When it comes to real estate development, the relationship between the public and private sectors is among the most important factors in bringing a project to fruition.
Communities throughout southeast Wisconsin are contending with a housing shortage, a tight industrial real estate market, evolving retail and office markets and a need to boost tax base – all at a time when real estate development has become more difficult – making those relationships even more crucial in recent years.
To get a sense of which southeastern Wisconsin municipalities professionals in the real estate development industry think are the most accommodating – and the most frustrating to deal with – BizTimes Milwaukee sent a survey to local real estate industry leaders representing a variety of sectors including developers, brokers, architects, engineers and construction firms. We asked respondents to share the three most development-friendly and the three least development-friendly municipalities in the region.
Here’s how they responded:
Southeastern Wisconsin's most development-friendly municipalities:
1. West Allis
2. Oconomowoc; Oak Creek (tie)
3. Mount Pleasant; Kenosha (tie)
Honorable mentions: Milwaukee, Port Washington, Brown Deer
Southeastern Wisconsin's least development-friendly municipalities:
1. Milwaukee
2. Pewaukee; Mequon (tie)
3. Germantown; Franklin (tie)
Respondents were invited to provide comments about their picks and what is important to them when working with a municipality or public sector entity. Some focused on policies, while others focused on “intangibles,” like communication and strong leadership.
What makes West Allis, Oconomowoc and Oak Creek development hot spots?
Municipalities that ranked in the top three have been hot spots for development in recent years, some due to their geographic location, others due to their supply of undeveloped land. Leaders in those municipalities also point to policies and practices that have made them attractive places to do business.
A landlocked community, West Allis has been aggressive in finding and supporting reinvestment opportunities, such as redeveloping abandoned manufacturing plants, schools and churches into offices, retail and housing units, and locating sites for infill development opportunities. West Allis officials could not be reached for comment by deadline.
In Oconomowoc, officials have leveraged the municipality’s abundance of undeveloped land.
“Oconomowoc has been proactive in attracting projects through our Planning Department’s streamlined processes as well as a willingness to explore public/private partnerships to ensure development success,” said Bob Duffy, economic development director for the City of Oconomowoc. “The city’s engaged staff and recent efficient process improvements have established a streamlined review/approval process, while ensuring quality development projects for the community.”
Duffy outlined practices including free staff meetings twice a month for developers to discuss projects and a digital approach to plans and permits and applications that is easy to navigate and can cut costs of printing and mailing.
In 2024, however, Oconomowoc’s Common Council passed a new housing ratio that capped multifamily housing at 35% of its housing stock, a limit that it had already met, stalling proposed projects. Since then, the pipeline of new multifamily proposals in the city has dried up.
In Oak Creek, “we have a philosophy that we just don’t start at ‘no,’” said Mayor Dan Bukiewicz. “We can arrive at ‘no,’ we can arrive at a different version of what’s been offered, but we don’t start there.”
Mount Pleasant points to its proactive approach to planning and development.
“Planning staff have substantive conversations about the permitting process and zoning regulations as we look to improve efficiency and update ordinances,” village administrator Tami Simons said. “Those ongoing efforts led to broader initiatives like the zoning ordinance revision that won a Best Practice Award from the Wisconsin Chapter of the American Planning Association in 2023, for example. They also produce smaller, but substantive, improvements like updating the village’s site plan approval process to remain consistent with changing state laws.”
Last year, the village gave out a $3.75 million loan to support an apartment project – a practice that is not common in southeast Wisconsin.
Policies play big role in attracting development
Some policies that survey respondents in the private sector pointed to as important for attracting development were generous (or at least negotiable) tax incremental financing policies; availability of planned unit development districts; and reasonable fees for proposal submittals, utility connections and construction permits.
“The communities that are least friendly generally tend to have a long, expensive approval process that is heavily micromanaged, either through the planning or engineering review process, or both,” a developer said. “The requirements for development are excessive and inflexible, causing projects to cost more just to meet their requirements, not to provide any real value to the end product. The communities that are the most development friendly are exactly the opposite. The final result is a high-value, affordable project completed in a reasonable amount of time, which is exactly what is needed in the current economic environment.”
In Milwaukee, the city has faced criticism from the private sector for its TIF policy, which generally only considers TIF for projects that have a job creation component or provide affordable housing units. Milwaukee’s Department of City Development has been working on a workforce housing TIF policy for several months but has not yet rolled one out.
Some survey respondents also noted Milwaukee’s slower approval timelines as reason for ranking it a “frustrating” municipality to work with.
“We are the largest municipality in southeastern Wisconsin and the number of projects that we are evaluating in any given week is substantially more than any of our neighboring municipalities,” DCD Commissioner Lafayette Crump said in response. “There may be times when a project manager or a department can devote a significant amount of its attention to one to two specific projects, in some of these other municipalities. Our team is actively managing a significant number of existing projects as well as evaluating new projects.”
Crump emphasized that the city is always “open for business” and has been making changes throughout its departments to streamline its development processes, particularly as it relates to plan and permit review times.
In Mequon, respondents said the municipality’s zoning code is stricter than in other suburban communities. For example, Mequon’s minimum lot size for single-family homes is 21,780 square feet, compared to Oak Creek at 8,000 square feet, according to their respective zoning codes.
“The City of Mequon’s land use policies and development standards may not align with all development companies’ desired economic proforma, but the city has a proven track record of preservation, enhanced economic value and community sensitivity design,” said Kim Tollefson, director of planning and development. She added that the city’s policies have evolved over the years, accommodating development along the Port Washington Road corridor and the multi-phase Mequon Town Center development.
“The ‘best’ communities understand land use and the need for residential housing to fuel the commercial and business in the area,” a developer said. “The ‘worst’ communities want really expensive houses for the top wage earners, lowering density and not understanding how fewer homes means fewer people in the community using the business services.”
There are communities that were not widely voted as “least development friendly” that could be considered among the most restrictive in the region, though. For example, River Hills in Milwaukee County has a minimum lot size of 5 acres for single-family homes. In Waukesha County, Chenequa has the same zoning restriction for lots not abutting a lake.
One local developer argued that most communities are in fact development friendly, suggesting what separates them on a scale from most to least “is a matter of degrees, not diametrically opposed policies.”
“The ‘most friendly’ simply have their act together and are using the economic tools available to reinvest in their communities. ‘Least friendly’ indicates either: A., an awkward policy/promotion of development opportunities using available economic tools, or B., an aversion to what they feel is an assault on the character of their community resulting from growth/reinvestment.”
Putting policy into practice could be more important
Many respondents noted that, while policy plays a big role, having experienced planners and development staff, clear processes and other things not on paper can be more important in some instances.
“Let’s just talk about communication as an example,” said Mike Testa, business development manager and senior brokerage associate at Milwaukee-based Ogden & Co. “Are they easy to communicate with? Do they understand what real estate developers are looking for, and able to participate in those conversations and be effective partners?”
“In difficult communities, often times the city planning staff is at odds with the council,” a Milwaukee-area architect said. “Brookfield, for example, has a wonderful planning staff, but some solid development proposals have been denied because of politics or neighborhood opposition. Pro-development communities have solid leadership from their respective mayors and have a planning staff that provides good guidance to developers. Most often these first-ring suburbs, who are landlocked and fully built out, see the need to densify their cities to remain viable.”
