Joe Urban | Sam Newberg, Urbanist

Affordable Housing/Jobs Imbalance in Milwaukee, the Twin Cities and Everywhere

Dateline: 2:03 pm March 19, 2012 Filed under:

A recent article in the Milwaukee Journal Sentinel (as fine a midsize city newspaper you’ll find anywhere) predicted a jobs/housing imbalance in the greater Milwaukee metro area. Welcome to the club! There isn’t a metro area in the country that doesn’t have an imbalance of jobs and housing across its various municipalities.

I’m talking of course of the imbalance between affordable or workforce housing and jobs that pay affordable or workforce wages – in other words, people who are working in any number of industries, including teaching and stocking the shelves at WalMart, but cannot afford a really nice home. The reality is, this includes a large percentage of Americans – up to 30% or more. There is great demand for housing in these income levels but insufficient supply, and there are nearly always imbalances across cities.

Take the Milwaukee example. According to the Southeastern Wisconsin Regional Planning Commission, suburban Milwaukee cities like Brookfield, Cedarburg, Delafield, Mequon, New Berlin and Oconomowoc have more low-and moderate-wage jobs than affordable housing. Milwaukee is not alone – this geographic disparity exists in all metro areas to some degree. It is a simple relationship between just a couple factors – as each individual city grows, it generally adds single-family homes and jobs at a faster rate than they set aside land for their “fair share” of high-density housing sites in which more affordable housing can be built. Add to that an overall lack of resources and financing for affordable housing and you get this disparity.

Nowhere else have I found a more concise but thorough analysis of affordable housing need than Determining Affordable Housing Need in the Twin Cities 2011-2020, released by the Metropolitan Council. The report is short, but well researched. It looks at four basic criteria – each city’s planned total additional housing for the decade, that city’s existing proximity to lower-wage jobs, existing affordable housing stock, and access to transit service.

In practice this means a variety of outcomes. For example, a central city or inner-ring suburb with a vast supply of older apartments doesn’t need to add as many affordable units as a newer suburb with very little existing affordable product. A city with good transit service must add more housing because of the lower-income households depend on transit service to a greater degree. Finally, a “bedroom community” doesn’t need to add as many housing units versus a city with a greater supply of low-wage jobs.

The map on page 12 of the Met Council study shows an interesting result. Just like in Milwaukee (and no doubt many metro areas), a pattern emerges that shows newer, wealthier suburbs in general need to provide a disproportionate share of new affordable housing units. What is interesting is the fact that the two core cities of Minneapolis and St. Paul must add the most. This is not because of an existing imbalance of housing per se, but rather because the two core cities have the best proximity and transit service to a greater number of low-wage jobs.

Released in 2006, the Met Council’s plan influenced the resulting 2008 comprehensive plans for every city in the metro area. These plans are not strictly enforceable – no city will be held accountable for the development of their “fair share” of affordable housing. But it helps the industry argue for approvals and financing for affordable housing. For two recent affordable housing market studies I completed in the suburban communities of Woodbury and Savage, I found substantial demand and very little competition. My study was bolstered by the Met Council report indicating both communities needed to create more than 2,000 affordable housing units this decade. Conversely, my studies in Minneapolis show the sheer proximity to jobs and transit results in low vacancy for affordable housing, despite substantial competition.

In other words, the numbers don’t lie; there is a need and some communities have a more acute need than others. Every metro area should be so lucky as to have a study like the Met Council’s Affordable Housing Need analysis. What is needed, moreover, is the political will to live up to the needs analysis and the financing tools with which to do so.

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