EAU CLAIRE — Construction of new apartment buildings has surged in the Eau Claire metropolitan area, but growth of single-family homes has been about average this year, according to U.S. Census Bureau housing statistics.
The local findings are part of a report the Wisconsin Policy Forum issued earlier this month documenting a rise in overall housing permits boosted largely by new multi-family buildings in the state.
“Eau Claire is actually a poster child for this,” said Mark Sommerhauser, the nonpartisan group’s communications director.
The amount of new housing being built in the Eau Claire metropolitan area — Eau Claire and Chippewa counties combined, was up 94% this year through September when compared to an average of the same months from the prior four years. Those figures from the Census Bureau show that single-family homebuilding was running right about at average while construction of buildings with two or more dwellings grew by 254%.
Altoona — one of the state’s fastest growing cities by population — is contributing to the Eau Claire area’s housing growth.
Joshua Clements, Altoona city planner, noted that for about a decade — from the end of 2001 to start of 2011 — there had been no multi-family housing built there.
“In Altoona, almost all new housing in the 2000s was single-family, so there was very limited choice,” he said.
In the past two years, there were 338 dwellings created in multi-family homes.
The city has also seen an increase in single-family home construction. For the last six years, there’s been an average of 27 homes built annually in Altoona. That’s up from averaging 17 per year between 2010 and 2014.
Clements said Altoona’s increasing variety of new housing as a positive to fit changing lifestyles, demographics and preferences in housing choices.
All sizes needed
The leader of a local trade association agrees that housing is desperately needed for people moving to the area as well as current residents looking to downsize or upsize.
“The big benefit of all the multi-family units is it’s helping to alleviate the housing stock issues we’ve got,” said Christina Thrun, executive officer of the Chippewa Valley Home Builders Association. “They’re filing them as fast as they can build them, but we have a need for housing at all levels.”
As for single-family homes not growing at the same rate as apartments and townhouses, she said there are a few factors contributing to that.
Part of it is due to an ongoing shortage of workers in the building trades, which she attributed to people leaving the profession during the Great Recession and then not being replaced in the same numbers by new workers entering the field.
“They can only take on as much work as they have staff for,” Thrun said of local homebuilders.
That’s led to Thrun and others in the industry to make programs designed to encourage more students to consider careers in construction.
Aside from the workforce shortage, Thrun said another reason for the pace of single-family home growth in Wisconsin is fewer lots prepared for them compared to pre-recession years.
“We are in a major deficit nationwide in terms of buildable lots,” Thrun said.
Part of that is due to post-recession changes in the banking industry that made it harder to get loans for land, she said.
But another factor is urban areas running out of land for single-family homes and challenges developers face when trying to build in outlying areas.
“In the Chippewa Valley we have limited space in the city limits so we have to create developments and build homes in the outer townships,” Thrun said. “However, opposition from neighborhood groups has created difficulties in builders finding locations to build these needed single-family homes.”
To avoid situations where builders propose projects that get stopped due to political roadblocks, she urges local government officials to stick to their comprehensive plans, which developers look to when planning new housing.
A banner year
The number of new housing permits issued in the state this year is on pace to reach its highest level in Wisconsin since the Great Recession, but still significantly lower than what was seen in the 1990s and early 2000s, the Wisconsin Policy Forum report states.
“While Wisconsin is on pace in 2021 to easily surpass last year’s totals, it would remain far shy of this previous high,” the report stated, comparing current figures to the record year of 2003.
Wisconsin is doing better than other states when it comes to new housing built this year.
Through September, new housing permits are up 31.9% in the state compared to the average from the previous four years. Nationwide, the increase has been 29.1%.
But Wisconsin differs from its neighbors when it comes to what kinds of new homes are being built.
Single-family permits are up 12.2% from the average, but multi-family homes — including large apartment buildings — grew 67.8%.
“That seems to be a Wisconsin-specific thing, it’s not happening nationally,” Sommerhauser said of the disparity between the types of new housing.
Clements believes economic pressures facing the Chippewa Valley are contributing to the surge in multifamily housing.
Costs of new construction, child care, health care and transportation are all rising faster than wages, he said.
“In general, single-family homes are the most expensive, land and resource intensive housing format. As costs rise much faster than incomes, this places an increasing percentage of the population out of the potential market for single-family homes,” he said.
The Wisconsin Policy Forum had previously issued a paper with concerns on affordability in rental housing, but viewed the latest growth spurt positively for growing the state’s overall housing supply.
“In Wisconsin in particular, the recent increase in multi-family housing permits is a positive indicator,” stated the report’s conclusion. “Yet the state’s comparatively sluggish pace of single family housing permits remains a cause for concern, and one that warrants further study.
“It remains to be seen if recent housing construction will meet demand and ultimately make housing more accessible and affordable — or if more work will be needed to respond to this critical cost-of-living challenge for many Wisconsin households.”
Data used in the recent report are from a monthly survey done by the U.S. Census Bureau of thousands of local governments in the U.S.
While the statistics are not a perfect measure of actual construction — some projects with permits get delayed or even canceled — they are useful for watching trends, the Wisconsin Policy Forum stated.