By Olivia R. Williams

Ask any long-time resident of Madison how the city has changed in the last 10 years and they’ll tell you about the number of highrises that have shot up along East Washington Avenue, the rapidly rising rents, and the growing number of tech employees pushing up costs for everyone else. 

Madison — like many popular cities — is seeing a growing problem: the lack of affordability for working-class people. According to the City of Madison, the cost of housing has risen significantly. In 2009 the average rent for a one-bedroom apartment was about $700, and in 2018 it was about $1,150. That’s a 61% rise in rents over nine years, where it would have been just 17% if rents increased with inflation. More than half of Madison’s renters are “rent burdened” (paying over 30% of their income on housing) and about a quarter are “severely rent burdened” (paying more than 50% of their income on housing). 

At the Mayor’s Neighborhood Roundtable discussion last fall, the housing problem was highlighted with interesting data and an engaging Q&A period. But I was disappointed to see that the event’s housing sessions primarily focused on building enough housing for a growing population, with the proposed solution being to encourage infill development of a diverse range of housing types (apartments, single-family homes, duplexes, etc.). Embedded in this focus is the assumption that more housing will drive down housing costs to everyone — a simple supply and demand.

But recent studies show that this assumption doesn’t hold up. Instead, developers are creating more luxury housing and landlords are demanding higher rents, even if people generally can’t afford it. In the last 20 years, new housing construction has focused on the higher end of the spectrum while renters’ wages have stagnated. As more luxury housing is built, the value of surrounding land increases based on how much a landowner could theoretically make from the units on a piece of property. Selling or renting below the “market rate” then becomes irrational, so real estate professionals (realtors, appraisers, and property managers) actively discourage it. The result is that land prices and rents are still on the rise, and almost half of the renters in the U.S. are rent burdened.

So it’s not just Epic employees inflating the cost of housing; a confluence of factors is driving up the cost of housing everywhere. A big reason for the upward trend in land costs is that there’s a fixed supply of land, so unlike other commodities, land doesn’t comply with simple supply-and-demand economics. With other parts of the economy sitting on shaky ground, land is a “good” investment, a better place for the 1% to put their equity than in a bank account. The return rates for luxury housing developments are promising; and as rents go up, more low-income people are submitting to being rent-burdened. That doesn’t make it okay, but what’s the other option for a working-class renter — homelessness?

A series of resistance movements are emerging across the U.S. to demand rent freezes, rent control, permanent affordability and community land ownership. And they’re making headway. Just a few months ago, California passed a state rent control law to keep the price of rents from growing too quickly, and New York City has dedicated millions for leadership development and technical assistance to community land trusts to take land off of the speculative market permanently. 

Madisonians need to emulate these efforts to form a united front against the rising costs of land and housing. Housing is already expensive, but it will only get worse unless we build our grassroots capacity now to demand a more just economic path forward. The Northside will be one of the areas of Madison feeling this squeeze on housing prices the most in the coming decade as real estate companies take advantage of the ripe opportunities available for redevelopment. The time is now to push for a future where housing is a human right and land is kept affordable for generations to come.