Renters and buyers face increasing anxiety amid Wisconsin's looming housing crisis

Posted at 12:31 PM, Apr 23, 2024
and last updated 2024-04-23 13:31:44-04

MILWAUKEE — Skyrocketing housing prices in the state are outpacing incomes. The imbalance is tied to concerns that the dream of home ownership is slipping farther away and that renters are increasingly strained.

We are looking at housing affordability issues across the state, from Kenosha to Sheboygan.

"For years and years, when I had my own apartment, I used to make it a point to live around here," said Tonya Ebert wistfully as she walked along the Kenosha lakefront.

Tonya Ebert
Tonya Ebert

Tonya works as a home health aide. She says it's a career that provides a purpose — but not a big enough paycheck. "I've been there for almost 16 years and I kind of had to beg to get the $13 an hour I'm making now," she explained.

Despite donating plasma on the side, Tonya got to a point where she couldn't afford rent. Her solution was to move in with family members. "It's so crowded that we really need another place that's bigger, but there's nothing out there. There's nothing that's affordable," she added.

Tonya and her family are trying to avoid becoming rent-burdened. "Which means they're spending more than their recommended amount of income on rent," explained Joe Peterangelo, a senior researcher at the Wisconsin Policy Forum. "That has started to tick back up in the last couple of years."

Joe Peterangelo
Joe Peterangelo

According to Peterangelo, in the last five years, rental prices in the state rose roughly 20% while the median price of homes for sale shot up by 50%.

"The scale of the increase in prices is dramatic," he said while pointing out that the research shows incomes grew just 19% in that same 5-year period.

Peterangelo says the disparity is linked to housing demand. "We're talking tens of thousands of units we're short."

Jessica Hinnawi, a Milwaukee area realtor says affordability, inventory, and mortgage rates are the biggest hurdles her clients are facing right now.

Jessica Hinnawi
Jessica Hinnawi

She says, one way home buyers can save is to ask the seller for an interest-rate buy-down. That can drop your monthly payment for a few years, in hopes that interest rates will eventually fall. "It's important to know that the average mortgage rate is about 7.5% like the last 30 years or something," she explained. "So, really, we were spoiled with the 2.5% and 3%."

But she says for many of her buyers, borrowing isn't the roadblock — it's beating out baby boomers. "They are all ready to retire and looking for smaller homes and the millennials are in that age right now where they're all getting married or having children and looking to buy homes. So that's why there's kind of this fight over who's going to get these smaller-sized affordable homes, or once more affordable homes," she explained.

And as home prices outpace incomes across the state it's impacting the workforce. "Is there enough housing? Is there housing that our employees can afford? It is an issue that employers are becoming more and more concerned about," said Peterangelo.

That's true in Sheboygan County where around 2,000 full-time jobs are currently open.

"We've known at Sargento for many years that affordable housing in our community has been a real challenge," acknowledged Portia Young, Sargento's director of public relations.

Portia Young
Portia Young

A new neighborhood in Sheboygan Falls could be the answer. Brand new homes are being sold at cost and come with $65,000 in down payment assistance.

Jordan Lubach just purchased a home and says, at first, it sounded too good to be true. "Knowing that a brand new home in this current market was only going to be $250,000 was attractive," he added.

Jordan Lubach
Jordan Lubach

Jordan said he'd been trying to buy a home for five years. "I put offers on so many homes...$10,000 or $20,000 over asking and I still wasn't able to get a home," he recalled.

It's why Sargento and three other major employers, Masters Gallery, Kohler, and Johnsonville, each gave $2 million to the fund that powers the Sheboygan Falls housing project. Sheboygan County added $2 million of its own in ARPA funding, hoping to help grow the workforce.

"We are hiring for maintenance positions, we are hiring for CDL truck drivers," said Young. When asked if these are jobs that would allow families to move into the Founders' Pointe Subdivision she said yes, explaining that "Sargento averages about $26 an hour for our operations entry-level positions."

To qualify for this Sheboygan County housing initiative home buyers can not be earning more than 140% of the median income in Sheboygan County which sets the limit at $134,474.

"To our knowledge, there isn't anything like it in the country where public and private come together to do something like this," said Don Hammond, chair of the Sheboygan County Economic Development Corporation.

Don Hammond
Don Hammond

The goal is to build up to 500 homes over the next several years, focusing next on areas like Plymouth and Sheboygan. "Had we not done this my fear is that companies would start looking at where the workers are and saying we need to relocate there," added Hammond.

Hammond expects this $10 million fund to be self-depleting. The hope is that the concept is successful, and once that's proven, the private sector will step in to finance more workforce housing projects.