A study from UW-Oshkosh found local zoning changes seem to be “a necessary but insufficient condition” for expanding workforce housing.
The report was issued earlier this summer by the university’s Whitburn Center for Governance and Policy Research. It makes the case that “zoning reform” as well as engaging with public-private partnerships and state government programs are key to expanding workforce housing options.
While zoning changes to allow developers more flexibility have helped create an “enabling environment” for housing expansion, authors say the success of such policies depend on other factors such as developer interest, financing and intergovernmental collaboration.
“Similarly, state partnerships alone cannot fully address local housing shortages without supportive zoning frameworks at the municipal level,” they wrote.
The study analyzed local regulations and efforts in five Wisconsin cities: Madison, Eau Claire, Viroqua, Merrill and Montello. The first two of these, along with being the largest municipalities considered, expanded workforce housing in large part by adopting zoning flexibility, authors found.
While Madison allowed higher-density mixed-use developments near employment centers, resulting in a streamlined approval process for small multifamily and “infill” housing, the city also worked with large employers in the region such as Exact Science to drive more workforce housing.
“From an analytic standpoint, Madison exemplifies how zoning reform, in concert with private sector engagement, can yield measurable outcomes in workforce housing supply,” authors wrote. “The reforms also reveal how local governments with deeper administrative capacity can convert policy intent into practice.”
At the same time, Eau Claire finished an update of its zoning code in 2025, allowing more residential structures in single-family neighborhoods and adding provisions for duplexes, townhouses and other developments. Authors say this approach allows developers to “build more diverse housing types without complicated variances” or conditional use approvals.
Meanwhile, smaller communities like Viroqua and Merrill have leaned on programs provided by the Wisconsin Housing and Economic Development Authority, per the report. While Viroqua has adjusted its zoning laws to allow “projects that otherwise could have been prohibited,” Merrill hasn’t done much to systemically change its own zoning framework.
Authors used Montello as a baseline case study, noting it hasn’t enacted zoning changes or state partnerships, “demonstrating how traditional zoning and limited capacity limit the production” of workforce housing.
“Without new zoning allowances or state collaboration, Montello has realized truly little quantifiable progress in expanding workforce housing opportunities,” authors wrote. “Local market conditions also limit development, as smaller rural communities often have fewer developers and financial intermediaries interested in lower-margin housing projects.”
Another section of the report proposes a comprehensive State-Local Workforce Housing Partnership Program, involving a coordinating body within WHEDA as well as the state Department of Administration’s Division of Housing.
The proposal calls for state incentive grants for municipalities adopting “zoning reforms” that boost housing density or diversify housing stock, technical assistance networks offering legal help and more to local governments, and housing development consortiums linking partners to co-finance projects.
“The combination of financial support with regulatory flexibility would incentivize scalable and sustainable workforce housing development across Wisconsin,” authors wrote.
