Growing up: Madison’s decade of rapid growth

Madison Rapid Growth

MADISON, Wis. — Year over year in the last decade, Madison has added hundreds of new housing units to try and keep up with a population that grew by 16% between 2010 and 2020.

In about half of those years, newly-permitted units, the vast majority in large, multi-family-home buildings, reached about 2,000 a year. But in a city where many continue to struggle to find or afford their homes, housing development still struggles to keep pace with the city’s best decade for growth in recent memory.

“Frankly, our housing supply did not keep up with that,” mayor Satya Rhodes-Conway said. “That’s not a sustainable situation.”

One of the Midwest’s fastest growing cities

After decades of steady but not spectacular growth, Madison was poised for a change near the turn of the decade. The city added more than 36,000 residents in the last decade, according to the latest U.S. census data.

That growth, of course, is not limited to the city–in fact, its suburbs have grown at faster rates than the city itself in the 1990s and early 2000s.

While 21 counties including Milwaukee lost people over the past ten years, Dane County did the opposite–putting up a 15% population increase, the largest in the state. There’s no sign of that trend reversing: the Capital Area Regional Planning Commission has prepared forecasts that reflect the county potentially adding as many as 200,000 people over the next thirty years.

“Managing growth to accomplish those objectives brings particular challenges,” Steve Steinhoff with the CARPC explained. The commission helps local municipalities plan land use in a way that aligns with shared goals as part of the Greater Madison Vision: things like planning for environmental impact, complete neighborhoods, business development, and equal access to opportunities for all.

In the heart of the county, the biggest change in the city of Madison has been its downtown, isthmus, and campus growth. While its western edge in particular continued to post substantial increases as well, it’s the corridor at its heart that has experienced the most dramatic shift in growth trends.

“What we’re seeing is really tremendous growth,” Rhodes-Conway said.

Growing up, not out

For many, finding a home often has less to do with choice and more to do with a balancing act of availability and affordability.

Around the beginning of the decade in 2010, large multi-unit housing in Madison started taking off. After the 2008 recession, fewer people could afford single-income homes and lending standards tightened, Steinhoff said. Outlying suburbs were slower to respond with their zoning to accommodate that kind of growth, pushing some of the development into the city instead.

Before 2010, growth in the city had been slower than in the suburbs in recent decades. Starting in 2010, Steinhoff said, “Suddenly, you’re seeing a much different picture.”

Data from Madison’s planning department underscores that reality: In 2020, new housing units in large apartment buildings outnumbered new single-family homes at a rate of nearly 5 to 1.

Visually, the changes downtown are obvious, seen along East Washington Avenue with towers like the Galaxie and Constellation buildings. The number of new apartments in 5+ unit dwellings rose by almost 400% from the first to the last year of the decade: 352 new units permitted in 2010; 1,737 new units in 2020.

Looking into the future, the city of Madison’s planning division director Heather Stouder says that growth will continue focusing upwards rather than outwards, now that the city is running out of room to expand given the outlying suburbs like Sun Prairie, Fitchburg, Middleton, Verona and Monona.

Some outward growth is still happening on Madison’s eastern and western edges, but for the most part, the growth is reflected in the areas where the only place to go is up: most often, the isthmus.

“That end is in sight to our eastern and western growth,” Stouder said. “We’re running into other existing municipalities.”

The vast majority of housing development in the city now focuses on what the planning industry calls infill and redevelopment: demolishing smaller buildings or surface parking lots to build taller, multi-use buildings with scores of housing units in their place.

“If you look at just the last five years of development approvals, two-thirds of those have been on infill sites,” Stouder explained. “In many ways it’s also more efficient, because existing urban surfaces are there. Water, sewer, streets, transit routes, etc.: all the ingredients that make places a great place to live.”

Missing middle: city efforts to increase single and small-unit homes

It’s unlikely that the trend of apartment buildings with 50 or more units will change in Madison in the near future–especially since city leaders plan to continue encouraging them as a way to address the constant housing shortage.

But the city is working to address an adjacent problem: the missing middle.

In development, the “missing middle” refers to small apartment buildings or multi-unit homes, with 2-8 units. They may be preferred by people starting out who can’t yet afford a mortgage payment, or want a different quality of life than they can get in larger buildings.

More than 80% of the housing units in the past decade were multi-family, built mostly downtown or in the far-east and far-west perimeters of the city. Of those, 90% of the buildings had more than 50 units.

“We just aren’t seeing smaller multi-unit buildings being built,” Rhodes-Conway said. “That’s that mythical missing middle that’s not happening.”

Building permits for single-family homes in Madison rose by 86% between 2009 and 2020, according to data provided by the city of Madison. But put in other terms, the city has seen about 360 new single-family homes constructed every year since 2016, only up from around 150 new homes a year between 2009 and 2012.

A similar story for small apartment buildings of between 2 and 4 units: in 2009, the city issued permits for 12 units in smaller dwellings. In 2020, it issued permits for 76 units.

The neighborhoods affected by the “missing middle” are those where bigger buildings just don’t belong. Rhodes-Conway describes it as the “donut” around the downtown area, where neighborhoods are filled with predominantly single-family homes that haven’t seen much development in two or three decades.

“That’s the places I think we need to start looking at,” she explained. “Can we encourage accessory dwelling units? Can we encourage more 2-3-4-flat buildings? Can we encourage townhouses?”

Housing solutions have been a core element of her platform as mayor, and a main driver for her to campaign for the office to begin with. The changes have already begun; the city successfully streamlined some of its zoning rules last summer so developers could leapfrog red tape under certain circumstances.

Last fall, the same reasoning motivated an initiative to make it easier to develop “granny flats”, or smaller dwellings on properties already occupied by a single-family home.

Now, Rhodes-Conway is looking for her next big solution to one of the city’s biggest problems. Other cities have created pre-approval processes for developers, she said; maybe Madison will consider it as well. Separate from the city’s affordable housing fund, the Housing Forward fund is dedicated to just that: developers with a creative housing solution.

“It’s been, I think, traditionally complicated to build housing in Madison. We are going to need to get past that as a city and as individual neighborhoods,” Rhodes-Conway said.

“We are going to have to start embracing the prospect of having new neighbors, and the prospect of increasing our housing options in our neighborhoods so that we can prevent this runaway housing crisis where prices just keep going up and up and up.”