Madison’s total property value exceeds that of Milwaukee’s for the first time, the Wisconsin Department of Revenue announced earlier this month.
Madison’s value reached $28.732 billion, while Milwaukee’s amounted to $28.346 billion, according to a city of Madison press release.
These values are produced regularly by the Wisconsin Department of Revenue to guarantee fair distribution of the tax burden and state aid, according to the press release. This is necessary for ensuring that assessment practices and cycles are not varied in the valuation of the same classes of property across the state.
Mayor Paul Soglin attributed the growth to Madison’s “healthy economy in all neighborhoods.”
“This is very exciting news,” Soglin said in the press release.
Milwaukee, with its total property value only slightly less than Madison’s, found its city officials unsurprised by Madison’s growth, since the capital city is home to several significant institutions.
Jeff Fleming, Media Contact for the city of Milwaukee, contended the impact these major institutions have on Madison, its economy and its subsequent property values.
“Madison is home to state government, and the University of Wisconsin,” Fleming said. “While they do not pay taxes or have valuation added, the spin off is that employment and the property values adjacent to these institutions significantly increase their relative values compared to Milwaukee.”
Milwaukee Assessment Commissioner Steve Miner said Milwaukee is still recovering from the Great Recession and working to overcome unique challenges that Madison and other parts of the state do not face.
Unemployment, specifically, is a burgeoning factor in the demand for housing, and is reflected in Milwaukee’s lower overall property values in comparison with Madison’s, Miner said.
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Congruent with Miner’s view, Fleming acknowledged the negative effect national economic pitfalls from the past decade or so have had on Milwaukee.
“Milwaukee was hit very hard by the housing crisis, and unemployment numbers remain much higher than much of the rest of the state,” Fleming said. “As a result, that has impact upon the long term property values in neighborhoods in Milwaukee.”
Milwaukee has also been limited by state law in expanding its boundaries since the 1950s, Fleming said. Madison has not faced that limitation, which has been a significant factor in Madison’s valuation growth, Fleming said.
Miner believes Milwaukee is making headway though, despite citywide challenges. The mayor’s office is highly concerned with finding jobs for Milwaukee residents, and the city is prospering in redevelopment and construction, Miner said.
Michelle Drea, Madison’s interim city assessor, was pleased with the news of Madison’s growth but said while higher property values generally benefit the community as a whole, rising property values do have an effect on the availability of affordable housing.
“Also contributing is the failure of the governor and legislature to address revaluations of property by big-box retailers under the ‘dark store’ theory,” Drea said. “These revaluations reduce corporate property values, resulting in an increased share of the tax burden for residences. The city is doing what it can to increase the availability of affordable housing by providing funding to support additional affordable housing units throughout the city.”
Despite the affordable housing concern, the new equalized property value will help hold down the property tax rate, which in turn, will allow existing property owners to see less of an increase in taxes overall, Drea said.
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Drea said increases in property taxes may result in areas of the city where larger increases in property values have occurred.
“As the economy has continued to improve since the Great Recession, residential and commercial property values have grown in Madison,” Drea said.
The press release also discussed population changes between the two major cities. According to the U.S. Census Bureau, Milwaukee had an estimated population of 595,351 on Jan. 1, 2017. On that date, Madison’s population estimate was 255,214. Since 1970, Madison’s population has grown 48 percent, while Milwaukee’s population has fallen 17 percent.
Drea sees this steady increase in population as a result of new business and growth in the health and biotechnology sectors from the sustained base of the university.
“There has also been conscious decision making from the City to foster a healthy and dynamic place to live and raise a family,” Drea said. “The impact of these decisions can be seen through the many accolades the city receives from publications around the world.”