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State of Housing

What's the housing situation in Madison?

The State of Housing in Madison

Housing production in Madison dropped during the Great Recession and has never caught up. Today, job opportunities in and around Madison grow faster than the growth of new housing in the area. This imbalance means that many people cannot live near where they work and must commute, contributing to traffic congestion and carbon emissions. Those who do live near where they work face low vacancy rates, stiff competition, and rising rents.

Affordable Housing

Households who are spending more than half of their monthly income on housing are considered extremely cost-burdened. Madison’s efforts to provide affordable housing have contributed to a lowering rate of extreme cost burden, but the Dane County rate is still higher than the national average, according to the Dane County Housing Needs Assessment. The report concludes that Dane County needs 800-1000 more affordable units just to bring that rate down to the national average. A standard metric for housing affordability is that a housing unit should cost 30% of household income or less.

Housing that is affordable without government subsidies is considered naturally occurring affordable housing. This type of housing can arise through the process of moving chains, which occurs when high-income households move into newly built market-rate housing and free up older housing, which becomes more and more affordable as it depreciates. According to the 2020 Housing Snapshot Report from the DPCED, Madison has fewer expensive units than households able to afford them. This suggests that, if more new market-rate units were built in Madison, some high-income renters would move out of lower-priced units and into more expensive units, freeing up the lower-priced option for someone else.

Housing units can also be made affordable through subsidies. Subsidized affordable housing options in Madison currently include 742 units of low-rent public housing, 115 units of multifamily housing (WHEDA), and a 24-unit project-based Section 8 complex. The CDA also issues housing vouchers for around 1600 Madison households renting from participating landlords.

Accessory Dwelling Units (ADUs)

Accessory Dwelling Units (ADUs) are an important, but often overlooked, piece of the pro-housing movement. Commonly referred to as 'granny flats', ADUs are small, stand-alone units built on the same lot as a single-family home. These buildings can provide homeowners the opportunity to live close to an elderly family member or provide a place for extended family to stay. Alternatively, the owner can choose to rent out ADUs to others in the community. Either way, the construction of ADUs increases the supply of housing in a neighborhood while also providing an efficient use of existing land.