Affordable Housing 101 (2024) view

Report Analysis

Recommendation Based on the Report

Verona should use zoning and local incentives to boost mixed-income affordable housing.
Key Takeaways:
  • The “big squeeze” of demand — lower-income and moderate-income households competing with higher-income households for too few units — is not just a Madison problem. Verona likely feels some of that pressure too, especially as Dane County grows.
  • Many of Verona’s workers — school teachers, public-service staff, health-care workers, young adults, retirees — likely fall into the income bands (30-80% AMI) that struggle with affordability.
  • If Verona does little or nothing, the county-wide deficit of needed affordable units (1,765/year) will continue to shrink — meaning continued housing-cost burden, reduced workforce stability, possible displacement or longer commutes, etc.

Report Summary

  • Definition of affordable housing: The fact sheet defines “affordable housing” as housing where a household spends no more than 30% of its gross monthly income on housing costs (rent + utilities). If a household spends over 30%, they’re “cost-burdened”; over 50% is “severely cost-burdened.”
  • Current need in Dane County: There is a large shortage. The fact sheet notes that to meet demand, the county needs to produce 1,765 new affordable units annually — roughly 1,000 more units per year than are currently being produced.
  • Who needs affordable housing: The shortage affects a broad swath of the population — not just traditional “low-income” households — including families, seniors, working adults/employees (teachers, health care providers, mechanics, etc.), young adults, veterans, and more.
  • Affordability thresholds used: Affordable multifamily housing that meets the RHS goals is typically targeted at households earning between 30% and 80% of Area Median Income (AMI) (i.e., “mixed-income” developments).
  • Cost example: For Dane County, 60% AMI for a family of four is given as $75,540/year. For such a household, a two-bedroom unit’s rent + utilities (i.e. affordable threshold) should be no more than $1,700/month.
  • How new affordable housing is funded: Affordable multifamily developments are made possible through public subsidies — state and local funding, gap financing, land deals, tax-increment financing (TIF), bonding, etc.
  • Causes of the shortage: RHS points out that there are multiple root causes: insufficient housing supply (too few units built), rising development costs, and stagnating wages (household incomes not keeping up with housing costs).
  • Recommended municipal strategies: The fact sheet outlines a menu of policy/tools that municipalities can adopt to support affordable housing — for example: including affordable-housing goals in comprehensive plans; using TIF or bond financing; expedited permitting; adjusting zoning (e.g., relaxing multi-family caps, offering density bonuses); reducing impact fees or parking requirements for affordable projects; acquiring land for affordable developments.

Report Notes

No notes found