Locked Out: Door County’s affordable housing shortage
Door County Knock is reporting an in-depth series on Door County’s affordable housing shortage, addressing questions such as why the county lacks affordable housing, how market trends have contributed to its decreased availability and what roadblocks exist to building more. Click here to read more.
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Door County’s housing shortage is not just a market problem or a local zoning issue, residents with experience in affordable housing development say. It is also shaped by state laws that limit what communities can require of developers and how they can raise money for housing. In other states, municipal governments have some tools to offset market pressure and create more affordable housing that Wisconsin law does not allow.
As local housing expert Mariah Goode stated earlier this year, the defining issue for Door County’s particular version of the national housing crisis is that “people in Door County don’t make enough money to rent or buy at (the prices) developers need to make money.”
A number of organizations, government agencies, and individuals are trying, with some success, to develop and build more housing that is actually affordable for the average Door County resident, though the problem is far from solved. What exactly can be done depends a great deal on local control, like zoning regulations, as well as state housing laws and policies.
While Wisconsin is moving forward on some housing legislation and Door County has eased zoning criteria in recent years, there are still potentially removable roadblocks to more affordable housing development, Goode said. She was the director of the county Land Use Services Department for 20 years, and serves on the board of the Door County Housing Partnership.
Looking at what other states are doing to address the housing crisis sheds some light on exactly what Wisconsin can and cannot do, according to Goode and Patrick Moynahan. Moynahan currently lives in Door County, but he worked for most of his career on the East Coast, developing and managing various affordable housing programs.
The median age of first-time homebuyers is now 40 years old, according to the National Association of Realtors. The average cost of a home in Door County was $257,591 in 2020. It is $418,951 in 2025, according to Zillow. Home prices have nearly doubled in five years, and a thriving tourism-based economy means workforce members are in high demand and they need affordable places to live.
No inclusionary zoning
Inclusionary zoning is a practice that refers to municipal policies requiring or rewarding developers to set aside some new housing units as affordable for low or moderate-income households. These policies either create a mandate for developers, or offer incentives, or both.
Inclusionary zoning is a policy tool some other states use for housing, but it is prohibited in Wisconsin.
Chapter 66 of Wisconsin State Statute expressly prohibits mandatory inclusionary zoning. Developers can enter into an agreement voluntarily, however, a method the City of Sturgeon Bay has used to build some affordable housing in its Tax Incremental Districts.
The Avenue, a development by Spoerl Commercial in Sturgeon Bay, is a recent example of a voluntary deal where a municipality requires a certain number of affordable units in a development in exchange for incentives.
Before he moved to Door County several years ago, Patrick Moynahan lived in Fairfax County, Virginia, where the housing issues were similar to what Door County is experiencing now, he said. Moynahan helped develop the AHOME initiative, or Affordable Housing Opportunity Means Everyone, a movement that resulted in the county adopting an “affordable dwelling unit” or ADU ordinance in 1990.
Fairfax’s ADU program is part of the county zoning ordinance. It requires developers of new residential construction to set aside between 5 and 12.5 percent of their units as affordable to low or moderate income households. Low to moderate-income is defined by the ordinance as income that is 70 percent or less of the Area Median Income.
Developers can also choose to contribute a certain amount of money to a municipal affordable housing trust if they do not want to include the required percentage of affordable dwelling units in their projects. The program has been very successful at creating affordable housing, with no obvious aesthetic difference between affordable and market-rate units, according to Moynahan.
In 2024, the ADU program produced 3,131 housing units including rental and for-sale units, and 195 of them were acquired by the Fairfax County Redevelopment and Housing Authority as permanently affordable housing.
The program took a combined effort from builders, developers, land use attorneys, representatives from the Firefighters Association, Police Association, Teachers Association and “some committed civil activists,” to get off the ground, Moynahan said.
A shortage of local tax revenue sources for housing
Taxes and revenue directed toward local affordable housing development is another tool Wisconsin does not have in its toolbox, according to Goode. In 2022, the local room tax increased from 5.5 percent to 8 percent. The Door County Tourism Zone Commission collects the tax from lodging proprietors and distributes 70 percent to Destination Door County and the remaining 30 percent to the municipalities where the lodging occurred.
Wisconsin statute requires that DDC use these funds for tourism promotion and development. In 2023, the Door County Community Foundation started the Community Investment Fund grant program, through which room tax funds are given to nonprofits, businesses and governments for projects that benefit both visitors and local residents.
As of December 2025, the program has granted more than $3 million to various projects.
As helpful as the program has been for reinvestment in the local community, Goode said, none of the money can go directly to building affordable housing, and other states have better tax mechanisms to fund housing.
In Massachusetts, the Community Preservation Act allows municipalities to increase local property taxes up to 3 percent via a ballot measure to adopt the act. The state then matches the amount and the funds can be used for local projects related to historical preservation, land conservation or affordable housing.
In Woodstock, Vermont, funds from an optional 1 percent sales tax on room, food and alcohol sales go toward offering landlords up to $10,000 grants to convert short term rentals to long term rentals for local workforce members. The program expanded recently to include landlords from neighboring towns who rent to Woodstock workers.
Woodstock based its program on a similar one in Big Sky, Montana.
Ephraim and Sister Bay have a Premium Resort Area Tax, or PRAT, and Sturgeon Bay is in the middle of adopting one as well. The half percent sales tax is on “tourism-related goods,” according to the Wisconsin Department of Revenue, and must be approved by voters and the state legislature.
A PRAT tax generally goes toward infrastructure improvements like road and bridge maintenance. It cannot be used to build designated affordable housing, though, and that is a real gap in affordable housing creation, Goode said. She said there are a number of ideas to generate more local tax revenue for housing, but most need state policy change and local momentum.
A portion of room tax dollars could be designated for workforce housing construction or “tourist-supportive housing,” she said. Besides room tax money, a separate tourist “rooming house” tax or additional fees on real estate transfers could be used for housing, Goode added.
Currently, the Wisconsin legislature does not give local governments the authority to implement new taxes or designate how these revenues can be used. A real estate transfer tax has existed in Wisconsin since 1970, but it is a state tax. The transfer tax of $3 per every $1,000 of property value is paid by the seller. Eighty percent of it goes to the state’s general purpose fund, and counties keep the rest to provide local services.
In 2023, a bill was proposed to reduce the transfer tax by one-third and split the funds fifty-fifty between the state and county governments, but the bill did not pass. The Wisconsin Realtors Association supported the bill, claiming it would lower the cost of purchasing a home overall.
However, allowing real estate transfer taxes to go directly toward a local affordable housing fund of some kind would possibly make home ownership even more affordable and accessible, Goode said.
State housing authority limitations
“Generally, WHEDA (Wisconsin Housing and Economic Development Authority) should operate more like Minnesota’s equivalent agency operates,” according to Goode.
The Minnesota Housing Finance Agency can directly administer housing programs and it awards a lot of grant money to developers, local governments and nonprofits, Goode said, while WHEDA has very little grant funding. What it does have is restricted to specific programs like infrastructure or homelessness.
WHEDA also does not directly oversee or manage housing programs, leaving it to the developers, nonprofits and municipalities that receive the financing.
In contrast to Minnesota, WHEDA is primarily a financing agency versus a granting agency. It also does not use any tax dollars; WHEDA is a financially self-supporting “quasi-government agency,” versus a fully-integrated state agency like Minnesota Housing, according to Elmer Moore, Jr. Moore was appointed by Gov. Tony Evers in 2022 as the chief executive officer and executive director of WHEDA.
“It’s apples to bananas,” Moore said in a phone interview on Dec. 18.
“Three years ago, Minnesota was given a billion dollar hammer to swing at the continuum of housing challenges, whether it’s homelessness (or) affordability,” he explained.
WHEDA can issue bonds, loans and low income housing tax credits to add to housing developers’, nonprofits’ and local governments’ “capital stack” for building housing, Moore said.
Without such tax-funded hammers to provide subsidies and grant funding, projects for housing very low-income or workforce households in Door County do not work, according to local housing coalition members like Goode, who say loans are not enough to bridge affordability gaps in rural resort communities.
Low income housing tax credits, or LIHTC, are doled out by WHEDA on an annual basis, based on scoring criteria in the application process. Housing with a two-mile proximity to amenities like libraries, grocery stores, schools and healthcare is given more points in the application process, for example. Goode would like to see that change from two miles to 10 miles for rural areas, like most of Door County. For many Door County residents in the northern and southern parts of the peninsula, residents travel much farther to get to essential services.
WHEDA designed the application process around “our best understanding of what fosters a really effective community that is going to serve its residents well,” Moore said. “One of the challenges with development in rural communities is there’s often a lack of resources like public transit, so if there’s no public transit and the grocery store is inaccessible, it’s worth asking if that is a good place to build the building?”
A project can also be penalized and deemed ineligible for more tax credits if there have already been some used within a certain timeframe, even if those credits were used for remodeling or rehabilitating housing units. This blocks development in small communities with already limited options, Goode said.
Projects in rural areas are much lower density than those in urban areas, she said, and WHEDA should increase or eliminate its cap on the number of projects or units that can be awarded in a given timeframe.
The organization hosts listening sessions and conferences, according to Moore, and it adjusts its scoring criteria every year. For 2026, WHEDA is going from a one-stage to a two-stage application process this year, he said. The first stage of the application is a proposal, and the second is a full application.
The benefit here is it lessens developers’ risk, Moore said. They can pitch several ideas, including more innovative and experimental ones, without having to expend the resources and the commitment that the full application process requires.
Additionally, he said, rural communities are part of WHEDA’s “set-asides”, meaning they are guaranteed a certain percentage of available LIHTC. Geographic set-asides make sure rural communities only compete with one another versus larger urban projects.
Moore acknowledged there is fierce competition for tax credits and other WHEDA financing, even with the set-asides. The pool of available funds is not large enough to fund all the good ideas, he said.
Tax credits are also set aside for innovation, “wild ideas” that prove there is construction technology and innovation that can bring down development costs, Moore added.
There are a number of success stories, he said, and one of them is a pilot program Door County is part of. In 2020, WHEDA committed $10 million to the Rural Affordable Workforce Housing Initiative and chose Door County as one of three areas in Wisconsin to be pilot communities.
Since 2018, 175 affordable housing units, plus an additional 60 units pending, have been created through the initiative.
Moore acknowledged that “it is incredibly difficult to operate with the state purview, fostering communities’ ability to self-determine…while also operating equitably and making available the operational and technical innovations that are being proved out in other places,” he said.
Other roadblocks
There are several other things Wisconsin law does not allow that would help boost affordable housing stock in Door County, according to Goode.
Sprinkler requirement
A Wisconsin code requiring sprinkler fire suppression for two-story multi-family buildings is prohibitively expensive, especially for small developments, Goode said. The requirement is often an expensive hurdle, especially in rural areas with no municipal water system.
“Right to Rent” law
Wisconsin’s “Right to Rent” law prohibits municipalities from requiring that certain apartments be primary residences. This requirement would free up some rental units in Door County being used for second, seasonal homes, Goode said. She added it could just apply to certain projects or units, or even a percentage of apartments in a municipality.
Limited ability to regulate short-term rentals
The “Right to Rent” law also precludes municipalities setting a cap on the number of tourist rooming houses or short term rentals.
“We need to be able to regulate STRs further,” Goode said, a sentiment shared by Madison, Milwaukee, Sister Bay, Eau Claire, Neenah and the Town of Holland.
All of those municipalities have actively tried to regulate STRs. Neenah recently lost its appeal on a lawsuit from the Wisconsin Realtor’s Association, after the city tried to enact an ordinance requiring an STR to be the owner’s primary residence.
According to the U.S. Census Bureau’s Occupancy Status report for 2018 through 2023, Door County has 23,996 total housing units available. Of those, 14,377 are occupied and 9,619 are vacant. Of those listed as vacant, the Vacancy Status report lists 8,720 units as being for seasonal, recreational or occasional use. This means roughly 36 percent of housing units in Door County are used for this purpose. Not all of them are necessarily STRs, but the data indicates a significant amount of housing is not available for year-round residents.
Overly broad definitions
Finally, there are the roadblocks caused by broad definitions that do not encompass the nuances of reality.
Area Median Income, or AMI, is a metric used by the U.S. Department of Housing and Urban Development, and it is the foundation on which almost all housing policies, programs and income limits are based upon.
The 2025 AMI for a two-income household in Door County is $103,700, and for an individual it is $70,625.
The challenge of using AMI at the county level is it is usually a large geographic area and incomes collected are broadly dispersed, according to WHEDA’s Moore. There is a large wealth disparity between high-income retirees, second-home owners and the local workforce in resort communities. This sometimes makes “affordable” housing unaffordable to those who need the most support, he said.
“It really makes capturing a realistic depiction of the economic situation for families exceedingly difficult,” Moore said.
The AMI is a standardized way to make program eligibility widely understood and it helps determine need, according to Goode, but it can make rent-setting too high for workforce units.
Permanent workforce members like teachers, public servants and tradespeople have jobs that may not be high income, but they are the jobs that make a place livable, according to Moore.
“We’re talking 80 percent of the AMI and below for rental housing,” he said. “80 percent AMI is potentially 40 percent of the community.”
“We’ve got to think differently about how we can design these wonderful places to work for everyone,” Moore added.