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Wausau staff: tight labor market, aging population and rising construction costs are reshaping housing demand
Summary
City staff told the Economic Development Committee that Marathon County shows a relatively high labor-force participation (about 65%) and a tight labor market, while construction costs and housing-price increases are straining entry-level buyers and contributing to underproduction of about 1,000 housing units since 2006.
City staff presented employment and housing data on July 7 that officials said highlight a tight local labor market, demographic aging and escalating construction costs that complicate efforts to expand affordable housing supply.
The presentation, given by a city staff member identified as Randy, cited a Marathon County labor force of about 73,028 and a labor-force participation rate near 65%, higher than state and national averages. Staff said unemployment has been low (roughly 3'4% pre-pandemic) for much of the past decade and described a demographic shift toward older age cohorts (notably a growing 65'to'74 group) and smaller household sizes, which together change the kinds of housing units demanded.
Randy also detailed construction-cost trends: single-family construction indexed to 2020 rose about 43.7% in the five years prior to the presentation; multifamily construction costs increased on a similar scale. Staff cited local data that median household income increased from about $67,000 in 2020 to roughly $77,000 more recently, while median gross rent remains relatively low (reported at about $999).
Committee members discussed how those dynamics play out in practice. Alder Killian said multiple offers on single-family homes are common: "When a house comes on the market, we probably have 10 offers on every house, and many of them are above the asking price." Alder Neal asked whether buyers were owner-occupants or speculators; Killian and staff said their local experience suggests most buyers are private individuals rather than corporate buyers.
Randy warned that building costs and higher interest rates make it difficult for new multifamily construction to lower rents immediately; he said stabilizing rents may be a more realistic near-term goal than large rent reductions.
No formal action was taken; members asked that future presentations include specific metrics to support decisions about whether and what type of housing is needed.
