Rising developments, prices and populations in this hot rental market
MADISON, Wis. (WMTV) – The American dream of owning a home sounds like a dream these days. With the average home price in Wisconsin at over $275,000 and over $389,000 in Dane County, according to the Wisconsin Realtors Association, more and more people are turning to rentals.
NBC15 studies how the increase in the number of tenants drives up costs. With Dane County’s growing population, developers are struggling to meet the demand for multi-family housing.
Samuel Larson, a recent college graduate, spent months sifting through apartment listings.
“There’s an extreme where you can find a very cheap, run-down type of place that’s generally more student-like, that type of vibe, or you can find a really nice place that’s just not realistic in terms of price,” Larson said.
Larson searches with two of his buddies in downtown Madison.
“Group options are generally some of the first to pull from what I’ve seen so far,” Larson said.
With only two months left on their current lease, their previous non-negotiables in a new location like the laundry room and parking in the unit are starting to become less mandatory.
“Okay, maybe laundry is like just a block up the road, maybe like there’s parking spaces 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 going on,” said Andrew Flad, vice president of Flad Development Construction and Management and Leasing.
The boom in buildings for future tenants who are struggling to find housing.
“The number of cranes that are in the air…And not just Madison, Middleton, DeForest, Waunakee, Sun Prairie, east side, west side, near west, near east,” Flad said. .
Over the past decade, multifamily homes have continued to pop up in Dane County.
Just drive a one-mile stretch in West Madison and you’ll see several new apartment complexes springing up from formerly empty fields.
Here is a breakdown of new construction for any building with two or more units. This includes duplexes, condos, townhouses, and apartments, basically any new housing structure in addition to a single family home in Dane County.
- In 2011, 721 units were built.
- Five years later, in 2016, that number rose to 3,168 units.
- After 10 years, in 2021, a record 5,385 units are being built in Dane County.
- Preliminary numbers for 2022 are through March… so far, 775 units have been approved by Dane County towns.
“There is a huge influx of people coming to Madison. There is also a huge wave of baby boomers leaving their single-family homes. They are done with snow removal, shoveling, ice and lawn maintenance and looking to downsize,” Flad said.
Developers like Andrew Flad are preparing to house Dane County’s growing population.
“Medical students are coming in droves from all over the country, all over the world. You have places like exact sciences and epic; The university is a huge driver and the need for housing remains very stable,” Flad said.
“How we grow is important,” said Steve Steinhoff, director of the Capital Region Regional Planning Commission Agency.
Steinhoff, whose company coordinates planning and development in towns in Dane County, said the county plans to house 7,000 incoming people a year.
“It takes a long time, as you can see, to build new housing. And, you know, like I said, if we need, you know, like 3,000 homes every year, that’s just a lot to add to keep up and if you don’t keep up, you know, that means more and more and more people compete for fewer and fewer units. And that also drives up the price of rent,” Steinhoff said.
“It will be a community or a city in itself. And I think there will be most amenities. From a large city. said Alterra Design Homes owner Ryan Werth.
On an empty lot in Fitchburg, Werth explains the plan of “The Point” to 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 completed in 2023.
The location is near an already developed single-family neighborhood and a K-6 school.
But they don’t just build apartments, they incorporate commercial spaces and outdoor venues, all within walking distance, creating a sense of community.
“These ads are just going to be used to serve the needs of the neighborhood, mostly lighter ads like a pet supply and we will have a cafe, an ice cream shop and we are also thinking of dry cleaners and things that will really benefit the residents here,” said Shery Yu, developer of The Point at Terravessa business project.
While developers aren’t expanding into less populated areas of the county, they’re expanding into places like downtown Madison and redeveloping old buildings for multi-family housing.
“Like old malls that are turning into, you know, multi-story buildings with housing and stores and a lot of growth like that,” Steinhoff said.
“So where we are now, there were two older office buildings… and it’s similar to the project we’re building down the street next year, two older office buildings. So these are urban infill type projects,” Flad said.
Look at the number of units approved over the past 10 years in the city of Madison alone.
- In 2011, the City of Madison approved the development of approximately 600 multi-family units in Madison.
- Five years later, in 2016, that number jumped by around 1,000 units, to around 1,600.
- After 10 years, in 2021, approximately 2,600 units have been approved for development.
- In March 2022, the 10 approved projects will develop 2,315 units in the city of Madison.
“We see a lot of building permits on big apartment buildings, you know, it’s just gonna be pretty big, you know, 57 units, I don’t know. Or single-family homes, and not much in between,” Steinhoff said.
“Ideally, we would like to buy a house, but everyone knows the price of houses. So we’re kind of in a waiting period,” tenant Mark Kornacker said.
But Madison newcomer Mark Kornacker didn’t wait to sign his lease on new luxury apartments in Hilldale. He signed before his apartment was even built!
“We came to visit, I believe, in October, when the building was still mostly studs, just to look at the floor plans. But yeah, it was definitely eight to nine months before we even moved in,” Kornacker said.
Larson, on the other hand, doesn’t have 8 or 9 months to find a place to live, he needs something now.
“There is discouragement. At the same time, you know, if you’re trying to put a shiny spin on it, it’s kind of a fun little adventure that could have a really bad ending. Mostly, you know, it’s good. We’re going to find out,” Larson said.
“I don’t see the affordability. You know, it’s much 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 of buying million dollar homes, you know, like a garage sale, you know? So things like that, it’s those factors that aren’t going to change, I don’t see it,” Steinhoff said.
NBC15 is committed to following housing and development trends in Wisconsin. This story is part of a series we’ll be doing on affordability, new developments and anything else you bring to our attention.
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