Freepik
Last month the Madison city council struck a blow for more affordable housing. Unless they struck a blow to affordable housing. It’s too early to tell.
If you haven’t been downtown recently then you may not have seen the beautiful urban canyon that has developed at the curve where Gorham Street transforms itself into University Avenue. (I’m not being sarcastic. I really do find that streetscape appealing.) A bunch of student high rises have popped up there in recent years, some of them built by a Chicago outfit calling itself Core Spaces.
This stuff is mostly high-endish for students. That’s fine by me. When I was in school I lived for a semester in the old Ogg Hall, which was designed by a prison architect in a surly mood. It was deconstructed a few years ago and that was a shame because the university could have made a bunch of money from Ogg Hall refugees who, despite their experience in the gulag, still found a way to make a bundle of money after graduation and who would have paid a ransom to push a plunger and watch it implode.
I like it that students are living better these days. So, I thought it was a good thing when Core Spaces proposed another 12-story building with 232 units of market rate housing at the corner of Dayton and Johnson streets. But the council did not think it was so great and they voted it down 13-6.
That came as a shock to just about everybody as the project had received unanimous approval from the committees and staff that reviewed it. It also came as a surprise to long-time downtown Ald. Mike Verveer, who is a lawyer and who warned his colleagues that they may well have overstepped their authority. State law preempts rent control and it sure looked like the council’s vote amounted to just that.
The majority said clearly that they were voting against the project because they wanted to see the developer include units that were more affordable. One way to look at this is that it will work in the opposite direction. Smart Growth Madison, a developer group, warned that this will chill development in the city, making the city’s housing crunch worse and putting even more upward pressure on rents.
I don’t think so. The Madison market is so hot and potential profits so large that I don’t think spitting in the eye of a developer will make much difference at all. Core Spaces will either go to court to get its approval or, more likely, it will make some modest adjustments and come back to the council.
And this is a council that has actually made great progress in approving more housing. A couple of years ago the council passed an ordinance allowing larger residential infill projects to be approved at the staff level. Then in March the council flicked aside an historic preservation challenge to a large project near Tenney Park. And after that the council passed an ordinance allowing greater densities along the new bus rapid transit lines.
All these actions had the effect of making it harder for neighborhoods to kill or downsize projects. This represented a tectonic shift in Madison politics. When I was mayor, over a decade ago, there was no way the council would ever stand up to neighborhoods like this.
And even before these things have had a chance to make their impact, the city has been responding to the challenge. In three years, from 2020 through 2022, the city approved 12,000 units of multi-family housing compared to about 5,000 in the previous three years.
So, I read the Core Spaces flap as an exception to an overall positive change in the council to fight for lower housing prices by simply approving more housing. If there’s an iron rule of real estate it’s that developers will eventually over-produce whatever is selling right now. The laws of supply and demand will kick in and rents will come down.
And this is coming from a guy who championed inclusionary zoning back in 2003. That program, which I truly believed in at the time, just didn’t work and it was sunsetted a few years later. Since then I’ve lost my enthusiasm for government interventions. I like the market.
And yet I also believe that, as long as the council backs off in the face of legal reality, their action last month sends a worthwhile message to developers that they will have an even easier go of it if they just try a little harder to include affordability.
I’m a free market guy and yet I find myself liking what the council did. As long as more housing gets built in the end, there’s no harm in sending ‘em a message.
Dave Cieslewicz served as Madison mayor from 2003 to 2011. He blogs at Citizen Dave and Yellow Stripes & Dead Armadillos.
