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What are other externalities (positive or negative) you think arise from affordable housing?

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Market Failures in Housing

The housing market in Madison is a classic example of market failure, where the private sector fails to meet the demand for affordable housing for low-income households.

Private developers often focus on building luxury or higher-end housing to maximize profits, leaving a gap in affordable housing supply. This gap results in underserved populations who cannot access housing at reasonable prices.

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Negative Externalities of Housing Shortages

A lack of affordable housing leads to

Homelessness → Higher public costs ( higher demand for healthcare, shelters).

Housing insecurity → Reduced productivity and well-being.

Positive Externalities of Affordable Housing

Health and education improve.

Lower crime, higher civic engagement.

Economic benefits: Stable workforce, reduced public costs.

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The city’s $10 million investment in affordable housing seeks to address these externalities by increasing housing options for underserved populations. This move aims to correct the market failure by subsidizing housing development that the private sector would otherwise overlook.

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Market Power and Housing Supply

Landlords and developers often have disproportionate market power, allowing them to set higher rents and prioritize profits over accessibility.

Supply constraints, due to zoning laws or high construction costs, prevent the market from reaching equilibrium.

Government Intervention and Disequilibrium

The $10 million investment acts as a price subsidy, disrupting the natural equilibrium to address the shortage of affordable housing.

The intervention challenges the standard model’s assumptions of perfect competition and self-regulating markets.

Persistent Disequilibrium

Even with government funding, the gap between supply and demand may remain because of long development timelines and rising population pressures.

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The equilibrium point reflects the natural intersection of supply and demand before any government action.

Supply is limited, creating affordability issues.

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The supply curve has shifted outward due to the $10M investment, increasing the quantity of affordable housing.

This shift reduces the gap between supply and demand but does not completely eliminate it.

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Unintended Consequences

Gentrification → Rising rents, displacement.

Infrastructure strain → Schools, transportation.

Funding Limitations

The $10 million may fall short of meeting actual demand, creating perceptions of favoritism or inequity in housing allocations.

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Proposed Solutions

Partner with non-profits for resource efficiency.

Zoning reforms → Mixed-use developments.

Awareness campaigns → Educate residents.

Monitor progress and adjust policies.

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What do you think is the biggest barrier to accessing affordable housing information

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What do you think is the biggest unintended consequence of investing in affordable housing?

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Main stakeholders: low-income residents, the City of Madison, developers, landlords, local businesses, and taxpayers.

Low-income residents will benefit from more affordable housing options, reducing housing instability.

The city gains a more stable community, which may lower public service costs.

Developers receive tax credits and subsidies but must meet affordability standards.

Landlords may face more competition, though they can benefit from government incentives.

Local businesses and taxpayers could see economic benefits, though taxpayers bear the upfront cost.

Students are excluded from this program but addressed through separate student housing policies.

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Positive Analysis: The policy will result in the creation of around 275 new rental units. These units will be available to individuals earning at or below 60% of the county’s median income, with 20% reserved for those earning 30% or less.

Normative Analysis: The policy reflects a commitment to equity by prioritizing low-income households, seniors, and families transitioning out of homelessness, ensuring they have access to stable, affordable housing.

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Policy is efficient in addressing the supply-demand imbalance by increasing affordable housing, though more funding is needed to fully meet demand.

Promotes equity by focusing on low-income households but excludes students, which aligns with the policy’s goals.

Low-income residents benefit, while developers may face more competition but are compensated with incentives.

Policy is effective but may need scaling to fully resolve the housing crisis.

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Madison should increase the Affordable Housing Fund to meet growing demand and consider creating more affordable student housing for undergraduates.

Offering mixed-income development incentives would promote social integration.

To prevent rising rents in surrounding areas, rent control measures or landlord incentives should be considered. Lastly: ensuring strong tenant protections would provide stability.

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A large and growing population is shifting the demand of housing to the right

Through Madison's $10 million investment and Low Income Housing Tax Credits, four new affordable housing projects are funded, increasing the housing supply

The low vacancy rate shows how the market is in disequilibrium

At the start of 2023, Madison’s vacancy rate, the percentage of unoccupied available units, was 2.5%, far below the 5% considered “healthy”

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Government Intervention in Markets

Madison's $10M investment subsidizes affordable housing, addressing market failures and increasing supply.

The intervention shifts the supply curve but disrupts market equilibrium, challenging free-market assumptions.

Elasticity of Supply and Demand

Housing demand is inelastic as it’s a necessity, with minimal change despite price fluctuations.

Housing supply is inelastic short-term due to construction delays and zoning restrictions.

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Externalities: unintended side effects. Positive externalities in affordable housing (reduced homelessness) & negative externalities (land use changes, displacement).

Ex. Vintage was set to close to put up housing and the community had very negative feelings towards this

Inequality: unequal access to resources. Financial barriers like security deposits preventing stable housing.

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Community rallies around Vintage Spirits and Grill as it faces possible closure

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MADISON, Wis. -- The Madison community is rallying behind a beloved downtown staple that’s in danger of closing.

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Population growth increases housing demand

Demand shifts up/right

Rightward demand shift increases equilibrium price and quantity, introduces deadweight loss

Decrease consumer surplus

Rising costs exacerbate affordability issues for low-income residences

Increase producer surplus

Suppliers benefit from higher prices

Deadweight loss represents inefficiencies

Unmet demand, shortages

Need for policy interventions

$10 million investment in affordable housing increases housing supply

Shifts supply curve to the right to meet housing needs

Equilibrium balances

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Elasticity of Housing Demand and Housing Supply

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Housing demand is inelastic

Housing is a necessity with few substitutes

Figure 2:

The quantity of housing demanded is not largely impacted by a substantial price increase

Inelasticity exacerbates the consequences of limited affordable housing

Figure 3:

Even with significant increases in funding, only a small increase in the quantity of housing supply is observed

Barriers include construction timelines, land availability, incentives, etc.

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How Madison's $10 million investment aligns with the equilibrium model of affordable housing

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These articles discuss the city’s $10 million investment in affordable housing and the rapidly rising rent prices. A large and growing population is increasing the housing demand. The city's investment along with Low Income Housing Tax Credits aim to increase the supply of affordable housing to restore the market equilibrium.

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Affordable Housing Project Proposal in Madison

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1. Investment Details:

Amount: Nearly $10 million invested in affordable housing.

Goal: To add 250 units of affordable rental housing.

Target Demographic: Developments must designate at least 20% of units for households making 30% of the Area Median Income (AMI) or less.

2. Strategic Objectives:

Increase Supply: Address the shortage of affordable housing units.

Preservation and Improvement: Ensure the sustainability and quality of affordable housing.

3. Broader Impact:

Economic Benefits: Potential for long-term cost savings for lower-income households.

Social Benefits: Improved living conditions and reduced housing insecurity.

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Affordable Rental Housing Development: Tax Credit Request for Proposals (RFP) 2014

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Affordable Rental Housing Development: Tax Credit Request for Proposals (RFP) 2014

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1. Introduction of the Affordable Rental Housing Development:

Tax Credit Request for Proposals (RFP): A new process introduced in 2014 to boost affordable housing.

Affordable Housing Fund: Used to finance the initiative and support the development of affordable housing.

2. Annual Process:

Frequency: Held annually since 2014.

Support for Development Teams: Provided gap financing loans to development teams seeking Low-Income Housing Tax Credits from the Wisconsin Housing and Economic Development Authority (WHEDA).

3. Policy Objectives:

Increase Supply: Similar to the 2024 goals, the 2014 initiative aimed to increase the number of affordable housing units.

Facilitate Development: Helped developers bridge financial gaps to make affordable housing projects viable.

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1. Investment Amount

2. Affordable Units

3. Income Target

4. The Process

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The standard market equilibrium model assumes

perfect competition, where no single entity controls prices

perfect information, where all participants have full knowledge of the market.

However, these assumptions don’t hold true in the housing market.

landlords and developers often wield market power, allowing them to set higher rents.

imperfect information prevents many residents from making informed decisions about their housing options, further skewing the market away from equilibrium.

influenced by external regulations, such as zoning laws, which restrict supply and prevent the market from self-correcting.

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Low vacancy rates give landlord's the power to raise rent prices, adding uncertainty and making budgeting and long-term planning difficult

Landlords face uncertainty of tenants paying rent on time and if proper care will be taken of their units

Security deposits mitigate moral hazard with a safeguard against damages and unpaid rent

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The City of Madison is investing nearly $10 million to expand affordable housing options.

This investment will support four new housing projects.

A total of 167 affordable units will be added to the city's housing stock.

Projects are located on the city's north, west, and east sides.

Focus is on serving households earning at or below 60% of the county's median income.

Developers are expected to follow tenant selection policies that do not exclude households with past eviction, bad credit, or criminal involvement.

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The City of Madison has allocated $9.85 million from its Affordable Housing Fund to support the addition of four new affordable housing projects.

The four projects include the Merchant Place Senior Apartments on the West Side, East Washington and 7th Ave. on the East Side, CORE on Dryden and United Residences on the North Side, according to the Wisconsin State Journal .

Director of Madison's Community Development Division Jim O'Keefe discussed what the term "affordable housing" means.

"When we use that term, we're talking about housing that is to serve households earning at or below 60% of the county's median income," O'Keefe said.

In Dane County, for a single person, 60% of the county's median income is about $53,000 and for a three-person household, it's about $68,000, O'Keefe said.

Additionally, the Community Development Division insists to developers that at least 20% of new units be set aside for even lower income households earning around 30% of the county's median income, O'Keefe said.

For a single person, 30% of the county's median income is about $27,000, and for a three-person household, it's about $34,000, O'Keefe said.

The Community Development Division is committed to ensuring developers adhere to the city's tenant selection policies , O'Keefe said.

"We want to make sure that they aren't excluding households that may have more difficulty getting housing," O'Keefe said. "We ask them to work with tenants that have a history of eviction, bad credit or criminal involvement. We don't want people in those situations to be categorically excluded from housing."

University of Wisconsin professor of urban planning and expert on affordable housing Kurt Paulsen said the city plans to invest in affordable housing with an emphasis on proximity to transit, grocery stores and schools. Also, they plan to leverage the Federal Housing Credits with the city's funds.

Federal Housing Tax Credits, allocated by , are used to fill the monetary gap in value for developers making affordable housing, Paulsen said. A housing developer will apply for tax credits and state their plans for the building. They then apply to a competitive program that runs once a year. If they are granted the tax credits, the developers then sell the credits to an investor and use the proceeds to build the development, Paulsen said.

Additionally, any development project that receives city funding is required by the Community Development Division to keep their units affordable for a minimum of 40 years, O'Keefe added.

Any affordable housing development in Dane County would have been impossible if not for the Low Income Federal Tax Credit Program, O'Keefe said.

But, the tax credits aren't enough to fill the gap in equity, which is where the City of Madison steps in with the Affordable Housing Fund. This process is commonly referred to as gap financing, Paulsen said.

"You really cannot build new affordable housing without some large subsidy program, and the Low Income Housing Tax Credit is the largest supply side subsidy program," Paulsen said.

Leveraging Low Income Federal Tax Credits with the Affordable Housing Fund has been central to the city's strategy, and will continue to be, Paulsen said.

Additionally, for the first time the Affordable Housing Fund is being used to fund maintenance and preservation of existing affordable housing outside of the tax credit program, Paulsen said.

"Madison is about as innovative and dynamic as any other city in the country, and they are maximizing all of the tools they have," Paulsen said. "But, there are just a limited number of tools in the toolbox."

District 8 Alder MGR Govindarajan discussed who the Affordable Housing Fund serves to benefit, and who is excluded from benefitting.

"We use this fund to provide senior housing, low income housing, transitionary housing, housing for people experiencing homelessness and then heading out of homelessness, and families." MGR said. "Students are not qualified for this 98% of the time, but this fund allows us to invest in the remainder of Madison's community."

The Low Income Housing Tax Credit program does not allow undergraduate students under the age of 26 to live in their units unless their parents are the renters. In terms of federal policy and taxes, undergraduate students under the age of 26 are considered adult dependent children, meaning they cannot independently receive federal benefits, Paulsen said.

There are exceptions to this, including if the student is married and has formed their own independent household, has a child, is disabled or is a veteran, Paulsen said.

The Affordable Housing Fund has existed since 2015, and the mayor and city council have been consistently increasing its budget over time, MGR said. But, the fund was never intended to serve UW students.

The City of Madison has introduced other policies intended to benefit students, including the density height bonus, which encourages developers to provide affordable housing by allowing them to exceed the city's height limitations by two stories in return for a 40% discount for students, according to Madison Commons .

Madison's Affordable Housing Fund has supported 32 projects across the city and over 2,700 new rental units, 2,150 of which are considered affordable housing, O'Keefe said.

Across the four new projects will be approximately 275 new rental units, including 167 for those with lower incomes, according to the Wisconsin State Journal .

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City of Madison invests nearly $10 million in expanding affordable housing options

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The City of Madison has allocated $9.85 million from its Affordable Housing Fund to support the addition of four new affordable housing projects. The four projects include the Merchant Place Senior Apartments on the West Side, East Washington and 7th Ave. on the East Side, CORE on Dryden and United Residences on the North Side,...

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Rapid Rent Increase: Madison rents are rising quickly.

Key Factors:

Housing Shortage: There's a significant shortage of housing units.

High Demand: Population growth in the city has outpaced housing development.

Rising Construction Costs: Increased costs for building materials and labor.

Economic Impact: Higher rents are making it difficult for many residents to afford housing.

Regulatory Limitations: State laws restrict the city's ability to implement rent control measures.

Solution Focus: Building more housing is seen as the primary solution, though it will take time to address the issue fully.

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Madison rent prices are soaring at a record pace and residents are feeling the effects ripple through their lives - but the city has concluded the only legal solution to control the increases is to build more housing.

That's an answer that will take years to show results while tenants face life-changing decisions right now.

Wisconsin state laws prohibit more proactive measures from local governments. And the few support services that exist for housing are already overwhelmed by the amount of need in the city.

For Tammy Rabideau, rent increases mean leaving the city she's called home for 35 years.

After she was notified rent for her west side apartment would spike $200 a month to $1,450 at the start of her next lease in October, she searched for a more affordable city.

"We are relocating 100% because of the rent," said Rabideau, who is moving with her partner to Iowa City in August. "Everywhere we looked here was just astronomical. We could afford it, but do we really want to? At what cost?"

While researching the causes and effects of a recent surge in monthly rents, the Cap Times heard from over 100 people with concerns about being priced out of their homes. For some, like Rabideau, it means moving out of town altogether. Others are living from paycheck to paycheck and cutting costs to make ends meet.

The Cap Times contacted over a dozen landlords and property managers in the Madison area for their perspectives, and none replied.

Almost every tenant interviewed said they felt powerless in the situation, including Michelle Allen, a certified nursing assistant and a single mother of four. She is moving out of her apartment on the west side by Elver Park after building management told her in April that her rent would increase by $300 a month at the start of her new lease in June.

"It's not acceptable," Allen said. "That's money I have to prioritize for my children (and) their needs. I don't understand how people are going to be able to keep doing this before there's nowhere left to stay."

Many in the city fear just that - not enough room to grow and nowhere for residents to turn.

"When I talk about Madison experiencing a housing crisis, this is what I mean," said Mayor Satya Rhodes-Conway, who made city incentives to develop more rental units a staple of her reelection platform this spring. "We are seeing symptom after symptom of years of failing to produce enough housing and, in some ways, this is the inevitable result."

Growing outward is not an option, Rhodes-Conway said. She believes every neighborhood in Madison needs to be opened up to more housing. Since January, Madison's City Council has steadily taken steps to create more density in residential areas, a process that stirred controversy with homeowners fearing they'd lose the character of their neighborhoods.

But those steps are still not enough, Rhodes-Conway said.

"It's a very unsatisfying solution, but at the end of the day, the only solution really is to build more housing," the mayor said.

A reverse 'Field of Dreams'

Madison is expected to add over 100,000 new residents between now and 2050 - a 37% population boom from the 270,000 who live in the city now - and housing experts project the community will need at least 10,000 new homes every five years to keep up. The development of new housing, specifically affordable homes, has not matched the need, much less the pace suggested by those projections.

The resulting rent increases are economics 101, said Kurt Paulsen, a professor of urban planning at the University of Wisconsin-Madison. When demand exceeds supply, prices go up.

"It's a story of too many people chasing too few units," he said. "And like any region, we face a real choice: Either we build lots of housing where people want to live, or we don't build a lot of housing."

He calls it "the reverse 'Field of Dreams.'"

"If you don't build it, people will still come," Paulsen said.

A national study from Apartment List in March found that rent prices in Madison have jumped 14.1% over the past year and 30.4% since March 2020. It was the fastest-rising rent of any major city in the United States, the study reported. The average one-bedroom apartment in January 2017 rented for $873. In April 2023, that number clocks in at $1,322.

The increases are the result of the rising costs of buying land, building homes and operating apartment buildings - including property taxes and utilities - and an imbalance between the supply of and demand for housing, said Bill Connors, the executive director of Smart Growth Greater Madison Inc, a nonprofit group that represents local real estate development.

"The only solution is to encourage the construction of many more housing units every year all over the Madison area and for local governments to stop adding costs to constructing and operating housing," Connors said.

Even though Madison last year approved a record number of new homes - 4,076 multifamily units and 150 single-family houses - actual construction can take years to complete. And outside of development, there are not many options to remedy the high-rent situation, said Matt Wachter, the director of the city's Department of Planning, Community & Economic Development.

Nor are there many options for renters to find a cheaper place to live in Madison.

At the end of 2022 and the beginning of 2023, the city's vacancy rate - the percentage of available units that are unoccupied - was 2.5%, which Wachter called "really, really low." A healthy vacancy rate is around 5%, according to planning division staff.

"The city is actively working to ensure people aren't displaced from their neighborhoods. The way we do that is to make sure we're adding more housing and adding a wide variety of housing and a wide variety of price points," Wachter said.

"It's a lot of units. It's a lot of people to house."

While cities in other states have enacted measures such as rent control and income-based zoning mandates to keep costs down for residents, Wisconsin statutes prohibit those steps.

State law says local municipalities cannot regulate the amount of rent or fees charged for housing or enforce "inclusionary zoning," which requires a certain percentage of housing be available to low- and moderate-income families.

"We don't have a hammer - we don't have a blunt tool like rent control," Wachter said. "We don't have a mechanism to directly affect the rents being charged in the market. A lot of that power falls (to) the state."

Rhodes-Conway said she wishes the city had more ability to intervene.

"Unfortunately, we've been broadly preempted by the state Legislature from protecting tenants," Rhodes-Conway said. "It's very, very frustrating ... but I do think that if tenants are in a position to push back, they certainly can ask their landlords for more information about why prices are going up."

Still, she said, "there is very little that we can do to hold landlords accountable if they are increasing rent disproportionate to their costs."

Power balance shifts to landlords

Paulsen, the UW urban planning expert, said city and county officials are doing "everything they technically can" to ease the housing shortage, but compared to the need, "it seems like a drop in the bucket."

He comes back to the overall theme that market conditions are the driving factor: "I know people want to look for a villain and a hero and a morality play, but the fluctuations in rents are really driven by vacancies, which reflects both new supply coming online and the demand for people to live here because of job growth and income growth."

Right now, it's a landlord's market. Even units with record high rents are being snatched up.

"When vacancy rates are less than 3%, landlords have pricing power and tenants don't have a lot of choice. When vacancy rates are 7%, the story's flipped," Paulsen said. "I hate to say it because it sounds cruel, but housing is a business - you can't operate a business at a loss and expect to survive."

Chris Mokler is the director of legislative affairs for the Wisconsin Real Estate Investors Association, formerly the Wisconsin Apartment Association, and helps advocate for landlords and property managers.

"Costs are significantly up... and a landlord cannot operate negatively. They have to operate in the positive. Otherwise, why would they do it? Why would they risk their families?" Mokler asked. "The landlord risks his family, his money, his credit, to buy some type of building and they can charge what they want to charge. That's their business."

But to residents, it can feel unjust. Allen, the nursing assistant who's moving, said there are landlords who do care, but most don't, in her experience.

"People are taking over buildings, not thinking about the people that live there and how much they can afford. You have landlords that are very selfish and that are very greedy," Allen said. "There is definitely an imbalance."

To Mokler, the solution is to shop around: "There are good landlords out there that raise their rents to market rates so they can afford to pay their bills, and we suggest that tenants seek those out."

For Allen, that's easier said than done.

It took her months to find an affordable apartment within Madison Metropolitan School District boundaries so her children could stay in their schools.

"It's really difficult trying to find a three-bedroom apartment in Madison. Even for a two-bedroom, being a family of five. We don't qualify for most low-income two-bedrooms," Allen said. "A lot of people were telling me I would have to go outside of Madison to find something."

Poor timing as emergency rental assistance ends

Temporary programs assisted people with rent throughout the pandemic, but many of those are coming to an end.

The nation's Supreme Court struck down the national eviction moratorium in September 2021, causing a flood of evictions across the country, including in Wisconsin. At the same time, the City Council approved Dane Core 2.0 with the aim of keeping local housing assistance alive.

But not all renters were eligible.

Allen didn't qualify for Dane County's emergency rental assistance program, Dane Core 2.0, which provided funds from the U.S. Department of Treasury to those struggling to pay rent during the COVID outbreak. She said it wouldn't have mattered even if she did.

"Not only is our rent going up, but people who get rent assistance, (our building) doesn't want to take that," Allen said. Landlords are required to fill out applications for their tenants receiving assistance and that process can take months, especially if landlords are resistant to waiting for their payments.

Dane Core launched in 2021 first through the Tenant Resource Center and later expanded to include Urban Triage and Community Action Coalition for South Central Wisconsin. The program distributed over $75 million in direct financial assistance benefits to more than 19,000 renter households. The money could go toward rent, utilities and internet payments.

But the program will permanently stop accepting applications on May 31 because funds are depleted. Core was funded by the Federal Emergency Rental Assistance Program, and the state version of the program ended Jan. 31.

It's not great timing, said Hannah Renfro, the interim executive director of the Tenant Resource Center, a local nonprofit dedicated to providing housing support.

"We are definitely seeing a lot of people seeing their rent increase by $300 a month. ... There are a lot of folks who certainly can't afford that kind of increase," Renfro said. "It is really difficult. We are way short (on) the number of units needed for affordable units. It puts people in really hard positions where they will sometimes agree to that increase, because what's the alternative?"

The Tenant Resource Center will continue to provide services to renters and landlords in eviction court, offering legal representation and mediation through the Eviction Diversion and Defense Partnership. The program is aimed at increasing access to legal representation and other housing support and court navigation services. The center also offers counseling on rental rights, including information about how to break a lease and the eviction process.

Renfro said that even though tenants could theoretically move when their lease expires, or question their landlords about the higher rate, the most vulnerable people are afraid of being forced out.

"There aren't a lot of options for tenants to fight back," Renfro said.

And there are few avenues for support in Madison outside of the Tenant Resource Center. The majority of resources that the city of Madison provides online directs residents there. The Homeless Services Consortium of Dane County has an outdated list of subsidized housing options and vacancies from December 2021, as does the Dane County Housing Authority from October 2022.

Housing Navigation Services through Catholic Charities of Madison has created its own platform to search for an affordable unit and provides services to individuals and families experiencing housing insecurity and homelessness.

Allen said that for her family, the Tenant Resource Center and lists of available housing were nice - but not enough.

"So many places have a waiting list, so that really doesn't help," Allen said. "Most low-income housing has a two-year waitlist and there are people who have been on it for a very long time and still can't get it.

"I think if there were more people who could actually offer help with housing, that would probably be a good idea."

A 'golden ticket' if you can get it

Rhodes-Conway is aware that there is much more work to be done, specifically on subsidized housing.

"We need more formally subsidized affordable housing. We're working on that. We have big projects in the pipeline and that will help," Rhodes-Conway said, explaining the city is producing a wider range of options for those between 40% and 60% of the area median income, which was $70,000 for a household between 2017 and 2021, according to the most recent census data.

But the mayor said the city isn't producing enough housing for people who are at 30% or lower of the area median income.

"We are looking at housing availability, particularly for the lowest income. That is a pretty significant piece that we have to figure out how to address," Rhodes-Conway said.

Sami Smith - a social worker with EmployAbility, a social services agency that provides low-income housing support to people with mental health diagnoses - works to find subsidized housing for her clients but said the wait times are brutal.

"Subsidized housing is like the golden ticket, but for a three-bedroom (apartment) there is a four-year waitlist," Smith said. "It's completely unreasonable."

While the city's Community Development Authority offers public housing where tenants are given the option of paying either an income-based rent or a flat rent, it also has a more competitive housing lottery called Section 8 which pays a portion of the rent for about 1,600 low-income households in the city. Smith said even that program is random and those funds can take time to come through to tenants.

"People can't afford to live anymore. I know myself - I was homeless all of 2019 because I couldn't get a place because of my credit," Smith said.

EmployAbility only has two housing specialists right now, according to Smith, and she'd like to see more investment into housing programs like hers.

Can people fight a rent increase? No.

When it comes to legal steps to fight a rent increase, there are none. It's a frustration for Jason Greller, a local real estate lawyer whose clients include tenants as well as landlords.

He's been getting five or six calls a day since the start of the year from tenants who are surprised with rent increases, he said. Greller tells all the callers the same thing: Landlords have the unilateral right to increase the rent and there are no limits on that.

"A tenant doesn't have legal remedies, so there's nothing I can do to help them," Greller said. "As an attorney, it's frustrating. If we want to get involved in any of these matters, we just become part of the problem because we charge money and there's very little that I can do to help."

While Dane Core may have provided some relief to tenants during the pandemic, Mokler, with the Wisconsin Real Estate Investors Association, contended it harmed those in charge of rentals. When the tables were turned and landlords were hurting from eviction moratoriums, he said, no one seemed to care.

"A lot of landlords are still digging out from COVID. We had the state of Wisconsin tell tenants that they could stay in their homes, that they wouldn't be evicted and they didn't necessarily have to pay rent," Mokler said. "Later on, they backed it up with emergency rental assistance programs, but landlords didn't get the money when they needed it. And sometimes it's withheld money that they (tenants) were perfectly able to pay."

It wasn't that long ago that landlords were having a difficult time renting their apartments, particularly downtown during the early days of the pandemic, Greller said. With an excess of vacancies, tenants had more bargaining power.

"Things have flipped over on its head in a very, very short period of time," Greller said.

With Dane Core ending, the Tenant Resource Center is expanding its hours starting the week of May 29. Its office at 1202 Williamson St. will be open from 9 a.m. to 6 p.m., Monday through Thursday.

Nonetheless, Renfro said the center could "always use more funds" to hire more housing counselors and more mediators.

"We know that there are going to be a lot of folks that have questions," Renfro said. "We are making sure we're accessible to everyone."

No longer at the 'forefront of tenants' rights'

To put it bluntly, real estate lawyer Greller said cities either "grow or die." Madison should be happy it's growing, but it's coming at a painful cost. And, at least to Greller, one need only look back a decade or so to figure out why.

Wisconsin was the first state to consider the inhabitability of properties as a right for tenants, Greller said, and consequently "stood at the forefront of tenants' rights."

If a space was untenantable - including lack of running water, non-working plumbing or sewage systems, no electricity or bad wiring - the landlord had to pay for repairs and tenants wouldn't need to pay rent during that time.

"We were very progressive, and eight years of the Walker administration and Republican Legislature changed the playing field enormously," Greller said. "There are very few tenants' rights lawyers in the state anymore."

Wisconsin laws were originally designed to protect the tenants and acknowledged the unequal bargaining power between them and landlords, he said.

"We knew tenants didn't have the same financial resources that landlords had and we (helped) through fee shifting," Greller said, which put power with tenants so that if their property manager didn't comply with the law, they could be paid double the damages and attorneys fees.

But during Republican former Gov. Scott Walker's administration from 2011 to 2019, a lot of laws that protected tenants were taken off the books, Greller explained. Because of that, municipalities had their hands tied.

Now, state law says any cited problems must impact health and safety, and landlords can challenge rent withholding in court. It's also easier for a landlord to shift the costs to the tenant. On top of that, laws were also changed under Walker so they no longer include what Greller called "the magic word" - "shall."

"Now they use the word 'may,' and what that means to somebody who's thinking about taking on one of these cases as a tenant rights attorney, it means you may get paid. You may not. It's up to the judge," Greller said, whereas it used to be a guarantee. "This is no longer an attractive area of practice for a lot of young lawyers, and, of course, a lot of these tenants can't afford to pay the bill anyway."

Carol J., 73, remembers a time when she felt like she had protections and power when it came to her housing. Now, she feels entirely different. She didn't want to use her last name for fear of retaliation from her apartment complex.

Carol lives in a 55-and-over housing complex in the Atwood neighborhood where rent has steadily risen over the past several years. In July 2020, she paid $1,300 a month. As of June 1 this year, she'll need to pay $1,525.

A 17.3% increase in three years may not seem like an excessive amount, but for seniors who are living off of retirement plans and social security with fixed income, Carol said, it's "really bad."

Carol and some of her neighbors, like Barbara Wright, can't rent income-restricted apartments because of the financial safety nets they've spent years building. Wright said she and the entire senior community are "stuck" and simultaneously "not taken seriously."

"If my rent is increased right now, I have nowhere to go. The apartments in Madison... there's nothing. And the ones they're building, I can't get into," Carol said. "In my mind, it's discriminatory. I'm really angry."

Carol worked for 28 years as a teacher and is still working full time for a nonprofit to afford her apartment.

"I can't afford living anywhere without working full time at 73. People talk about helping the most vulnerable population...and I feel that my section of the populace is becoming that because we don't have anywhere else to go," Carol said. "I have a daughter, she doesn't want me to move in with her, so what am I going to do? Pitch a tent somewhere?"

Wright, 70, organized a meeting with residents, management and their alder, Marsha Rummel, to address the situation in April. It didn't go well, Wright said.

"I feel like I need to be careful what I say. Some of the apartment residents thought that I was going to be evicted if I spoke out, and I said, 'I have a lease and I have a lawyer,'" Wright said. "If the manager had his way, I'm sure he would have done something because he was steamed we dared to say anything."

The property management company did not respond to multiple inquiries from The Cap Times.

"It's not like we have anywhere else to go," Wright said. "The options are all pretty bleak."

And unlike some, Wright and Carol don't want to leave their building. They have built a community in a quiet and walkable part of the city.

"We have most everything that you would want," Wright said. "But people like our property manager, they don't care. They don't want to preserve that. And the mayor, she talks a good game, but whether or not she's able to stand up against the developers is a whole other question."

'Pushing-on-all-fronts effort'

While Rhodes-Conway said it can be frustrating to be stuck in a housing hole, she sees it as motivating to find new options for everyone. She said the city has "mastered" using state and federal tax credits to create affordable housing.

Her office is looking into how the city can expand housing cooperatives, work more with a land trust model (where homeowners purchase their house but not the land, which is instead leased by a community land trust nonprofit), find opportunities in cohousing and build affordable condos.

"This is really a pushing-on-all-fronts effort to understand the dynamics of the housing market, the dynamics of residential construction to incentivize the kind of housing construction that we want to see here," Rhodes-Conway said.

She emphasized that the city is not the only actor and said it's important for the private sector to be involved.

"Obviously landlords need to be able to pay their bills and keep up their property, but I would hope that, particularly in the market that we're in now, that landlords would be sensitive to what tenants are going through and trying to help folks stay housed," Rhodes-Conway said.

But for Rabideau, who's already packing up to move to Iowa, it's too little, too late. The freelance writer said she has a better understanding of housing hardships than most people. She and her daughter were evicted in 2013 on New Year's Eve and experienced homelessness for months afterward.

"I am not new to living on the edge and the difficulties that can come with (housing). I just don't agree with what's happening here," Rabideau said. "I have a love-hate relationship with this city because we claim to be so progressive but there are so many areas that it's just lip service. I see it across the board and housing is just one aspect.

"In regards to the policies we have in place, to diversity and being inclusive, I think it's a bunch of bullshit."

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Why Madison rents are rising so fast and won't slow down

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Sky-high demand and slow growth for housing means high rents, experts say. One study says rents are rising faster in Madison than anywhere else in the U.S.

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Madison rent prices are rapidly rising and it's affecting families

The city concluded that the solution to control the increases is to build more housing

Madison has invested nearly $10 million from their Affordable Housing Fund to support the addition of four new affordable housing options