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Wednesday, February 21, 2024
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Madison year-over-year rents rose highest in the nation, study finds

A report from Apartment List found year-over-year rents rose by 14.1% in Madison, the highest of the 100 major cities surveyed.

Madison's year-over-year rents rose the highest of any major city in the United States, heightening the city's housing crisis, according to a recent study tracking rent prices in major U.S. cities.  

As of March 2023, a study facilitated by Apartment List National Rent Report estimated year-over-year rent prices in Madison rose 14.1% between March 2022 and March 2023, increasing by 30.4% since March 2020. Month-to-month rent also increased by an average rate of 1.1%.     

Year-over-year rent prices increased an average of 2.6% across the country, according to the study. Additionally, 78 of the 100 largest cities surveyed experienced rising rent prices.

The city's rent growth raised concern among Madison residents that rising rent prices heighten the city's housing crisis. Professor Kurt Paulsen, housing policy expert at the University of Wisconsin-Madison, said much of the rent growth is due to the city’s low vacancy rate. 

“For 2022, the average vacancy rate was only 2.8 percent,” Paulsen said in an email. “Low vacancies mean rent increasing because more people are chasing fewer units. In Madison, this is a higher rate of rent growth because of the low vacancy rate.”  

Paulsen also said the demand and huge increases in construction costs raise housing prices everywhere. 

“Even with all the housing we’ve built over the past decade, we continue to add households at a faster rate than housing units are produced,” he said. 

To address the issue, Madison Mayor Satya Rhodes-Conway said affordable housing is a top priority for her administration.  

“We have seen an uptick in new housing construction with 15,000 new housing units approved in the last few years,” Rhodes-Conway said. “That includes 1,120 units of student-oriented housing currently under construction.” 

Rhodes-Conway said the city is looking to address rising rents by increasing funding for affordable housing. 

“In addition to adding to our housing supply, I am investing more city funds than ever in dedicated affordable housing,” she said. “We are building student housing as part of a redevelopment of the Lake Street parking ramp and bus terminal, and we just adopted a policy to allow developers to build more units in their building if some of them are affordable.” 

Paulsen said the impact of higher rent prices falls disproportionately on low-income households and renters with children. 

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“When rents go up and vacancies go down, the people most negatively impacted are service industry workers and our lowest-income households and renters with children,” Paulsen said. “Lots of people are competing for fewer units. It also means that people who can’t find housing in their first-choice neighborhood might have to live much further out and drive longer distances, which increases traffic congestion.” 

Rhodes-Conway has made it her goal to make housing affordable and invest more funding for the city while also adopting policies that will give developers authority to build more units if affordable.   

“There is still a lot of work to do, which is why housing is a top priority for my administration,” Rhodes-Conway said. 

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