Despite the fact that the vacancy rate in the Madison area is at a four-year peak, developers have started moving toward building high-rise complexes recently. High-rise buildings are springing up with a noticeable frequency in the Madison area.
The recent influx of high-rise construction is due to several factors, including low interest rates.
\Interest rates are sitting in the toilet,"" said Wayne Dishaw, developer of the Aberdeen Apartment complex, currently under construction at 437 W. Gorham. ""If we build now we can install ceramic tiling, Energy Star appliances, balconies, leather sofas, you name it. We can afford to build a better building and furnish it nice.""
A six-story apartment building from developer Mike Fisher is under construction across the street from the Aberdeen.
The vacancy rate in the Madison area is 5.84 percent this third quarter, as compared to 4.85 percent in 1999. But the rate is much lower in the campus area.
Dishaw said he feels the vacancy rate on campus is due to the fact older, run-down buildings keep their rent at the same level but do not take appropriate steps in facility upkeep. Prospective tenants are turned away from less aesthetically appealing apartments and the spaces are more likely to remain vacant, he said.
Cliff Fisher, who owns both smaller apartment buildings and several high-rises, said the high-rise influx has only affected those with run-down buildings, and the positives of the high-rises outweigh the negatives.
""It slows down urban sprawl,"" he said. ""Every three houses takes up an acre of land. In a city like Madison, if you can build up, it keeps the city from having to spend on trash and road maintainence.""
However, smaller property owners are feeling some negative effects of the increase in high-rise construction.
""It's driven property taxes way up,"" said Mark Osborn, owner of several smaller apartment buildings in Madison. ""Some of us smaller guys have to increase our rent in order to pay property tax. Our land has become more valuable than improvements on our buildings.""
Despite rising property taxes, smaller apartments feel they offer invaluable services such as better landlord accessibility and a friendlier atmosphere.
'We give better services which attract better tenants"" Osborn said. ""I'm not worried about the competition, I'm worried about the property taxes.\
