Editor’s Note: This article has been corrected to reflect that The City of Madison’s housing fund supports non-student, low-income housing.
The City of Madison 2025 Housing Snapshot report found that demand still outpaces the progress of leading housing expansion efforts in Madison, contributing to the persistence of high housing costs in 2025, according to its website.
The Department of Planning, Community and Economic Development conducted the report to gauge the success of City of Madison programs, community partners and housing developers in addressing struggles in the housing market, according to its website.
Report co-author and DPCED administrative services manager Heather Stouder said she worked with her department’s housing policymakers and program developers to build on data from the 2023 Housing Snapshot for the new report.
“We recognize that younger households are a huge part of our growth in Madison,” Stouder said. “Student housing, while there’s a lot of it being built, it’s quite expensive. [It’s] important to work with the development community and UW to help solve that problem.”
UW affordable housing expert Kurt Paulsen said Madison will never be fully alleviated of housing pressure due to the geographical constraints of being a capitol city with a university and two hospitals on an isthmus.
Most of UW’s 50,000 plus student body want to live within a one to two-mile radius of campus, Paulsen said. The workforce population is also growing, especially within the tech sector and hospitality employees.
“Within this kind of limited geography, which also includes lakes and a capitol height limit … you have both students and workers and retirees and families all wanting to live in the same area where there’s lots of jobs,” Paulsen said. “You’re not going to see rents go down that much, just because there’s still strong housing demand.”
The city of Madison is, however, a national leader in deploying its resources to build more affordable housing, according to Paulsen, particularly within its transportation hubs.
Promoting housing near the city’s transit lines allows students and other young and/or low-income people to alleviate financial constraints that might otherwise prevent them from living close to campus, Stouder said.
“It’s hard to have a car here in Madison as a student. UW, rightly, I think, doesn’t have a lot of parking available,” Stouder said. “We need to make sure that students have the opportunity to live near really convenient transit and biking and walking as well.”
The city has negotiated with housing developers to allow additional floors beyond the capitol view preservation limit, provided the buildings do not exceed the height limit and developers commit to keeping a number of beds affordable for students who qualify based on their income, Stouder said.
The capitol view preservation limit is a state statute that limits buildings constructed after 1990 within one mile of the Capitol building from exceeding 1,032.8 feet above sea level, according to the state legislature.
“From 2024 through approximately 2028 or 2029, 10,000 student-focused housing beds have come online or are approved but not yet constructed,” Paulsen said. “There’s three that are scheduled to come online in this year, in 2026, so that’s over 1,000 beds.”
These buildings have been approved as a result of capitol view preservation negotiations, meaning they’ll house more students overall and set aside subsidized housing for low-income students, Stouder said.
Madison’s affordable housing fund contributes to protecting housing primarily intended for low-income, non-student households so that a portion of new apartments remain income and rent controlled, Stouder said.
A factor contributing to the rising costs and scarcity of private student housing at UW is the growth of high-income young professionals in their 20s in Madison, Paulsen said.
Many entry level positions in Madison pay young — often single — professionals around $100k depending on the field, according to Stouder.
“If you’re spending 30% of your income or less on housing, it’s considered to be affordable,” Stouder said. “Even though we’re seeing a lot of apartments being constructed, there’s still a market for more. There’s far fewer apartments that cost 30% of these high-income earners’ incomes than there are households.”
The high-income earners renting down sometimes prefer to do so for lifestyle reasons, Stouder said, but it’s more likely they are unable to find other housing that suits their needs that costs 30% of their income.
Many young professionals also rent down while saving for a down payment on their first home, according to Stouder.
“For those who might want to move into the ownership realm, it’s extremely difficult,” Stouder said. “I moved to Madison 25 years ago now and I can say that the cost of an entry level home back then is pretty similar to the cost of just a down payment today on a median income or a median value home.”
Madison is seeing a minimal movement in its housing market, particularly with older households who haven’t downsized, often due to a lack of appropriate options, according to Stouder.
Older generations staying put in larger homes limit options for established families to move into, leaving fewer starter homes for young professionals and, in turn, fewer options for students, Stouder said.
Some of the city’s largest growth since 2015 has been within young households, according to Stouder, with the 2025 Housing Snapshot reporting that Madison added 9,500 new households under 35. Just over 100 of those households were homeowners.
Homeowners have also lost significant purchasing power since 2015 and ownership vacancy rates have been unhealthy since 2016, according to the report.
“It takes a community, it takes investors, developers, nonprofits and much more to really impact people’s lives around housing in a positive way,” Stouder said. “We’re proud of a lot of the policy and financial work that the city’s done to support housing, but recognize that there’s still a really long way to go.”
