With new developments recently emerging in the Madison area Ald. Scott Resnick, District 8, said an overabundance of housing units may bring forth long-term issues for landlords and developers alike.
A majority of the new city developments are housing units, including the buildings located at 727 Lorillard Court, 627 North Lake Street, and the proposed Steve Brown Apartments on West Gilman Street. Resnick said this sudden boom in housing units could overwhelm the market and could mean Madison will experience issues with housing in the future.
“I think there is a general amount of concern with the amount of luxury apartments that are being added to campus,” Resnick said. “We are seeing a boom. More units are being built particularly in the campus area than we have seen in the past 20 years.”
According to Resnick, the vacancy rate for apartments in Madison is 1.6 percent and the low percentage signifies a high demand for renters. Despite the high demand, the apartments in the process of development and approval may exceed demand.
“The campus area cannot absorb 100 percent of this growth,” Resnick said.
Ald. Michael Verveer, District 4, said the two most-cited factors in the building boom for the last couple of years downtown are the historically low interest rates and low vacancy rates.
Verveer also said many developers are looking at new jobs the Epic Systems software company is providing around the Madison and Verona areas to fill the high-end units.
David Pokorny, a former Epic Systems employee who now works for Sagacious Consultants, said the new Steve Brown Apartments would cater to wealthy, young professionals. The proposed building would be considered higher-end luxury units, which typically do not appeal to students.
Resnick said the new luxury apartments are “causing a lot of students to be concerned about what this will do to rent, what this will do to the value of Madison and certain neighborhoods.”
Despite the recent increase in jobs produced in the area, many residents are still concerned that developers will exceed their demand.
“People are asking the same question,” Verveer said. “Are all of these apartments going to be filled?”
