Increasing developments, prices and populations in this red-hot rental market
MADISON, Wis. (WMTV) - The American dream of owning a home feels like just a dream these days. With the average price of a home in Wisconsin at more than $275,000 and more than $389,000 in Dane County, according to Wisconsin Realtors Association, more people are turning to renting.
NBC15 is looking into how the increase in renters is driving up cost. With the growing population in Dane County, developers are struggling to keep up with the demand for multi-family housing.
Recent college grad Samuel Larson has spent months scrolling through listings for an apartment.
“There’s the one extreme of you can find a very cheap kind of rundown place that’s typically more like college students, that type of vibe, or you can find a very nice place that’s just not realistic price wise,” Larson said.
Larson is searching with two of his buddies in downtown Madison.
“The group options are usually some of the first ones taken from what I’ve seen thus far,” Larson said.
With only two months left on their current lease, their previous non-negotiables in a new place like in-unit laundry and parking are starting to become less mandatory.
“Okay well maybe laundry is like just a block down the road maybe like there’s parking spots just somewhere else,” Larson said.
Larson is just one of many people in this area looking for a place to live.
“Right now, in Madison the boom is happening,” Flad Development Construction and Management and Leasing Vice President Andrew Flad said.
The boom of buildings for future renters who are struggling to find housing.
“The number of cranes that are in the air… And not just in Madison, Middleton, DeForest, Waunakee, Sun Prairie, East side, West side, near West, near East,” Flad said.
Over the last decade, multi-family homes have continued popping up across Dane County.
Just drive down a one mile stretch in West Madison, and you’ll see multiple new apartment complexes sprouting from once empty fields.
Here is a breakdown of new construction for any building with two or more units. This includes duplexes, condos, townhomes, and apartments, basically any new housing structure besides a single-family home in Dane County.
- In 2011, 721 units were built.
- Five years later, in 2016, that number increased to 3,168 units.
- After 10 years, in 2021, a record 5,385 units are built in Dane County.
- The preliminary numbers for 2022 are in through March… so far 775 units have been approved by cities in Dane County.
“There’s a huge influx of people coming into Madison. There’s also a huge wave of baby boomers getting out of their single-family homes. They’re done with the snow plowing and the shoveling and the ice and lawn maintenance and looking to downsize,” Flad said.
Developers like Andrew Flad are preparing to house the growing population in Dane County.
“The med students are coming in droves from all over the country all over the world. You’ve got places like exact sciences and epic; University is a huge driver and the need for housing is remains really steady,” Flad said.
“How we grow matters,” Capital Area Regional Planning Commission Agency Director Steve Steinhoff said.
Steinhoff, whose company coordinates planning and development across cities in Dane County, said the county is planning to house an incoming 7,000 people per year.
“It takes it takes a lot of time, as you can see, to build new housing units. And, you know, as I said, if we need, you know, 3000 housing units or so every year, that’s just a lot to add in order to keep up and if you don’t keep up, you know, that means more and more people are competing for fewer and fewer units. And that drives the price of rent up too,” Steinhoff said.
“It’s going to be a community or a city in itself. And I think it’s going to have most of the amenities. Of a large urban area.” Alterra Design Homes Owner Ryan Werth said.
On an empty plot in Fitchburg, Werth explains the plan for “The Point” at Terravessa Apartments.
Werth said the 46 units will contribute to the 3,000 people expected to live in the neighborhood by the time the apartments are finished in 2023.
The location is near an already developed single family home neighborhood and K through 6 school.
But they are not just building apartments, they are incorporating retail spaces and outdoor venues, all within walking distance, creating a sense of community.
“Those commercials are just gonna be used to serve the neighborhood needs, for mostly lighter commercial for like a pet supply and we’ll have a coffee shop, ice cream shop and we’re also thinking about dry cleaners and things that will really benefit the residents here,” The Point at Terravessa Commercial Project Developer Shery Yu said.
If developers are not growing out, to less populated areas of the county, they are growing up in places like downtown Madison and repurposing old buildings for multi-family housing.
“Like former strip malls growing into, you know, multi-story buildings with housing and shops and a lot of growth like that,” Steinhoff said.
“So, where we are right now there were two older office buildings… and that’s similar to the project we’re building down the street next year two older office buildings. So those are urban infill type projects,” Flad said.
Look at the number of approved units over last 10 years just in the city of Madison alone.
- In 2011 the city of Madison approved around 600 multi-family housing units for development in Madison.
- Five years later, in 2016, that number jumped about 1000 units, to around 1,600.
- After 10 years, in 2021, around 2,600 units were approved for development.
- As of March of 2022, the 10 approved projects will develop 2,315 units in the city of Madison.
“We’re seeing a lot of building permits on the large apartment buildings, you know, like, it’s just gonna be pretty large, you know, 57 units, I don’t know. Or single-family homes, and not a whole lot in between,” Steinhoff said.
“Ideally, we’d like to purchase a home, but everybody knows the way that the housing prices are. So, we’re kind of in a waiting period,” Renter Mark Kornacker said.
But Madison newcomer Mark Kornacker did not wait to sign his lease at new luxury apartments in Hilldale. He signed before his apartment was even built.
“We came up to visit I believe in October when the building was still mainly studs just to look at the floor plans. But yeah, it was it was a good eight to nine months before we even moved in,” Kornacker said.
Larson, on the other hand, does not have 8 or 9 months to find housing, he needs something now.
“There’s some discouragement. At the same time, it’s you know, if you try to put a bright spin on things, it’s kind of a fun little adventure that might end with a very poor ending. Mostly, you know, it’s it’s good. We’ll figure it out,” Larson said.
“I don’t see the affordability. You know, getting a lot better. I mean, it’s just when you look at the cost of materials and the cost of land and the high demand is you have people moving here from California who would think buying a million-dollar houses, you know, as a yard sale, you know? So, things like that are those factors are not going to I don’t I don’t see changing,” Steinhoff said.
NBC15 is committed to following the housing and development trends in Wisconsin. This story is part of a series we will be doing on affordability, new developments, and anything you bring to our attention.
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