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City attorney tells Stoughton council new state housing laws will require comp‑plan revisions, limit rezone denials
Summary
The city attorney briefed the council on two recently enacted state laws — Act 173 (truth in planning) and Act 235 (residential TID rules) — saying the city must adjust its comprehensive plan to project 20 years of housing and that the new rules restrict the city's discretion to deny residential rezones if density and infrastructure criteria are met.
The city attorney told the Stoughton City Council on May 26 that recently enacted state laws will require changes to the city’s comprehensive plan and will narrow the city’s discretion to deny certain residential rezones.
Under what the attorney described as the ‘‘truth in planning’’ law (Act 173), a municipality’s comprehensive plan must project where residential development will occur over a 20-year horizon and identify minimum and maximum residential densities in five‑year increments. If a proposed residential rezone is located in an area the comprehensive plan identifies for future residential growth, is served or can be served by existing infrastructure, and fits within the identified minimum/maximum densities, the city generally must approve the rezone unless it can demonstrate a necessary limit to prevent an overburdening of public facilities or a significant threat to public health or safety, the attorney said.
‘‘So here, it’s kinda flipped on its head where if the city wants to deny the rezone, it needs to demonstrate that it’s necessary to prevent a shortage in or overburdening of public facilities or to address a significant threat to public health and safety,’’ the attorney said.
The attorney said the law takes effect Jan. 1, 2028, giving the city time to revise the housing chapter of its comprehensive plan but urging careful work on minimum and maximum densities so the plan does not inadvertently allow incompatible development.
The attorney also summarized Act 235, which creates a narrowly defined residential tax-increment district (TID) option with different limits and rules: a 3% equalized-value exception for residential TIDs outside the typical 12% cap, strict unit- and lot-size limitations, owner-occupancy requirements for units in such residential TIDs, and limits on how TID project costs can be paid (increment-only reimbursement). He said the residential TID cannot be a donor district and cannot receive increment from other districts.
Council members pressed for clarification about what the changes mean for existing plan‑commission processes and permitting. One member asked whether the plan commission’s criteria and setbacks remain enforceable; the city attorney and staff confirmed that subdivision standards and other zoning requirements still apply, but the comp plan’s density ranges and the new statutory standards will require the city to be deliberate and precise when drafting the housing chapter.
Officials noted an effective-date delay on aspects of the law gives the city time to respond, but that the shift in the burden to the city to justify denials will likely slow the comprehensive plan update and increase staff work to document infrastructure capacity and minimum/maximum densities. City staff said they have begun internal conversations about how to approach the housing chapter and possible annexation implications.
The council took the update as informational; no formal action was taken at the meeting.
