Twelve stories above State Street, a half-moon-shaped infinity pool circulates crystal-clear water over the vanishing edge of a rooftop deck with a panoramic view of downtown Madison and Lake Mendota. Sunbathers recline on poolside lounge chairs, basking in the unseasonably warm spring sunshine. Some are relaxing, but others glance at computer screens and note cards — it’s almost finals week, after all.
This is The Hub, a new downtown apartment complex that caters to college students. But these upscale abodes are a far cry from the no-frills student housing many remember from their university days. With an ultramodern design and an amenity package that rivals five-star resorts, The Hub represents a shift toward a trendy new style of living on college campuses — available to those who can pay the hefty price tag. A standard one-bedroom starts at $1,500 a month, with higher prices for more luxurious units, including a “Mansion” level that can come with a hot tub, a pool table and a private terrace.
Interview with staff writer Allison Geyer
Billed as a “game-changer” in Madison’s student housing market, The Hub was the most recent and high-profile development in a wave of high-end, amenity-rich student housing complexes that have opened around the campus area over the past few years. Many welcome the new developments because they provide more housing options for students in a tight rental market, but others fear the influx of high-priced properties coupled with the loss of affordable housing will create a socioeconomic divide and push lower-income students farther from campus.
“As much as we talk about how tuition is out of control [and] how that’s pricing middle-class, working-class people out of college, we’re seeing the same thing happen with the cost of housing,” says Ald. Zach Wood, who represents much of the UW-Madison campus. Wood is concerned about developments with “excessive amenities” that seem to be catering to wealthy, out-of-state students.
The Hub exudes luxury and exclusivity. On the second floor, there’s a “spa” with tanning beds, a sauna and a steam room; Moroccan lanterns hang above a hot tub and a “cold plunge” tub. Across the hall, there’s a fitness center with a private yoga studio and a virtual golf swing simulator — bring your own clubs, or check one out from management. Beyond, there’s a movie theater with terraced seating and a common room with arcade games, billiards and foosball tables. Around the corner, there are private study rooms with white boards, computers and free printing — just provide your own paper. For the creative types, there’s a soundproof music studio with a keyboard, a drum set and amplifiers. An outdoor courtyard has gas grills, hammocks and picnic seating surrounding a sand volleyball court — in the wintertime, it turns into an ice skating rink.
UW-Madison sophomore Charlie Lawrence on the rooftop terrace at The Hub, a new upscale student high rise.
“This isn’t college at all,” UW-Madison sophomore Charlie Lawrence remembers his parents saying when they helped him move into The Hub last fall. A transfer student from the University of Iowa who grew up in Eden Prairie, Minn., Lawrence signed a lease in July when the building was still under construction. He knew The Hub was supposed to be nice, but he was still “pretty taken aback” when he saw all the amenities his new home had to offer.
“This is not what I ever expected to be living in for my first apartment,” Lawrence says. “I expected a typical house somewhere, not this nice apartment building that has everything you can ask for.”
It all might seem over-the-top, but Lawrence says The Hub is a good value considering everything that’s included with the rent.
“Being a student gets to be somewhat overwhelming,” says Lawrence, a biology major with hopes to attend medical school. “Being able to wind down and relax makes a big difference.”
Nine years ago, the Lucky apartments became the first luxury student tower to go up in Madison. The development from Steve Brown Apartments was well-received at the time, but SBA spokeswoman Jennifer Oppriecht recalls that some people felt an initial “hesitation” to embrace the luxury housing.
“It’s not that people didn’t like the product,” Oppriecht says. “More like there was some disbelief that this was an option for students because it was so beautiful.”
In 2007, the editorial board of UW-Madison student newspaper The Daily Cardinal warned against the “upscale transformation” of the city’s housing stock, citing the rise of Lucky as a harbinger of a large-scale market shift toward luxury developments that could lead to “socioeconomic segregation in housing” among students.
“As Madison’s skyline changes, the city’s identity also undergoes a transformation,” the editorial board wrote. “Madison’s eccentric culture is in danger of drowning in a mass of prefabricated housing.”
Nearly a decade later, parts of that prediction seem to be coming true. The city has approved a number of high-end apartment towers in the campus and downtown area over the last several years: Grand Central on West Johnson Street, Xo1 on University Avenue, Varsity Quarters at the corner of Monroe and North Randall streets, City View on North Frances Street and The Waterfront on North Henry Street.
Closer to the Capitol Square, luxury developments like Ovation 309, The Domain and 306 West have brought more density to the city center, catering to young professionals as well as students. The Bassett Neighborhood, once known for affordable student rentals, is now home to upscale developments like Seven27, Nine Line at the Yards and The Depot.
And there are even more projects in the pipeline. The Lux, a 12-story, 160-unit apartment complex, opens this summer on West Johnson Street; Uncommon, a 10-story, 179-unit building on North Bassett Street, opens this fall; and The James, a 12-story, 367-unit complex built by the same developer as The Hub, opens next summer on University Avenue.
UW-Madison senior Lauren Klippel once lived at Grand Central, a luxury development near campus, but this year she didn’t buy into the high-end housing hype. She shares an older apartment with friends on North Frances Street, just steps away from The Hub.
“People are saying that The Hub is taking over,” says Lauren Klippel, a UW-Madison senior. She’s taken note of “a definite boom” in campus-area housing construction since starting at the university four years ago. Klippel sees the new developments as providing more options for students in a tight rental market, but acknowledges there could be a downside.
“I haven’t personally experienced any problems [finding] affordable rentals, but I can see how students would be affected by this,” she says. “Even if students would prefer to live somewhere cheaper, they might feel pressured to live in these nicer and newer apartment buildings.”
After stints living in newer developments like Grand Central and one of the townhouse-style apartments on Spring Street, Klippel opted for budget-conscious housing this year, sharing an older apartment with friends on Frances Street near Wando’s — in the shadow of The Hub. At $570 per person per month, it’s a reasonable price for a highly desirable location, Klippel says. But, she adds, “It’s definitely run-down. At one point our ceiling was falling in.”
Students who are willing to tolerate a collapsed ceiling to save on rent are not the target market for new luxury high-rise developments. These are places that offer lease-signing incentives like FitBits, PlayStation 4s, hoverboards and GoPro cameras. Developers say there’s a sizeable market of students — and parents — who are willing to pay extra for a special product.
“There is plenty of demand for this kind of project all around the country,” says Scott Sproat, director of marketing for Core Campus, the Chicago-based development firm behind The Hub and The James. Before entering the Madison market, Core Campus built similarly massive, amenity-rich towers near schools like Arizona State, the University of Arizona, the University of Mississippi, the University of South Carolina and the University of Oregon.
The Core Campus acquisitions team looks at more than a dozen factors when choosing locations to build its student housing properties, including the availability of affordable land close to campus, enrollment growth at the university, the success of the school’s athletic program and the overall economic health of the city.
Chicago-based CA Ventures, another luxury student housing developer with a national footprint, is behind the Uncommon apartment towers going up near the Kohl Center. Nick Hill, vice president of new development, sees demand for such properties stemming from affluent, out-of-state and international students who have higher expectations and a “higher living standard” than some Midwesterners. On the supply side, some universities with aging student dormitories have opted to forgo building new on-campus housing to save on construction costs, shifting the students to private residences.
“We’ve had universities request that we become part of their student housing,” Hill says, but he notes this has not been the case in Madison.
University Housing at UW-Madison is still the city’s largest student housing owner, with about 7,400 students living in 19 residence halls and learning communities. There is no requirement that students live on campus, but about 90% of freshmen choose to live in the dorms each year, according to the university. UW-Madison student housing typically costs between $9,093 and $10,243 an academic year for a double room, including food costs, which equates to about $1,010 to $1,138 per month.
While some of the school’s older dormitories like Sellery, Witte and Elizabeth Waters remain popular because of the experience they provide, many of UW-Madison’s newer developments reflect the demand for increased amenities, says Brendon Dybdahl, director of marketing for University Housing. In the last several years, UW housing has added conveniences like air conditioning, wireless internet, carpeting, walk-in closets and more bathrooms.
“That’s sort of the expectation,” he says. “It’s the modern standard.”
Madison’s student population is made up of between 47,000 to 50,000 people attending UW-Madison, Edgewood College, Madison College and other smaller institutions, according to census data. About 40,000 of those are full-time, and the rest part-time, and they represent a variety of ages, income levels, housing needs and priorities.
It’s a sizable group with considerable economic influence, but it’s a difficult group to study, particularly when it comes to housing and financials. Students typically have low incomes and live in expensive rentals, making them appear, on paper, to be impoverished or burdened by housing costs. But there’s more to the story. Some students pay for housing with grants or loans, and others get help from parents. Others work full-time jobs to pay the rent.
Matt Wachter, the city’s housing initiatives specialist, is working on a comprehensive report analyzing Madison’s student housing market in order to help the city gain a better understanding of the group. That knowledge will in turn help city officials develop housing policies and neighborhood plans.
Though still in the early stages of the study, Wachter has identified possible trends, including an increase in the number of students who report choosing their housing based on the convenience of the location and the level of amenities that are included or nearby.
Students living at The Hub have access to some mind-boggling amenities, from a rooftop infinity pool to a game room. Apartments come fully furnished in a modern style.
“That’s why we’re seeing more things like The Hub — there’s demand for that kind of housing,” Wachter says. “That’s a national trend.”
For UW-Madison student Aaron Grode, location and convenience were key factors in his decision to live at Grand Central, which is tucked between the Department of Chemistry building and Grainger Hall. He’s paying $600 per month to share a furnished apartment with friends.
“The Embassy was cheaper, but it’s so far away,” says Grode, referencing to another student high-rise half a mile east on University Avenue. “Grand Central is in the heart of campus. I can just roll out of bed and take the elevator downstairs to class.”
But there are students for whom cost is a driving factor. They’re choosing to live farther from campus, settling in areas with concentrations of rental housing, including around Badger Road and near West Towne Mall. There are definite reasons a student might be wise to consider such locations — it’s quieter, rents are cheaper — but “they’re still making a housing decision you wouldn’t necessarily expect,” Wachter says. “That might imply that there are some affordability issues going on.”
UW-Madison student Tom Compas’ goal in his housing search was to find the cheapest place as close to campus as possible. He focused his apartment hunt on “crappy places,” looking at small, older rental homes to split with his friends in order to save on costs. He’s paying $350 for a bedroom in a house south of Camp Randall Stadium.
“With the cost of tuition, I don’t want to come out of school with a lot of debt,” he says. “This house was a compromise.”
There’s also a third trend emerging. Many students are abandoning the older two-flats in places like Miffland, Greenbush and the Bassett Neighborhood in favor of newer high-rises closer to campus. There’s been a softening in the student rental market for older properties that are not directly adjacent to campus. In some cases these older homes have shifted back to being owner-occupied, but Wachter says many former student rentals are also being leased by people who work downtown.
“It’s not uncommon to get a house full of Epic people, another full of people working in food service,” he says. “You didn’t see a whole lot of that 10 or 15 years ago.”
David Michael Miller
With the variety of housing options available, it’s difficult to determine the true average cost of student rent in Madison, says Helena Manning, coordinator of UW-Madison’s Campus Area Housing resource service. The current construction boom further complicates the calculation. But Campus Area Housing can determine current price ranges using data from its listings.
A studio apartment rents for anywhere from $450 to $1,300 per month, a one-bedroom is between $600 to $1,900, and a two-bedroom goes for between $900 to $3,500.
Manning hasn’t seen any students getting priced out of the campus area just yet. However, she does note that students seem to be increasingly venturing out beyond the immediate campus area to find housing.
“I’m seeing a lot of students living west of campus,” she says, pointing to new housing developments along Campus Drive, Old University Avenue and Monroe Street. “The same kind of thing is happening east of the Capitol.”
For some students, the off-campus migration has been even more dramatic. UW-Madison senior Jim Payne found he could get “more bang for [his] buck” the farther away from downtown he was willing to move. A year and a half ago, he traded a room in a four-bedroom house he shared with friends on Emerald Street for a one-bedroom apartment in Fitchburg.
“I knew that I wanted a place all on my own — no friends, no random roommates,” says Payne, who took a three-year hiatus from school in 2010, when he dropped out due to financial and academic struggles. When he decided to resume his studies, he knew that living alone would minimize distractions and give him the best chance for academic success. He also wanted to keep costs as low as possible. A computer science major with a math certificate, he carefully calculated the maximum monthly rent he could afford: $700. But when he looked at housing available downtown at his price point, he couldn’t find anything larger than a studio.
“While I’m sure I could have made that work, I quite simply value having space,” he says.
When he broadened his search, Payne learned that in Fitchburg, he could rent a spacious, 750-square-foot apartment in a building near a golf course, tennis courts and an outdoor pool. He takes the bus to class and to his on-campus job at the UW-Extension Mailing Services, typically staying downtown all day to minimize time commuting. Spending hours on the bus each week can be frustrating — particularly in the evenings, when the direct line to campus stops running and the commute time is doubled — but Payne says overall he’s pleased with his living situation.
“I’ll have to find somewhere again starting this fall, and I can guarantee you it will again be far off campus,” he says. “If I’ve learned anything about the housing market in downtown Madison, it’s just how much campus proximity drives up prices.”
The addition of any housing stock — high-end or otherwise — will ultimately bring down prices due to the law of supply and demand, says Andra Ghent, an associate professor of real estate and urban land development at UW-Madison. But at the same time, the recent surge in luxury rentals isn’t doing anything to make student housing more affordable. As vacancy rates have plummeted to about 2.3%, the market has tightened and rents have gone up, leaving cash-strapped renters with fewer options.
“Landlords often set their rents based on comparables — the more people are willing to pay, the more landlords think they can raise their rent,” says Brenda Konkel, executive director of the Tenant Resource Center. “Because there are so few vacancies, landlords can charge whatever they want.”
Konkel says she’s seen rents go up “more than usual” in recent years and suggests the hikes could be driven by demand from out-of-state students who view Madison’s rents as relatively cheap.
“Students not from Wisconsin are paying more and more rent, and it does drive up the market,” she says. “It makes it harder for people who aren’t coming from that higher income bracket.”
The UW Board of Regents last fall voted to lift the undergraduate enrollment cap on out-of-state and international students at UW-Madison, raising the limit from 27.5% for the next four years. Officials have said the change will result in the enrollment of 200 to 300 more nonresident students.
Everyone seems to agree that students are facing a tough deal. But finding a solution could prove difficult.
“I don’t know of a good tool or program to add affordable student housing,” Wachter says. “Our normal toolkit doesn’t necessarily apply to this population.”
Tax credits and community development block grants, typically used to make housing affordable, are not designed to help student renters, since students’ true incomes are difficult to measure and their rents are often subsidized by parents and student loans.
Since UW-Madison’s campus-area housing extends along the isthmus and bleeds into the downtown area, there’s a real problem with land scarcity. And with city zoning restrictions preventing developers from building past a certain height, there’s a limit to the density that the area can handle.
Ghent predicts that housing in Madison’s downtown area could become like New York City’s Manhattan — a “luxury good” that only the wealthiest of the city residents can afford. Lower-income students and others seeking affordable housing may be forced to relocate farther away from campus. But that’s not necessarily a bad thing, she says. If students move away from downtown and into Madison’s neighborhoods, the added density would launch a shift toward making those neighborhoods more accessible to mass transit, and it would eventually take the pressure off the city center.
“We need more units,” she says. “And not necessarily downtown.”