The 5.74 percent apartment-rental vacancy rate in Madison, the highest vacancy rate since 1999, is likely to force landlords to stabilize increasing rents or even lower prices, according to city officials.

“It’s positive for students because the prices are going down and landlords and management companies are going to have to compete and take care of their buildings,” said District 5 Ald. Robbie Webber, whose district includes the west end of campus and the west end of the Lakeshore Residence Halls.

Webber said she attributed the vacancy rates, which were published earlier this month by Madison Gas and Electric, to the market cycle of supply and demand and said the rates were not very unusual.

In addition, Webber said the increased vacancy rates are due to the increase in downtown apartment buildings being built, primarily suited for students who move every year or two.

“[The apartments] are just another product; if everyone makes one, the price goes down,” she said.

Webber’s district includes the 53705 area code, which Madison Gas and Electric said has 530 vacant apartments of 5,146 total apartments, resulting in a vacancy rate of 10.34 percent, one of the highest rates in Madison.

“It’s possible the apartments are not in such good shape and are not wanted anymore,” Webber said.

As a solution, Webber said she would like more houses with two, three and four units to be purchased by people who are actually going to live there rather than being maintained by management companies.

“If people buy the houses and put their own sweat equity into them and rent out the other units and live there, they are going to take better care of it,” she said.

City Council president Ald. Mike Verveer, District 4, said he agrees the vacancy rates will benefit students by stabilizing rents and forcing “slum lords” to make improvements on their apartments.

“These lazy landlords are now facing the economic consequences of sitting on their hands. If they want to remain competitive they are going to have to invest in their property,” he said.

For landlords and for the city, however, the disadvantage of rental vacancies is that property owners are not generating as much income, which is taken into account during yearly property assessments, and a lower assessment means less tax base for the city.

Nevertheless, Verveer said he is confident the historically low interest rates will continue to entice landlords to develop downtown.

“It’s a huge motivating factor, that they can secure construction, loans and mortgages and very low interest rates,” he said.

The Tenant Resource Center Program Director Megin Hicks said she has several landlords currently offering special offers such as lower security deposits or the first month’s rent free.

Hicks also said that, while prices do fluctuate throughout the year — most noticeably during the peak student rental season from the end of first semester through spring break — overall prices are declining from last year.

According to the Tenant Resource Center, the average two bedroom in Madison cost $777 for 2003, compared to $741 in 2002 and $685 in 2001.