Wauwatosa's growing population is becoming younger, more college educated and more diverse. As rents and home values increase, and vacancy rates decrease, the city will need to increase and diversify its housing stock to meet demand, a study says.
According to the recently-released Wauwatosa 2023 Housing and Needs Assessment, the city's population is expected to grow from 48,000 to 52,000, necessitating that up to 2,200 housing units be built in the city by 2040.
"Low vacancy rates, like Wauwatosa’s, indicate that we don’t have enough housing to meet the demands of the market," the study says. "A housing shortage leads to higher rent prices and can impact employers from being able to recruit and retain workers who can find and afford to live in the community where they work."
The study, commissioned by SB Friedman Development Advisors, says that the city's population has grown faster than previous forecasts modeled.
The firm last completed a housing study for the city in 2016, when Wauwatosa had an aging population, but that trend is reversing. The average age in the city fell from 40 in 2013 to 38.
Other notable demographic trends include that since the 2016 study, the number of residents possessing a bachelor’s degree or above increased from 54% to 59%, and since 2010, the percent of residents who identified as white decreased by six points.
The study specifically points to the city's low vacancy rates. In 2021, Wauwatosa had a 2% vacancy rate for rental units, a 10-year low. An average annual vacancy rate between 5 and 8 percent is considered a healthy range, according to the study.
Since 2015, 13 residential developments have delivered 1,857 multifamily units in Wauwatosa. An additional six developments are in the pipeline with 652 proposed units, according to the study. The volume of new housing units delivered in the past seven years exceeds the 15-year housing demand projection from the 2016 study.
"Nonetheless, the citywide vacancy rate in 2021 was only 2%, suggesting that the new units have been absorbed rapidly and that there is latent demand for additional multifamily units," the study says.
While housing costs have increased, the median household income in Wauwatosa has increased by approximately $14,000 since the 2016 study, unadjusted for inflation, the study says. This has resulted in fewer households paying more than the economist-recommended 30% on housing costs.
The study recommends that the city continue to develop multifamily housing where possible and evaluate city-owned lots that could be developed to meet various housing needs.
"Housing production at any price point will relieve housing pressures; however, it is also important that the city continue to make deliberate efforts to increase the supply of new housing for low- and moderate- income households," the study says.
Further, the study recommends attracting for-sale "missing middle" housing such as townhomes, small single-story homes or condominiums, as well as develop a zoning overlay to incentivize development of affordable housing.
Other housing challenges identified in the study were the need for more workforce housing, especially for those in health care and professional services who are more likely to live outside the city, as well as more housing for seniors, low-income residents and young families. There's also a need for housing that is physically accessible and housing for active seniors who are looking to downsize but not move into an age-restricted facility.
