Under unanimous approval from the City of Madison’s Finance Committee, the city will work with the University of Wisconsin Office of Student Financial Aid to determine student eligibility for affordable housing in a possible new development of 405 W Gorham St., according to District 8 Ald. MGR Govindarajan.
To achieve final approval, the project must be passed by both the city’s plan commission and common council.
“It will go in front of the Common Council where it will get final approval I believe on Nov. 21,” Govindarajan said. “I believe it should be finished by Summer 2027.”
According to a city development proposal, 13 residential buildings on the 400 block of W Gorham St. would be demolished to in order to construct the high-rise apartment building containing approximately 450 units, projected to be between 8 and 14 stories tall.
Under the proposal for student affordable housing, 10% of the beds would be given at a 40% discount to students deemed eligible by the Office of Financial Aid, Govindarajan said.
According to Govindarajan, getting the affordability agreement from the developers took a lot of work.
“The way we get an affordability agreement is we have the developer agree to it voluntarily — if they don’t want to deal with it, then they don’t do it,” Govindarajan said. “There is also worry that if the developers decide to sell, then the new owners can decide to get rid of the affordability model.”
An original agreement stated the affordability models would stand for 30 years, but Govindarajan worked to extend this agreement.
“I sat down with the developers, and after a couple tough days of negotiating, we got the agreement to say that they’re going to have it for 40 years, even if they sell it the new company has to keep it,” Govindarajan said.
If the buyer decides to get rid of the affordability model despite the agreement, the city could either sue the company, or collect $8 million, which would go straight into the affordable housing fund. Prior agreements had a collection fee of $5 million, which Govindarajan negotiated higher.
This development is one of three affordable housing projects occurring in Madison with similar natures, Govindarajan said.
The city has already approved affordable housing agreements, including Oliv Madison — a 10 story construction project on the intersection of W Gorham St. and N Broom St. set to open Fall 2024, where 10% of the units will be given at a 40% discount to students who qualify for affordable housing, and the affordability agreement will last 30 years, according to Govindarajan.
If passed by the city, this additional development will be built where the current State Street Garage is located. Its affordability program will differ slightly from the other two developments, where the costs are expected to be lower, but prices and the percentage of units that will be reserved for the program are yet to be finalized, Govindarajan said.
Editor’s Note: This article was updated Oct. 28 to clarify the status of the affordability agreement and the previous approval of Oliv Madison.
