which supporters say address the “missing middle” of the market. While some bills passed with bipartisan support, the overall package faced criticism from Democrats who argued that Republicans had abandoned bipartisan negotiations.

When I refer to affordable housing, I want to be clear, we’re not talking about subsidized housing,” Republican State Rep. Rob Brooks, a real estate broker who is championing the bills, said during a late September news conference. “What I’m talking about is the housing stock that was built just a generation or two ago. We’re talking about small ranch homes, bungalow homes.”

The legislative push comes as home values in Wisconsin have risen considerably. Through September, average home values statewide have increased 117% over the previous decade, according to data from the Wisconsin Realtors Association. Data from the Wisconsin Policy Forum shows that household incomes haven’t grown at nearly the same pace.

Laying the Groundwork

In June 2023, Wisconsin Governor Tony Evers signed a package of five bipartisan bills representing what was called “the biggest investment in housing in Wisconsin history.”

These laws, which allocated $525 million from the state's budget surplus, were designed to expand affordable workforce housing options by creating several new loan programs and enacting regulatory reforms.

The 2023 bipartisan package included the following key pieces of legislation:

• Residential Housing Infrastructure Loans: This act created a $275 million revolving loan fund to help developers cover the costs of public infrastructure—such as streets, water, and sewer lines—for new workforce or senior housing projects. To receive a loan, developers must work with a local government that has implemented measures to reduce housing costs.
• Main Street Housing Rehabilitation: This law established a revolving loan program to help owners of rental housing, both single-family and multifamily, to maintain or restore their properties to safe and sanitary conditions.
• Regulatory Reform: Aimed at streamlining the approval process for new housing, this act limited the ability of opponents to stop or delay housing developments. It also standardized zoning change approvals to a simple majority vote and restricted who could challenge local government approvals of projects.
• Workforce Housing Rehabilitation Program Modifications: This law modified an existing loan program to make it easier for homeowners to access funds for rehabilitating their properties. It expanded eligible rehabilitation activities to include the removal of environmental hazards like lead paint and asbestos, as well as repairs to floors, walls, and plumbing systems.
• Commercial-to-Housing Conversion: This act created a revolving loan fund to provide developers with financing to convert vacant commercial buildings into workforce or senior housing. The new residential housing must consist of 16 or more dwelling units.

These laws were intended to address Wisconsin’s housing shortage by providing low- or zero-interest loans for various types of housing projects and by reducing regulatory hurdles that can increase development costs. The legislation defined “workforce housing” as housing that costs no more than 30% of a household’s income, with specific income limits tied to the county’s median income.

Building on the Work

A central piece of the new legislative effort is a proposal to create a statewide framework for accessory dwelling units. The measure would allow property owners to build smaller, secondary homes on lots with single-family houses, overriding the current patchwork of local regulations.

In the past decade, we have seen median home prices in Wisconsin double due to the low number of housing units being built,” Republican State Rep. Alex Dallman said in a statement when the bills passed. “This package of bills will help alleviate rising costs for first-time homebuyers, increase the housing supply, and remove local red tape that slows down development.”

To ensure the units contribute to the housing stock rather than tourism, any newly created ADU could not be used as a short-term rental—a provision that drew concern from the state’s largest business lobby.

To encourage homeownership, another bill establishes a starter home loan program. This would create a revolving loan fund of $10 million to provide first-time homebuyers with zero-percent-interest second-mortgage loans of up to $60,000. A separate proposal would establish a grant program to assist property owners in converting multifamily rental buildings into condominiums, offering up to $50,000 per parcel to offset conversion costs.

The package also includes provisions for mandatory rezoning for specific residential development requests and an exemption from compliance with a newly promulgated commercial building code for building projects already in progress, a move designed to prevent costly delays.

Cracks in Bipartisanship

While the 2023 effort was marked by cooperation, the new package faces a more divided legislature.

These bills were half-baked last week, and despite a number of recommendations and amendments, they are still not fully cooked,” State Rep. Kalan Haywood, a Milwaukee Democrat, said during floor debate.

One contentious moment came when an amendment from Rep. Ryan Clancy, another Milwaukee Democrat, to allow housing cooperatives to participate in the condominium conversion program failed. Clancy still voted for the bill but said during the debate:

It is so disappointing to have to do that because we had something better in front of us.”

Industry groups like the Wisconsin Realtors Association and the Wisconsin Builders Association support the housing bills. However, they must still clear the state Senate, which has not convened since July.

Success will depend on navigating the political divisions that have emerged since last year’s bipartisan efforts.