MON AM News: Residential construction lagging population growth in Madison; Water Council enters agreement for new workforce center in Milwaukee

September 9, 2024

— Residential construction in Madison is struggling to keep housing affordable for its expanding population, a city planning official says.

Matt Wachter, director of planning and community and economic development for the city, recently discussed affordable housing efforts during a meeting of the Rotary Club of Madison.

Madison’s annual population growth rate rose to near 2% during the pandemic years of 2019 to 2021, he said, doubling its typical rate of 1% growth seen for the previous 60 years or so.

“Overwhelmingly we’re importing people aged 18 to 30, coming to work at Epic, at Exact Sciences … This is a natural renter population,” he said. “So a lot of this pressure is falling onto our rental market.”

To meet the housing demand of an additional 2,200 or so households per year, “we need to add that many units,” he said. But most years, Madison is only just hitting that number or falling below it, with the exception of 2021 when many projects that were previously delayed during the pandemic got started, driving the number of building permits above 3,500.

“So, we are barely able to keep up on the construction side with our growth as a community,” Wachter said.

As a result of demand outstripping supply, the city’s vacancy rate stays between 2% and 3%, one of the lowest among major U.S. cities, he said. That trend results in people who are financially unstable being “squeezed out” of the market, even as rental prices are driven upward.

On a per-square-foot basis, rent has risen from under $1.45 in 2018 to above $1.75 this year, according to Wachter.

“If you make 80% or more of our median income, the market can deliver housing for you without too much problem,” he said. “If you’re making 50% to 60% of our median income, there might be existing older housing stock … that serves you. But .. if you’re making 30% of our median income, the market just can’t deliver for you.”

Even when taking students out of the equation — since they typically don’t earn any money but still pay rent — “we still have a very significant problem” with housing affordability, he said.

In hopes of addressing these concerns, the city has undertaken several projects, including creating the Affordable Housing Fund that’s grown to $20 million in funding, establishing a land banking fund, adding “height bonuses” to reward developers creating large affordable housing buildings and more.

Nicole Solheim, vice president of development for the nonprofit Cinnaire and plan commissioner for the city’s Plan Commission, said the land banking fund has been “really important” for ensuring the long process for advancing an affordable housing project can be brought to fruition.

“If the city can, you know, hold onto land and give us that flexibility, that’s really helpful,” she said during the Rotary meeting.

Over the past 10 years, Madison has gone from building 10 to 15 new affordable housing units per year to up to 300 units per year due Affordable Housing Fund developments, Wachter said.

“In a decade, we’ve delivered roughly 2,000 units of affordable housing and we have a lot more in the pipeline just in the last year or two,” he said. “And this housing is really all over the city, but where it mostly is, we’re putting it along transit routes so people who live in these properties have access to our new bus rapid transit system.”

While the effects of rising interest rates and supply chain shocks are outside the scope of local control, he noted elements of the city’s regulatory environment “make it harder or slower to build things.” Solheim highlighted efforts to improve that environment for those looking to create more affordable housing.

The city has altered its zoning rules to allow for more types of housing and mixed-use developments, as well as supporting more “accessory dwelling units” — small, independent residential units located on the same lot as a separate single-family home.

Solheim spotlighted efforts to improve equity in the planning process for various Madison neighborhoods, which guarantees select areas are guaranteed to have an updated plan every 10 years.

“One thing on its own is not going to solve our affordable housing crisis,” she said. “Together, they will have an impact. It’s about allowing incremental density throughout our entire city, including in single-family neighborhoods.”

Watch the video.

— The Water Council has announced plans for a Water & Wastewater Workforce Center in Milwaukee, developed through an agreement with Boston-based Veolia North America.

Leaders of the two organizations last week signed onto the partnership, which is aimed at bolstering the local water industry workforce and developing technologies around water and energy.

The effort is meant to support a Water Council-led consortium called the Water + Energy Forward Engine, which got $1 million in National Science Foundation funding last year to develop a “regional innovation engine.” Partners in the effort are currently seeking a further award of up to $160 million over 10 years to advance this concept, according to the release.

Veolia will work with the Water Council and W+E Forward members on research and development focused on new approaches for wastewater management, new ways to capture energy from waste streams such as biogas, more efficient energy management and more.

The company already has a relationship with the Milwaukee Metropolitan Sewerage District, operating and maintaining its regional wastewater treatment system that covers 29 municipalities with more than 1 million residents.

Dean Amhaus, president and CEO of the Water Council, says the company’s work with MMSD is a key reason why Milwaukee is known as a “world water hub.”

“We’re proud to deepen our relationship with VNA and collaborate on the critical issues of workforce and water technology,” he said in a statement.

Through the agreement, VNA Chief Sustainability Officer Dave Ross will join the leadership team for W+E Forward, which also includes members such as Rockwell Automation, Microsoft, the MKE Tech Hub Coalition, Marquette University, UW-Madison, UW-Milwaukee and others.

See the release.

— The Lafayette Ag Stewardship Alliance is touting results from a farmer-led sustainability project, which helped participating farmers reduce erosion and use less energy over a five-year period.

Through a partnership with Farmers for Sustainable Food, this group of 15 farms has been assessing sustainability measures aimed at protecting local waters. These member farmers manage more than 40,000 acres, where efforts have shown “consistent, positive progress,” the group says.

LASA President Jim Winn says farmers are “always challenging ourselves to do better” as stewards of the environment.

“This project demonstrates that commitment and represents a significant milestone for our group in our ongoing sustainability efforts,” he said in a statement.

Participating farms use at least two conservation practices on average for each field under the project, ranging from grassed waterways to cover crops, reduced tillage and no-till farming. Across the project area, 83% of the land has reduced the risk of “excessive” nitrogen loss to subsurface water, reducing the harmful effects of too much nitrogen leaching into the environment such as toxic algae blooms.

The group reports average soil erosion for corn grain over the project period was 1.7 tons per acre per year, below the state benchmark of 3.5 tons for this crop.

Meanwhile, energy use was 53% lower than the national standard, according to the report.

See the release and listen to an earlier podcast with Lauren Brey, managing director for Farmers for Sustainable Food.

— Total assets at state-chartered banks in Wisconsin reached $68 billion at the end of the second quarter, marking an increase of $1.2 billion from the same point in 2023.

Meanwhile, State-chartered credit unions in Wisconsin reported total assets of $65.7 billion at the end of the second quarter — a $1.6 billion increase from the end of 2023.

The state Department of Financial Institutions on Friday released figures showing a “sound financial performance” for both banks and credit unions through this period.

DFI Secretary Cheryll Olson-Collins says financial indicators show “solid net worth, strong growth in assets” and marginal loan growth for credit unions.

“Higher interest rates have slowed lending, but loan to share ratios continue to be strong,” she said in the release. “Overall, Wisconsin’s state-chartered credit unions continue to be financially stable with a positive outlook.”

Olson-Collins notes banks “remain resilient,” though she pointed to ongoing economic uncertainty surrounding the financial sector.

“Despite this, favorable capital ratios combined with solid earnings and liquidity metrics continue to provide stability to the state and our local communities,” she said.

See the figures for banks and credit unions.

Top headlines from the Health Care Report…

— Marshfield Clinic Health System has placed 43 naloxone overdose reversal kits in communities across four Wisconsin counties, the health system announced.

Meanwhile, COVID-19 activity in Wisconsin has continued to creep upward over the past several months, with nearly a third of reporting wastewater treatment facilities seeing “very high” levels of the virus.

For more of the most relevant health care news, reports on groundbreaking research in Wisconsin, links to top stories and more, sign up today for the free daily Health Care Report from WisPolitics and WisBusiness.com.

Sign up here.

— In a recent GOP radio address, Sen. Rob Cowles says the start of Packers football season will create statewide economic revenue.

The Green Bay Republican says the season will send “fans blitzing into grocery stores, restaurants and taverns across the state over the next four months.” He says this will create $15 million in statewide economic revenue per home game.

Cowles says the 2025 NFL Draft, set to be held at Lambeau Field in April, will further grow Wisconsin’s economy. He says the draft will “bring nearly $100 million to Wisconsin’s economy, $20 million of which will stay in northeast Wisconsin.”

“In the Legislature, I was happy to secure $2 million in funding to help the league officials and local law enforcement provide security and operations support for the draft,” Cowles says.

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