Increasing housing inventory was one of the WRA’s top legislative priorities this session, with emphasis on making housing units affordable for entry-level buyers and seniors looking to downsize. Wisconsin research analyst Dale Knapp has noted that Wisconsin faces a significant demand for housing units. By 2030, an estimated 140,000 new housing units are required to meet the demand generated by baby boomers and millennials, the two largest demographic populations in our history. Moreover, when anticipating the additional workforce shortages created by boomer retirements, the projected need for Wisconsin housing units jumps to over 200,000. 

To help bridge this gap between housing supply and demand, the WRA worked with state lawmakers and Gov. Evers to make 
a strategic investment of $525 million in new housing units within the 2023-25 state budget. This investment attempts to address some of the root causes of the shortage, namely the lack of available financing for land development and the need for local regulatory reform. Through financial incentives such as low-interest financing, local governments are incentivized to enact regulatory reform aimed at reducing overall housing costs.

The required regulatory reform affords local governments the flexibility to account for their own unique circumstances, provided that the outcome is housing development affordable to working families, first-time homebuyers and seniors on fixed incomes. 

Creating a statewide, multifaceted housing incentive program is complex and time-consuming, and securing the substantial investment was only the first step toward addressing Wisconsin’s housing shortage.  

Implementation of loans

The second step is aimed at the proper allocation and administration of the funding. The $525 million investment is to be allocated through low-interest loan programs and dispersed to qualifying housing developments to build necessary housing units. 

The Wisconsin Housing and Economic Development Authority (WHEDA) is responsible for implementing and administering the various low-interest loan programs. Each program can be used only for the creation or rehabilitation of workforce housing or senior housing, as determined by the area median income requirements established under the law. Loans can be awarded only to developments located in local communities that have engaged in meaningful regulatory reform that significantly lowers housing costs in their community. WHEDA’s responsibility under the new housing initiative encompasses four key loan programs:  

• Vacancy-to-vitality loan ($100 million in eligible funding): Provides financing for the redevelopment of vacant commercial buildings into new workforce housing and thus assists communities in revitalizing blighted, distressed areas into vibrant, economically sustainable areas.
• Restore main street loan ($100 million): Provides financing for the repair and rehabilitation of residential rental housing above existing buildings with a commercial use on the main floor, which helps preserve the historic character of main streets while fostering economic growth and job creation.
• Infrastructure access loan ($250 million): Provides financing for infrastructure improvements such as roads, utilities and public facilities necessary for housing developments and community revitalization. By enhancing infrastructure, this loan facilitates the expansion of affordable housing and promotes overall community development.
• Home repair and rehab loan ($50 million): Provides financing for essential home repairs and rehabilitation projects for older homes and helps residents maintain safe and decent housing. This loan also preserves property values and fosters neighborhood stability.

WHEDA has made substantial progress, having launched two of the programs in late 2023 and recently announcing the first loan recipients under the Vacancy-to-Vitality Loan Program, awarding approximately $3 million to create over 300 workforce housing units in the state. Anticipated completion of the first round of funding for all programs is set for July 2024.

Through this partnership, the WRA and WHEDA hope to successfully implement the state’s historic investment in housing to help address Wisconsin’s housing needs.  

Tom Larson
WRA President & CEO