Housing Strategy Committee outlines recommendations to increase affordability and supply

Madison continues to face housing challenges, with one of the lowest rental vacancy rates in the entire country and costs continuing to rise. The shortage of supply combined with high demand in one of the fastest-growing parts of Wisconsin means more Madisonians are spending higher percentages of their paychecks on housing.

As the City works to support more housing opportunities of all types, there is more work to be done. That is part of the reason why the Common Council instructed the Housing Strategy Committee to review the City’s 2021 Housing Forward Initiative and build on it by making recommendations to answer the following questions:

• How can the City support the creation of more ownership housing types?
• How can the City help scale up the development of new affordable rental units beyond the current 400 per year pipeline?
• How can the City support the creation of affordable student housing?

Over the last year, the Housing Strategy Committee focused on these themes, meeting with subject matter experts and local developers to inform recommendations made in its report which was recently presented to the Common Council.

The Housing Strategy Committee’s report supports many initiatives already underway, but also includes several new recommendations outlined here.

New recommendations to encourage more homeownership opportunities:

• Engage local developers, real estate professionals, and residential homebuilders to build capacity for new homeownership models, such as co-housing
• Explore what can be done to encourage “overhoused” homeowners to downsize to free up existing housing stock in the Madison market
• Explore infill opportunities for low density residential that results in net gain of units, including lot sub-division and single lot redevelopment
• Explore partnerships for manufactured and modular housing to be created in Madison
• Explore tools to curb the net loss of units as a result of new single-family home construction/replacements
• Work with the Wisconsin Realtors Association to revise State law affecting condominium conversions
• Advocate to WHEDA to provide financial support for condominium developments
• Encourage local lenders to ease financing restrictions (e.g., pre-sale requirements) for condominium developments

New recommendations to encourage more affordable rental housing opportunities:

• Pursue a regulatory framework that ensures high quality development outcomes without imposing unnecessary burdens on developers
• Establish performance and accountability measures around development review processes
• Explore ways for the City to streamline the scheduling and review of affordable housing development proposals
• Create pre-approved building plans for very small-scale developments that can be used by developers and property owners to help expedite the permitting process
• Explore and leverage partnerships with community technical colleges and trade programs to promote and prepare workers for careers in construction trades
• Advocate for state and federal funding for technical school recruitment and training for careers in the trades
• Beyond one-on-one technical assistance provided to the development community now, establish an annual or biennial workshop to inform new developers about opportunities to finance projects and details of the development review and permitting processes. Record all or portions of the workshop so it can be viewed on-demand.
• Consider policies to reduce the risk of pre-development costs for non-profit and BIPOC developers
• Hold an annual public hearing through the soon-to-be-created Housing Policy Committee, at which the City can invite developers to provide feedback on City approval processes for plans, funding, and operations and gather input on strategies to increase, preserve and improve housing

New recommendations to encourage more student housing opportunities:

• Change zoning and the Comprehensive Plan to eliminate any height limits more restrictive than the State Capitol view preservation
• Change zoning and the Comprehensive Plan to eliminate subjective approvals
• Allow developers to pay for outside consultants to pursue potential amendments to existing neighborhood plans to enable higher-density housing prior to adoption of a new area plan
• Allow flexibility of use in new housing developments so the product serves the entire Madison market and not just one subpopulation
• Encourage additional comprehensive market analyses in the greater downtown area to create and maintain a full and accurate inventory of student housing
• Identify potential alterations to development fees and regulations that, if adopted, could enhance housing affordability
• Encourage a comprehensive market analysis for Madison College students
• Encourage the City of Madison to work with UW-Madison on housing education programs with students

There is no single strategy that can – or should be – relied upon to increase the supply of housing available in Madison, especially for those with lower incomes (specifically, those making 30% of the Area Median Income, which is $26,540 for a single person or $34,000 for a three-person household).

These recommendations add to more than a dozen other Committee recommendations to continue a host of initiatives that are already underway or about to begin, from prioritizing the use of the City’s Affordable Housing Fund for projects that serve households earning less than 30% of the Area Median Income to making properties currently owned by the City available for affordable housing redevelopment opportunities.

You can find the full list of recommendations in the report that has been uploaded to Legistar.