When Yong Cheng Yang took one look at the price of a downtown Madison studio apartment, she knew there was no way she could afford to live there. 

“Once I saw that, I was like, ‘I’m not even going to do any more further research,’” she said. “I just drove away (from campus) and they got cheaper and cheaper.”

Yang, a rising University of Wisconsin-Madison junior from Brooklyn Park, Minnesota studying kinesiology and global health, widened her search for an apartment for the 2023-24 academic year and eventually signed a lease along with a UW-Madison graduate student for a small apartment on Fish Hatchery Road. The apartment was in her price range of around $500 a month, Yang said, but it’s a 30-minute commute by bus from campus and the bustling downtown.

“I was just really stressed about the budget and then the distance, too, just because I’m not from here and I don’t know anyone here, so I’m trying to survive,” she said.

Yang said she has had to construct her class schedule around her commute, avoiding enrolling in later classes that would keep her out late. 

“I can’t do a lab too late … I know that in the fall, it’s going to get so dark,” Yang said. “I have to be really cautious and make sure I get home safely.”

Yang is one of hundreds of UW-Madison students who have struggled to find affordable housing near campus as rent prices in the city increase. It doesn’t help that the population of Madison and the university’s class sizes have boomed in the past few years, making for an even more frenetic scramble for near-campus housing units and residence hall space. And even though the Madison City Council and UW-Madison have taken steps to provide more housing options, those efforts are hamstrung by market factors and restrictions imposed by the state Legislature.

The median one-bedroom apartment in Madison costs $1,364, according to tracking data from Apartment List, and the median two-bedroom costs $1,617. The city’s average rents increased by 28.4% since March 2020.

An online survey in June asked UW-Madison students to describe their experiences looking for off-campus housing for the 2023-24 academic year. The survey, conducted by newly elected District 8 Ald. MGR Govindarajan, who represents much of the campus area on the City Council and is himself a rising senior at UW-Madison, received over 1,700 responses.

“Apartment hunting was stressful, everything was either too far away from my classes or was way out of my price range,” one student wrote. “I opted to live another year with a roommate I couldn’t tolerate just to be able to afford housing.”

“It gets more stressful each year,” another student responded. “I’ve paid more for each apartment I’ve had every year and have had to sign earlier and earlier in order to secure a place to live.”

“To be frank, it f—ing sucks,” wrote a third.

Students reported difficulty finding off-campus housing that was both affordable and reasonably close to campus as the cheaper units are snatched up quickly, leaving available only unaffordable “luxury” apartments, housing farther from campus, or units that are in relatively poor condition. 

“A lot of other people outside of the campus bubble do not know what students are facing,” Govindarajan said. “They might see a picture of a small bathroom and be like, ‘Oh, that’s in terrible condition.’ But some students might see that and be like, ‘Wow, the tiles on this bathroom are actually clean. There’s no mold, there’s no rats.’”

Students predominantly rent the housing surrounding the UW-Madison campus near Spring and Regent streets, as well as homes and apartments in the downtown area near State Street, on the east side of the Capitol and along West Washington Avenue.

Rising housing prices have led some students to split a small home among more roommates than can comfortably fit, or move farther from campus to find housing within their price range, according to Cleo Le, vice president of the Campus Area Neighborhood Association, a neighborhood advocacy group that represents residents living near the UW-Madison campus.

“Demand is making it so that they will have to pay extraordinary prices for, honestly, probably not the best apartment,” Le said. “The whole leasing season for downtown at times can feel very exploitative.”

Search for housing is ‘extremely stressful’

The scramble starts almost as soon as class begins. 

In Madison, apartments typically open for applications for the following academic year in October or November. Before the fall midterm season begins, many students are already looking for a place to live for the next year. 

UW-Madison senior and history major Jack Kluth described his experience searching for off-campus housing as “extremely stressful in multiple ways.” He said he and his roommates found searching for housing online difficult, and the online database the university offers was unhelpful and “outdated.”

He also struggled to keep up with the pace of everyone else grabbing the available apartments.

“We would schedule a tour (or) walk-through and have it canceled just before because somebody else had signed on to the lease before we could see the place,” Kluth told the Cap Times in an email.

Kluth and his roommates started looking for housing early in the fall and signed their lease in the winter, a common timeline common among students.

Third-year interior architectural design major Kelsey Olson initially wanted to live in a house with her roommates but had to settle for an apartment. 

“A lot of the houses that we looked at were either already taken or they were just way out of our price point for the amount of rooms we needed, or they went super fast,” Olson said. “We (signed the lease) before Halloween because it was going even faster because of the amount of kids that had been enrolled or over admitted a second time around. There was even more competition for us.”

Housing in the downtown and campus area can become prohibitively expensive if students don’t start looking early in the fall, according to junior Tyler Kollross, who started the search for his apartment in October. 

“Get on it right away,” Kollross said. “Otherwise, it’s going to be tough to find something that you’re actually looking for and within a decent price range.”

In 2000, the city passed tenant protections that prohibited landlords from showing or leasing apartments during the first quarter of the length of the lease. For example, if a tenant signed a yearlong lease that begins in August, the landlord could not begin showing or leasing the apartment until November. This mandated “cooldown” period was overturned by legislation passed by the Republican-controlled state Legislature in 2011 as part of a sweeping rollback of tenant protections during former Gov. Scott Walker’s administration.

With so little time, some students are left overwhelmed or confused, particularly for second-year students who previously lived in the dorms and are first-time renters. Gabi Hartlaub, a sophomore studying journalism, said she had “absolutely no idea what (was) going on” as she was looking for housing for the first time last fall. 

“Most of the places that I was looking at that were close to campus were like $1,500 a month for one person,” Hartlaub said. “The websites would say, ‘Oh, it’s $1,500 a month,’ and I thought that you split that between two people. No, it’s $1,500 a month per person.”

Though Hartlaub was able to find a place with another roommate on Mifflin Street within her price range, the apartment has only one bedroom. She and her roommate plan to turn the living room into a second bedroom. 

“This is Madison,” Hartlaub said. “This is not Los Angeles.”

Rising housing prices a result of ‘perfect storm’

Kurt Paulsen, a professor of urban planning at UW-Madison, points to many factors contributing to rising housing prices, from larger structural forces to challenges unique to Madison. 

“If you see some kind of really out-of-whack system, it’s never one thing,” he said. “It’s really a confluence of multiple factors all hitting at the same time.”

Construction costs have jumped since the COVID-19 pandemic as high inflation and supply chain snarls pushed the price of materials up. Another contributing factor is rising interest rates, Paulsen said. As the Federal Reserve has continued to increase rates, developers must pay more on loans taken out to finance construction.

Such costs require property owners to charge more for rent to make up for the higher price of building the housing development, Paulsen said. In addition, landlords are increasing rent on existing properties to cover rising utility costs, and high demand means that people are willing to pay more.

Adding to Madison’s housing supply crunch is the city’s rapidly growing population. The city added more than 36,000 new residents between 2010 and 2020, according to US Census Bureau data, and city estimates project that Madison will grow by about 115,000 people between 2020 and 2050. 

To keep up with this demand, Madison must add at least 10,000 housing units every five years, experts project. The slower the city builds, the larger the deficit grows. 

Much of that growth has been driven by millennial and Gen Z workers seeking jobs with some of the city’s biggest employers, particularly with Verona-based health care software company Epic Systems, which employs over 10,000 people in Dane County and is adding another 1,700 workers by the end of this year. 

These younger workers, Paulsen said, often compete with UW-Madison students for the limited number of units in downtown Madison, the cultural center of the city and home to many bars, restaurants, shops and other amenities.  

“The Madison downtown/campus property market is a unique challenge not present for other Big Ten universities: The areas downtown and near campus where most students want to live are also in high demand for workers and homeowners,” Paulsen said in a July letter to the City Council. “It’s really a geometry problem: lots of stuff in a small space, with increasing demand for more housing and more commercial activities.”

Students who spread out east, south or west of campus run up against “very well-established residential neighborhoods like Vilas, Greenbush and Regent” that “wanted to preserve their kind of single-family character and not be overrun by student rentals,” Paulsen told the Cap Times.

On top of the city’s growing workforce, UW-Madison’s class sizes are some of the largest they’ve been in the university’s history. The larger class sizes would have little effect on the campus-area housing market if Madison wasn’t already facing such a severe shortage, Paulsen said.

“If you add a cup of water to a container that’s empty, it has no effect,” Paulsen said. “But if you add a cup of water to a container that’s full, it’ll spill over.”

All of these factors, both national and local, coalesce into what Paulsen called a “perfect storm.” 

“You have deep and lasting housing demand coming from demographics — the millennials — and strong job growth all pushing on a market under-supplied a thousand units every year in an environment where construction costs and interest rates are high,” Paulsen said.

Little space both on and off campus

Ahead of the 2022-23 academic year, the university aimed for a freshman class size of  about 8,100, around 350 fewer students than the 8,465 enrolled in 2021. However, because more accepted applicants chose to enroll at UW-Madison than the school predicted, the 2022 freshman class ballooned to 8,628 students, the largest in the university’s history. 

The university is again aiming to enroll 8,100 first-year students for the 2023-24 school year, more than 500 fewer than were admitted in the 2022-23 year, according to Brendon Dybdahl, University Housing director of marketing and communications. 

But while freshman class sizes have grown dramatically, the university’s supply of on-campus housing has not.

No additional residence halls have been built nor are any scheduled to be constructed in the near future, Dybdahl said. A renovation of one of the campus’ larger dorms, Sellery, added two floors to the building with an additional 250 beds and is expected to be completed ahead of the 2023-24 academic year, according to the Division of University Housing.  

To provide enough housing for on-campus students, the university has instead had to use the space it has. 

“Over the past few years, this includes converting more of our large double rooms into triples, converting some study lounges into resident rooms, and using the Lowell Center (a conference and lodging facility previously used as a campus hotel) as a residence hall,” Dybdahl said. “We also offered incentives to some students who were interested in canceling their residence halls contract for other options.”

During the 2022-23 academic year, University Housing offered to cover students’ housing expenses for moving out of the residence halls and into Eagle Heights, an on-campus housing community near UW Hospital typically inhabited by graduate students and medical students. The university also offered students living on campus $5,000 or a free campus dining plan to seek off-campus housing as an alternative to living in the dorms. 

Last year, 76 students took up the university’s offer to live in Eagle Heights, and another 200 chose to move off campus, Dybdahl previously told Channel 3000. University Housing is hoping to be able to offer all freshman students housing in residence halls this coming academic year if the university meets its freshman enrollment target, Dybdahl said. 

University Housing can accommodate around 8,000 undergraduate students in its 21 residence halls and an additional 2,000 graduate students and their families across three apartment communities, according to the university. Undergraduate students living on campus are overwhelmingly freshmen, but some students stay in residence halls after their first year.

For the city of Madison, ‘it’s all carrots and no sticks’

Wisconsin state law prohibits municipal governments from enacting “inclusionary zoning” or rent control measures, in which cities regulate the amount of rent privately owned residential developments charge their tenants. The city of Madison can offer incentives for lower-rent developments but in most cases can’t set limits or mandate affordability. 

“It’s all carrots and no sticks,” Paulsen said. 

The City Council ran up against state law earlier this year when it voted down a proposal from developer Core Spaces of Chicago to build a 232-bed market-rate apartment building at the intersection of Johnson and Bassett streets, with many alders citing the lack of affordable housing units included in the development as a reason for denying it. The City Council reversed its decision and approved the project in July in response to concerns that the developer could sue the city.

“What we’re facing with student housing today is that our hands are tied legally by those that were in power previously in the state Capitol and the fact that we still have a state Legislature that’s very unsympathetic to the plight of affordable housing generally,” said District 4 Ald. Mike Verveer, who has represented much of the downtown area since 1995. 

Without the stick approach, the city has resorted to dangling carrots in front of developers in the form of lifting height or floor restrictions in exchange for including a certain number of affordable units in the development, which Verveer called a “density bonus.” Legislation adopted by the city in March allows developers to build additional floors as long as at least half of the additional space comprises affordable housing units for at least 30 years. 

But some students are concerned that the new affordable units will not be enough to meet demand, and the market-rate housing these new developments will offer will still be too expensive.

“The city of Madison, the city that I was born and raised in, has been prioritizing developing luxury apartment buildings for Epic employees and simultaneously raising property taxes which in turn raises rent on student housing,” said UW-Madison education studies and history student Joe Finkelmeyer, in an email to the Cap Times.

The city and UW-Madison’s Office of Student Financial Aid passed a memorandum of understanding in which they committed to working toward the goal of providing affordable housing units to low-income students. Under the memorandum, the city and the university are looking to work with developers to connect FAFSA-eligible students — those receiving financial aid — with cheaper housing near campus.

Over the past few years, the City Council has approved a series of high-density student apartments in the downtown area, including developments that include both market-rate and affordable housing units. One of these developments is the oLiv Madison apartment complex on Gorham Street, which is expected to be completed by fall 2024. The developer, Core Spaces, agreed to reserve 10% of the apartment building’s over 1,000 beds for affordable housing.

But Le of the Campus Area Neighborhood Association said students worry that the cheaper housing being built is not enough to keep up with soaring demand or stabilize housing prices for students who don’t qualify for financial aid but still struggle to find housing they can afford. 

“What I get from students who I talked to casually about the project is that it is nowhere near enough and that the qualifications for it miss a huge portion of students who are still in need of cheaper housing, even though they aren’t FAFSA eligible,” Le said. “They’ve even argued that because they’re not eligible for certain grants and loans it makes affording housing in the area even more difficult.”

Possible remedies in Madison

In March, the City Council voted to change Madison’s zoning code to allow more unrelated people to live in homes that were previously limited to single-family housing, upping it from two to five.

Govindarajan wants to further change zoning laws to allow the construction of denser apartment buildings in neighborhoods limited to single-family housing, particularly the blocks south of Regent Street and west of Camp Randall. This would allow developers to buy single-family lots up for sale to build multifamily housing units.

Though he expects to face opposition from some residents in those neighborhoods, Govindarajan said the change is needed.

The city also has a land banking program, in which the city buys lots it can then use to facilitate affordable housing projects, neighborhood revitalization and economic development. Because the land becomes city-owned property, Madison officials can mandate that developers include affordable housing if they wish to buy and develop those lots, increasing the supply of affordable housing in the area.

Govindarajan said a combination of “upzoning” single-family neighborhoods and increasing funding for the city’s land banking program could help increase the number of market-rate and affordable housing units. But these potential solutions would only start to make a difference in the long term, he said.

“It’s definitely going to be a very long time because the city of Madison is already so behind on housing in general that it would need to meet what it’s already behind on and continue to build (for) the influx of people moving in just to be able to break even, and then they should build even more to make sure housing goes down,” Govindarajan said.

“The point is not to just provide enough housing for everyone, but provide enough options in housing that tenants have the ability to negotiate prices rather than it just being a landlord’s market,” he said.

The university is also looking to build another dorm, but the state Legislature has not yet approved the construction of any additional residence halls, Dybdahl said.

To build additional residence halls, the university must get approval from the Legislature to issue a revenue bond to pay for construction. The revenue from student room and board fees, rather than increased taxes, would pay for any new dorms. 

“University Housing has been actively pursuing construction of a new residence hall to accommodate the growing demand,” Dybdahl said. “We are trying to move this process forward as quickly as possible, but approvals and construction will take several years.”

In the meantime, some students already are preparing to begin the frenzied search for housing for the 2024-25 academic year. Kollross, the third-year UW-Madison student, said he’ll start looking for housing in “probably September, October, right away.”

Bryce Dailey, a second-year consumer behavior and marketplace studies major, said he’s also preparing to start looking for housing soon.

“I will probably start looking for housing again in less than a month if I can,” Dailey said.