Madison Reporter

The City of Madison Common Council approved a change to the city’s zoning code Tuesday night to expand the existing downtown affordable housing incentive for college students.

The Common Council adopted the original downtown affordable housing height incentive last year. The incentive allowed developers to exceed the maximum number of stories permitted in the downtown area, while staying under the maximum height in feet, in exchange for an agreement with the City to guarantee a portion of the extra units would be affordable and rented to those making 60% or less of the Area Median Income. To qualify, developers had to either use at least half of the additional space for affordable units and maintain that affordability for at least 30 years or negotiate affordability terms if they were receiving financial assistance from the City.

While some developers have already utilized this incentive, a further change was needed to accommodate housing designed for students. Students often pay for housing through loans, grants, and family assistance, making them ineligible for most housing programs. Additionally, since most students rent by bed rather than by apartment unit, the existing height incentive did not align with student housing needs.

Without support from college or university staff, tracking income levels of families across various regions is challenging. The ordinance change still requires property owners using the height incentive to enter into a Land Use Restriction Agreement with Madison to guarantee below-market-rate housing for a set period.

A local college or university will refer low- to moderate-income students to property owners renting these affordable units. This ensures that those needing affordable housing receive it. Furthermore, qualifying students can rent a bed or bedroom at reduced rates alongside non-qualified students paying market rates within the same apartment unit.

A recent study commissioned by Madison and UW-Madison found that average rent near UW campus is $1,273 per bed per month; newer buildings average $1,575 per bed per month; properties within one mile of campus average $1,746 per unit. Rentals near UW campus have a 98% occupancy rate as enrollment increases. Student surveys indicated 27% share bedrooms to save on rent. The study recommended continued density bonuses and tax incentives for developing more affordable units.

With this zoning code change now in place, Madison will continue collaborating with UW-Madison to support creating more off-campus affordable units for students.