Turns out, there haven’t been enough.
According to Matt Wachter of the city’s planning and development department, Madison would have to add more than 1,000 apartments a year, indefinitely, to keep up with current demand. And that wouldn’t even begin to address the low vacancy rates that have plagued the city for years and give landlords the upper hand.
“I just want to underscore the importance of anticipating growth. We’re a growing city, we’re a growing economy,” District 10 Ald. Maurice Cheeks said at last week’s City Council meeting, citing Epic Systems’ addition of 2,000 employees just this summer. “The likelihood that we are going to overbuild in the immediate future seems rather low.”
A finalized market rate rental housing report found four main factors driving the high rental demand: more rapid population and household growth, growth primarily in the ownership-averse 25-34 age group, a reversion to historic lower rates of homeowners and an overall shift in preference among other demographic groups toward renting.
That includes the high-income bracket, a group Wachter said would have bought houses at any other point in time.
Part of the higher income rental influx comes from Epic, where about 65 percent of employees surveyed rent. That compares to employers like Madison College and City of Madison, where only about 17 percent of employees surveyed rent.
Vacancy rates dropped from a healthy 5 percent in 2006 down to just above 2 percent in 2011, 2012 and 2013.
“That shifts the power to landlords,” Wachter said. “And the result of that is that our most vulnerable renters get squeezed out of the market because they’ve got a bad rental history or a criminal record or things like that.”