State Permitting Rates Still Trailing Levels From the Early 2000s

Tuesday, July 30th, 2024 -- 10:00 AM

(Trevor Hook, Wisconsin Public Radio) A new report from the Wisconsin Policy Forum finds that while permitting rates for building new housing have increased since the onset of the COVID-19 pandemic, they still trail permitting levels in the early 2000s.

According to Trevor Hook with Wisconsin Public Radio, Mark Sommerhauser, policy researcher and communications director for the Wisconsin Policy Forum, told WPR’s “Wisconsin Today” that building levels stayed relatively low for years after the 2008 financial collapse.

“We’re still way behind where we were in the early 2000s,” Sommerhauser said. “Most critically, our housing inventory is feeling the impacts of years and years of very low levels of new construction, basically from 2008 onward for more than a decade.”

The forum’s report looked at the rates of both single and multifamily housing permitting statewide. They found that the state’s peak permit activity was between 2002 and 2004. Over the past three years, both types of permitting were down, with single-family permitting rates being nearly half of 2002-2004 levels.

The group’s research finds that housing permitting rates in 2021 jumped significantly compared to the previous decade, especially with multifamily housing. But these rates decreased in 2022 and stagnated last year.

Sommerhauser said 2021 was something of a “sweet spot” for new housing. “In late 2021 and early 2022, we saw a really large increase in mortgage interest rates, Sommerhauser said.”

“I think that, more than anything, is really the biggest factor in terms of why we didn’t sustain the increases or build on those the increases that we saw in 2021 into 2022 and 2023.”

Todd Mandel is the executive director of the Wisconsin Partnership for Housing Development, a nonprofit group which builds and helps other organizations build affordable homes to rent or buy. He said there is a lot of uncertainty as costs fluctuate.

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