Housing Affordability Analysis (2024) view

Report Analysis

Recommendation Based on the Report

Near-Term Priority: Encourage more homes for ownership (detached, duplex, townhome, condo).
Rationale:
  • Zero vacancy in owner housing
  • Insufficient supply for 80–120% AMI households
  • Middle-income households are putting downward pressure on both rental and affordable units
Boosting ownership housing would:
  • Free up rental units for renters
  • Reduce competition in lower-cost segments
  • Improve affordability across the full housing ladder
  • Support population growth without overheating rents
Secondary Priority: Continue allowing rental construction, but don’t overcorrect
  • Rental supply is not the main barrier right now, and vacancy is already healthy (7.6%)
  • But the city should not discourage rental construction — it should simply rebalance toward ownership options

Report Summary

Key Insights:
  • Verona is growing quickly, and its housing supply hasn’t fully kept pace—especially for owner-occupied homes.
  • Rents and home prices have risen ~6% per year, making housing less affordable for many residents.
  • Rental supply has improved: recent construction has pushed rental vacancy up to ~7.6%, easing pressure on rents.
  • Owner-occupied housing is extremely tight: the housing vacancy rate is effectively 0%, driving up home prices and limiting options for buyers.
  • Lower-income renters are heavily burdened: ~42% spend more than 30% of their income on housing; ~75% of very low–income households are cost-burdened.
  • Projected need: by 2040, Verona will need ~3,400 more housing units (≈190 per year).
  • Current policies (phasing limits, conditional-use requirements, fees) may restrict the city’s ability to meet that production target.
  • Affordability gaps exist: there is a shortage of units affordable to moderate- and higher-income households (80%+ AMI), causing them to “rent down” and increase competition for lower-cost units.
1. The rental market is relatively healthy right now
Evidence from the report:
  • Rental vacancy is 7.6%, far higher than earlier years and in the “balanced” range.
  • A surge in multi-unit construction (265 units in 2022, 403 in 2023) has expanded supply.
  • Most cost-burdened renters are low-income households who won’t be helped simply by building more market-rate rentals.
Conclusion:
The rental market is not currently the main pressure point. Verona has been doing well at adding multi-unit rental supply, and vacancy rates suggest it is keeping up with demand.
2. The ownership market is extremely tight
Evidence from the report:
  • Owner-occupied vacancy is effectively 0% — meaning homes for sale are extremely scarce.
  • Detached single-family homes still make up the majority of the market, but very few are being added relative to demand.
  • Middle- and higher-income households face a shortage of units affordable to them (80%+ AMI).
  • These households then “buy down” or rent down, competing with lower-income renters.
Conclusion:
A lack of ownership opportunities is distorting the whole housing ecosystem. More for-sale homes (single-family, townhome, condo) would relieve pressure throughout the market.

Report Notes

Purpose & Context

  • The report satisfies requirements under Wis. Stat. § 66.10013, which mandates that certain Wisconsin municipalities track housing stock, development, and affordability.
  • It inventories: new residential lots and units approved, undeveloped parcels zoned for residential, parcels suitable for residential (but not zoned), and analyzes how regulations affect cost of new housing.
  • Verona has experienced rapid growth: between 2010 and 2020, its population increased by ~32%.

Housing Stock & Existing Market

  • Just over half of all housing units (including vacant) in Verona are detached single-unit homes under owner-occupancy; 28% of occupied households are renters (up from 26% in 2010).
  • Structure-type breakdown of occupied units: ~54% single-unit detached, ~16% single-unit attached (e.g. duplex/townhome), ~30% multi-unit (3+ units).
  • Rental housing (multi-unit) accounts for a majority of renter households: 70% of renters live in 10+ unit buildings.
  • The rental vacancy rate was about 7.6% in 2022 — up from 1.4% in 2015 — which suggests rental construction has been keeping up with demand.
  • But ownership vacancy is 0% — indicating almost no vacant homes for sale, a sign of tight supply.
  • Over the roughly 7-year period covered (2015 to 2022):
    • Median gross rent increased from $1,008 to $1,407 (about 6% per year).
    • Median home values rose from roughly $250,000 to $353,000 (also about 6% per year).
  • As a result, 42% of renter households pay more than 30% of their income toward housing costs — a common threshold for being considered “cost-burdened.”
  • For lower-income households (under 50% of Area Median Family Income), 75% are considered cost-burdened.

Demand Projections & Future Housing Needs

  • According to the broader Dane County Regional Housing Strategy (2024), Verona is projected to have about 9,115 households by 2040, or ~21,329 people (assuming 2.34 persons/household) under state forecasts.
  • To meet that, Verona would need ~9,442 total housing units by 2040. That means adding roughly 3,404 new units — about 190 units per year.
  • If Verona keeps its existing unit-type mix, that would translate to ~103 new detached single-family homes annually, with the rest in multi-unit housing.

Affordability Gaps & Imbalances

Income Range Need
<=50% HAMFI 30
51%-80% HAMFI --
>=81% HAMFI 1405
All 95
The HUD Area Median Family Income (HAMFI) for a family of 4 was $80,600 annually. (2021)
  • There is a surplus of units affordable to households earning 51–80% of Area Median Income (AMI), and a nearly matching number of units for those under 50% AMI.
  • But there is a significant shortage of units affordable for households at or above 80% AMI — meaning many moderate- and higher-income households are buying or renting “down,” increasing competition for lower-cost housing.
  • This dynamic squeezes lower- and moderate-income households, making it harder for them to find affordable housing — even if some “affordable units” exist.
  • The report notes that some of the City’s policies — notably a “Residential Phasing Plan” that limits how many units can be built each year — may be constraining supply and thereby contributing to affordability challenges.
  • Because of these mechanisms, achieving a balanced, affordable housing market will likely require adjustments: especially if Verona wants to hit future unit-production targets while preserving a mix of housing types and serving a range of income levels.