A recent article in the New York Times chronicled the journey of a young couple looking to move from Chicago to Madison in search of a more spacious place to raise their two young children at a lower price. The family was able to find a roomy home in a walkable neighborhood near downtown for $350,000, according to the article.

In December 2023 the median sale price of a Madison property ballooned to $395,000, a more than 15% increase from the year before, according to realtor.com. By comparison, relator.com says the median sale price of a property in Chicago is $315,000 — a difference of $80,000.

Additionally, the median sale price of a Madison home is $230,000 more than in Milwaukee where the median sale price is $200,000 during the same time, according to the same site.

There is a growing trend of high-income homeowners relocating to Madison, leading to increased competition among aspiring homeowners, according to an Isthmus article.

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Data from the U.S. Census Bureau shows 47% of Madison’s residents own their home, compared with the national average of 65%. Despite this, Madison has been experiencing strong growth in homeownership, which has been outpacing increases in rental spaces since 2019, according to Madison’s 2023 Housing Snapshot Report. Homeownership rates among Black, Asian and Hispanic residents has also experienced growth, according to the report.

But, the report found that most of this growth is concentrated among high-income earners and renters — creating an issue of supply and demand in the city.

District 8 Alder MGR Govindarajan said he is calling on the City of Madison to address the lack of affordable housing available to students.

Most students’ incomes are below the federal poverty wage and the shortage of affordable housing in areas near campus has made it increasingly difficult for students to find places to live, Govindarajan said.

Though Madison’s housing crisis could be alleviated by the construction of more units, it’s important to recognize that housing is not simply a supply and demand equation, Govindarajan said.

“What I’ve been really focused on beyond just building more housing is also ensuring that there is affordable and safe housing,” Govindarajan said.

During his term, which began in April 2023, the city has approved proposals for 2,000 new units of student-focused housing, totaling over 5,000 beds, Govindarajan said.

A household earning the median income in Madison is currently unable to afford a typical newly-constructed unit, according to the 2023 report.

The crisis has been developing for years as Madison’s population has grown by thousands without the necessary increase in housing units, University of Wisconsin Professor of Urban Planning Kurt Paulsen said.

“Over the last 15 years in Madison and Dane County, we’ve added a lot more jobs and a lot more households than new units,” Paulsen said. “We haven’t built enough for all the people who are moving here.”

Estimates from the Wisconsin Department of Administration show Madison is now home to 286,785 residents, marking an almost 5% increase from 2020.

The shortage of housing in Madison has been exacerbated by the close proximity of the UW campus with the city’s business and commercial center, Paulsen said.

“We’ve under supplied our market by about 1,000 units per year, meaning that people keep moving to Madison and jobs are created, but we’re not building housing fast enough to keep up with demand,” Paulsen said.

University enrollment has also grown by hundreds of students without the construction of additional dorms, Paulsen said.

Further, the price of construction materials rose by more than 35% during the pandemic, Paulsen said, adding that the recent spike in mortgage interest rates has also discouraged people from putting their homes on the market.

“To put it in perspective, the long-run solution to expensive housing in high-demand places is to build more housing, but all the new housing we build is really expensive because of construction costs,” Paulsen said.

To solve the ongoing crisis Madison needs to invest in not just more housing, but also a wider variety of housing that meets a greater range of needs, Paulsen said.

Studio apartments for students, small starter homes for young families and condos for senior living are all examples of housing types that haven’t typically been seen in development proposals, Paulsen said.

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After accounting for construction materials, safety mechanisms and labor, the typical mutli-family unit costs at least $360,000-$400,000 to build, as well as land, which is priced at $20-50 million an acre downtown, Paulsen said.

So, when searching for off-campus housing, students face difficulties stemming from Madison’s unique geographic and geometric features, Paulsen said.

Though the current picture looks bleak, relief is coming in the next few years, Paulesen said. Several residential and mixed-use buildings including units earmarked as affordable housing are in the planning stages of development or are already under construction, according to the Wisconsin State Journal.

“There’s thousands of units either under construction or being planned in the area,” Paulsen said. “But the challenge is that anything new is going to be more expensive because land and construction costs are high.”