To try to keep pace with its unrelenting population growth, Madison has made unprecedented investments in subsidized housing and aggressively pushed through policy changes meant to spur development.
But developers say they are still frustrated by a city they say often gets in its own way.
“Many in Madison city government continue to view developers as a threat and their job to be to protect the city from that threat,” said Bill Connors, executive director of Smart Growth Greater Madison, which advocates for the development community.
“This has been the culture in Madison for a long time, and it needs to change if Madison is to have any hope of meeting its housing needs.”
Among the issues developers cite: Unduly complicating and delaying projects and raising costs, which can drive investment elsewhere.
People are also reading…
Threshold Development Group forged a collaboration with Madison city staff and the neighborhood to overcome obstacles and bring higher density to a $50 million redevelopment with 188 housing units and commercial space rising on the 800 block of Williamson Street. But Threshold also got socked with $800,000 in costs late in the approval process to upgrade sanitary sewer that will extend far beyond the project.
Madison easily tops the state’s most populous cities in growth from the 2020 Census to final estimates in 2023, adding 12,099 residents. That’s six times the number of runner-up Eau Claire, and the percent change, up 4.4%, is more than double Eau Claire’s. By contrast, Milwaukee lost 2,200 residents, 0.38% of its population, during that time.
Read more:
>> How long does the building permit process take?
>> Madison tops national lists in price, demand
In the past decade, the average rent in Madison for an 880-square-foot apartment jumped from $1,162 to $1,530 a month, and the vacancy rate now hovers at an unhealthy 3.6%, far below the desired 5%, making it the third-tightest rental market in the top 100 metro areas in the nation. The value of the average single-family home soared from $245,894 in 2015 to $457,300 this year.
And it’s not stopping. Current projections show Madison growing by 115,000 people, in 59,000 households, by 2050.
The city is rushing to create housing, committing more than $78 million in subsidies over the last decade alone, buying land for development and readying to invest in hundreds of lower-cost units. The city also is pushing aspirational, but sometimes controversial, planning and zoning changes intended to spur greater density — amid strong pushback from certain neighborhoods.
The county has been leading an effort involving 17 municipalities to assess housing efforts and identify priorities for collaboration.
“If you inventory best housing practices around the country and then look at Madison, you’ll see one of two things: Either Madison is already doing it, or our state law prohibits Madison from doing it,” said Kurt Paulsen, professor of urban planning at UW-Madison. “They’ve already pretty much maxed out the toolbox.
“The market is squeezed with more demand than supply,” Paulsen said.
Developers — who take the risks but also reap the profits of new construction — say the city gives too much clout to neighborhoods and citizen committees, sometimes relies on dated neighborhood plans or zoning for height that ignores construction realities, and sets building standards that raise costs, which are then passed on to residents.
And even after projects are approved, developers argue, an array of agency conditions and signoffs can add months to the time it takes to get a building permit.
But change means tinkering with a process built around citizen input, judicious use of limited city resources and rules.
Mayor Satya Rhodes-Conway, who has pushed major increases in the Affordable Housing Fund, as well as controversial planning and zoning changes to add density, said the city must come to terms with the realities of dynamic growth.
“We have an incredible quality of life. We have people wanting to live here,” she said. “The community needs an honest conversation about population growth and what that means.”
Construction proceeds on Wisconsin Housing Preservation Corp.'s 245-unit lower-cost housing project at East Washington and Fair Oaks avenues, adjacent to Hawthorne Elementary School on the East Side. WHPC needed a lengthy review to secure city approvals and a building permit, but the city also gave the project financial support.
Changing the rules
Before 2013, the city’s antiquated zoning code forced nearly every development proposal through an arduous, unpredictable “planned development” process that required negotiating rules for most projects. It changed to a process in which the rules were set in advance, but most large projects required a conditional use permit, which still was unpredictable and expensive.
More recently, the city changed the code again so more types of projects need only staff review.
The city required a "step back" on the top floors of the Avenir development in the 500 block of West Washington Avenue. The requirement, which reduced the total number of units that could be built, is meant to preserve Downtown views of the lakes and Capitol, and in areas where taller buildings are common, to reduce a “canyon effect,” city officials say.
But the city still has anxiety about height, developers say, with limits in some plans and zoning that doesn’t match construction realities. They further argue that, in addition to increasing housing, taller buildings and more units allow economies of scale to cover higher costs in concrete construction, which is usually needed in buildings taller than five stories.
Meanwhile, the city’s requirements for building setbacks, step backs, bird-safe glass, green roofs Downtown and more can add costs, reduce the number of units in a building, or both.
“We are not maximizing the number of units we can put on each site,” Connors said.
Bruce Bosben is chairman of Apex Real Estate Holdings of Madison, which has done many projects, including the new 10-story, Adria apartments at 179 W. Wilson St. on the Lake Monona waterfront.
Bosben said the building should have been 14 stories — still under the state Capitol height limit that prohibits buildings from being taller than the base of the pillars surrounding the Capitol dome, or 1,032.8 feet above sea level — with another 100 units. But zoning didn’t allow it, even though taller buildings surround it, he said, adding, “There’s absolutely no reason this site be constrained to 10 stories.”
Developer Terrence Wall, who is based in Middleton and has led many projects, said following the bird glass rule would have added $1.2 million to the cost of the lower stories of the 15-story “The Moment” project to be built on the Lake Monona waterfront. Instead, he spent more than $100,000 to redesign the building with smaller windowpanes to avoid the requirement.
Bruce Bosben, chairman of Apex Real Estate Holdings of Madison, said the new 10-story, Adria apartments at 179 W. Wilson St. should have been 14 stories, with another 100 units, but that zoning didn’t allow that, despite there being other taller buildings nearby. He also spent extra money for required bird-safe glass on lower floors and about $300,000 to redesign the upper floors with smaller windows to avoid the regulation. He also spent more than $250,000 to install a green roof.
The rules have a purpose, said Heather Stouder, administrative services director for the city’s Department of Planning, Community and Economic Development. Bird-safe glass is an effective way to prevent or reduce bird collisions with buildings, which are a common reason for the decline in some species in urban areas, she said.
Setbacks from property lines ensure adequate spacing between buildings, space for trees and stormwater drainage, and rarely result in a significant waste of space, she said.
Sometimes grueling process
If rules can be daunting, many developers sometimes find the city’s land use approval and permitting processes to be grueling, lengthy and unpredictable, like facing a pricey root canal with no guarantee of success.
Last summer, the City Council discarded recommendations from staff and the Plan Commission and shook the development community by rejecting a rezoning request from Core Spaces of Chicago to create 232 market-rate housing units near the UW campus. The next month, amid a backlash, the council reversed its decision, with some members saying they didn’t fully understand the project when they voted against it.
Developers find confusion and inconsistency from the get-go, with some City Council members and neighborhoods more demanding and engaged. Unlike Madison, developers note, neighboring communities don’t have Landmarks or Urban Design commissions that wield real power to alter, or kill, a project.
“Other cities, it’s just a pleasure to deal with them,” Wall said. “They want new housing. They want development. They want us and make us feel wanted. Madison, on the other hand, does everything it can to send a message that developers are not wanted, are evil and hated.
“Get rid of zoning. Let the marketplace decide what can be developed,” he said. “Get rid of the Urban Design Commission. Get rid of 90% of the commissions and committees. Get rid of half the city staff and eliminate regulations and burdens on development.”
Developer Terrence Wall planned to use traditional brick for the six-story Peloton apartments at Fish Hatchery Road and South Park Street. But he said Madison insisted on a glass prow that added $1.2 million in cost because he had to change the construction materials for that part of the building. He said he also had to redesign the building because the city wanted 6 feet of right-of-way on one side, adding more cost. “Sure, it looks great," Wall said, "but we had to raise all the rents in the entire building to pay for that.”
The development community isn’t monolithic, though.
“I’ve got a basically positive view of the city,” said Tyler Krupp, principal and development lead for Threshold Development Group of Madison, which has done multiple projects.
“If you’re new, the barriers can seem very daunting. You can stare at the rules and get very frustrated. But you can always solve things creatively with the right conversations in Madison.”
But even after land use approvals, developers decry lengthy waits for sign-offs from agencies on dozens of detailed conditions to get a development agreement and building permit, which can complicate financing and potentially scuttle a project.
“The time lags are so great, so unpredictable, it’s almost unmanageable,” Krupp said.
Some developers grumble about staff, but many contend it’s more about the city lacking enough personnel to handle workload.
“Do we need more staff? Absolutely,” Rhodes-Conway said. “Our staff has not kept pace with population growth. Unfortunately, we are not in a position to add more staff because of limits that have been put on our budget.”
That means more change is needed, Connors said, adding, “They’ve got to figure out how to make the process more efficient with the staff they’ve got.”
“Housing dies the death of a thousand cuts,” said Paulsen, the urban planning professor. “Whenever we see a structural problem like this, it’s never just one thing. It’s everything together.”
Money is talking
Like real-life Legos, development is dramatically recasting the city’s landscape, with city investments playing a big role.
In 2010, with the country mired in recession, the city under former Mayor Dave Cieslewicz made a pivotal investment, spending $5.56 million to buy 7.8 acres on the 700 and 800 blocks of East Washington Avenue from auto dealer Don Miller, who moved operations to the Far East Side.
After multiple fits, starts, twists and turns, the city chose Otto Gebhardt to redevelop three major sites from that purchase, which brought stylish towers with housing, restaurants, a grocery store and office space, and sparked a mother lode of investment on the thoroughfare.
In 2014, former Mayor Paul Soglin proposed an ambitious $20 million initiative — the Affordable Housing Fund — to help create 750 to 1,000 lower-cost housing units during the next five years. The idea was to provide funds to help developers grease the path to competitive and lucrative federal Low-Income Housing Tax Credits through the Wisconsin Housing and Economic Development Authority.
The city, the 82nd-most populous in the United States, sits atop national lists for multi-family housing demand, price increases and new young residents per capita.
Rhodes-Conway has accelerated the initiative. The Affordable Housing Fund, which delivered $4.5 million when she took office in 2019, increased to $10 million in 2023 and is budgeted at $20 million this year.
From 2014 through 2023, the city delivered $53.9 million from the fund to help secure $299 million in tax credits and create 2,679 units of rental housing in 29 projects costing a total $618.4 million. Of those units, 1,943 are for those making no more than 60% of the Dane County median income, or $65,940 for a household of three.
“The creation of the Affordable Housing Fund is hugely important,” said Helen Bradbury, principal at Stone House Development of Madison, which has done 15 projects with about 1,400 units. “Also important is exempting affordable projects from city park fees.”
The city has made major investments with tax increment financing, delivering $24.6 million over the same period to help create 1,982 units of owner-occupied and rental housing. The 4,661 units supported by the Affordable Housing Fund and TIF include 694 units funded by both.
But developers say the city could be more ambitious and creative with TIF, expanding possible uses and delivering more support to fill financing gaps in a time of high interest rates and construction costs.
“Why is the city overly conservative?” said Mike Slavish, chief operating officer for the nonprofit Wisconsin Housing Preservation Corp. “How about freeing up some more of that money to incentivize developers to move forward?”
The city is evolving, including use of TIF to support infrastructure like streets and sewers that burden developers, as well as tapping it aggressively to buy land so it can be redeveloped in a way the city wants, Stouder said.
On the South Side, the city’s Community Development Authority is assembling sites that include a potential $200 million redevelopment with multiple buildings, 400 to 600 housing units, commercial space and more at the corner of South Park Street and West Badger Road that would reimagine a prime gateway to Downtown.
The CDA, which is developing or redoing housing on the North and Southeast sides, is also poised to launch a roughly $300 million remake of its biggest concentration of housing for low-income residents — and more than triple density to 1,216 units — on its piece of “the Triangle” Downtown.
Pushing for density
With demand relentless, the city has launched a series of sometimes controversial planning and zoning changes intended to stimulate more housing.
Westley Spitznagle outside his newly constructed accessory dwelling unit, at left, behind his home on the Near West Side. Spitznagle didn't need a conditional use permit to build the unit, but the process took a while to ensure the unit wouldn't impede the Fire Department or other services. "If there's one aspect I'd consider changing, it would be the duration it took to get a building permit," he said.
In June 2021, the city changed zoning rules in mixed-use and multi-family residential areas in two ways: allowing for small and mid-scale residential buildings as permitted uses, and for a moderate increase in units per acre consistent with the Comprehensive Plan of 2018.
Six months later, the city altered rules to allow accessory dwelling units, sometimes called “granny flats,” as a permitted rather than a conditional use on properties. It recently changed the rules to eliminate a requirement that the owner live on site and expanded where the units can be built.
Last year, it created a “Transit Overlay District” to encourage more housing along upcoming bus rapid transit and high-transit corridors, and later an ordinance to allow more stories in Downtown projects — but not extra height — in exchange for lower-cost units.
Some of the changes triggered backlash among some residents concerned about change in their neighborhoods.
But they also haven’t yet produced much housing.
It can take years for a developer to assemble and secure approvals, Stouder said, adding, “I think we need more time.”
But the city isn’t stopping.
In the summer of 2023, the city updated its Comprehensive Plan, adding more density and allowable building height, especially in the Regent Street area, a move applauded by the development community.
As the city shapes a new West Area Plan, one of 12 plans that will eventually cover the city, residents in the Old Sauk Road area display signs protesting the possibility of rezoning that would allow more density. As a review process unfolded, city staff made changes in response to concerns raised on the West Side.
Now, Madison is drafting 12 large Area Plans that will cover the entire city over the next decade, with the intent to make handling growth more equitable across all parts of town. The first are on the Northeast and West sides. The Southeast and Southwest plans are scheduled to start later this year, followed by efforts on the remaining eight plans through 2031.
The new approach, which could lead to “proactive” rezoning to increase density in some places, has sparked a firestorm of protest — especially on the West Side, where residents oppose adding density in long-established neighborhoods. City staff, as the processes unfold, already have made changes in response to concerns raised on the West Side.
Rhodes-Conway said she hopes the approach will inspire more people to think citywide.
“Fundamentally, it’s about fairness,” she said.
Editor’s note: This article has been updated to correct a photo caption to indicate that signs in the Old Sauk Road area protested the possibility of proactive rezoning that would allow more density in the West Side Plan.
"We have an incredible quality of life. We have people wanting to live here. The community needs an honest conversation about population growth and what that means."
Madison Mayor Satya Rhodes-Conway
Madison is a boon for housing developers, but they decry excessive hurdles
