Kurt Paulsen, a UW-Madison professor who studies urban development and housing policy, says the region’s high rents and low vacancy rates spurred developers to build more housing: “We have had a lot of supply come online in the last year, and a lot in the pipeline in the last year. And you see that now in the fact that the vacancy rate has shot up.”
Still, Paulsen cautions that new construction will likely slow down as developers wait for these units to be absorbed into the market. High interest rates and tariffs on construction materials — the U.S. Department of Commerce recently announced it is tripling duties on Canadian lumber to 21% — pushed by the Trump administration are also likely to slow construction. And though rent growth has stagnated, Madison’s high prices are still pricing out many potential residents.