Wauwatosa incentivizes ADUs with $25K forgivable loans

Business Journals

28-04-2025

By submitting your information you are agreeing to our Privacy Policy and User Agreement .
The city adopted language in its zoning code in 2019 to allow for accessory dwelling units, but only two have since been constructed. Here's why Wauwatosa wants to change that.
AT A GLANCE
Wauwatosa is offering $25,000 forgivable loans to incentivize accessory dwelling units.
The city aims to expand its housing stock without changing neighborhood character.
Dozens of residents have shown interest.
GET TO KNOW YOUR CITY
Find Local Events Near You
Connect with a community of local professionals.
Explore All Events
Wauwatosa property owners willing to tackle a home addition could offset their costs with a $25,000 forgivable loan as the city aims to boost its number of accessory dwelling units.
Mark Hammond, Wauwatosa's development director, said the city is incentivizing ADU construction to expand housing options. Discussing the concept April 23 during the inaugural State of the City address, Hammond said Wauwatosa has funds earmarked for four residents to pay for utility connection costs to city mains and streets when building a unit.
"In a fully developed city like Wauwatosa, ADUs are a great way to add to our housing stock without changing our neighborhood's character," Hammond said.
ADUs are usually built as a separate structure to an existing property and include a kitchen, bathroom and bedroom, Hammond said. In Wauwatosa, their size is limited to 900 square feet.
Although ADUs are built on a smaller scale, Hammond said they can be expensive, so the city hopes the $25,000 will "make it attractive enough financially for folks to build them."
The city adopted language in its zoning code in 2019 to allow for ADUs, but only two have since been constructed, according to Eva Ennamorato, communications manager for Wauwatosa.
RELATED
The four forgivable loans would be paid for with $100,000 the city has remaining from its American Rescue Plan Act funds, a federal pandemic relief measure. Hammond said the money must be fully disbursed by the end of 2026.
Once that has been allocated, there are no other plans to incentivize residents to consider ADUs, he said. The subsidy is meant to act as a catalyst.
"We think that if we get some built, we'll learn as a city. Our local builders will learn. Our homeowners will learn, but then we'll also have these ADUs in the neighborhood. People can drive by them. People can walk by them. So we think it's worth it to put some money forward to help bridge the gap there," he said.
Since launching the incentive publicly in January, city staff has met with 70 residents interested in the possibility of an ADU, but they have not applied, Hammond said.
He said those conversations with homeowners are helping the city better recognize limitations for residents who might be interested in building ADUs. That information could be incorporated into the ordinance when Wauwatosa considers zoning changes this year to potentially address their needs.
Milwaukee-area single-family home builders
Home starts, local, 2023
Rank Prior Rank Business name
1
1
Harbor Homes
2
3
Kaerek Homes Inc.
3
4
Stepping Stone Homes Inc. View this list