Politics
Madison City Council Approves Inclusionary Zoning Ordinance, Requiring Affordable Units in New Developments
The July 7 vote sets Madison's requirement at 15 percent affordable units in projects over 10 units, matching the threshold already in place in Milwaukee and Minneapolis.
How we reported this
The Madison City Council voted 14-4 on July 7 to adopt an updated inclusionary zoning ordinance that requires 15 percent of units in new multifamily buildings of 10 units or more to be priced for households earning up to 60 percent of area median income. The measure applies to projects seeking city permits starting January 1, 2027, and covers areas including the East Washington corridor and the Near West Side.
The ordinance follows the city's 2025 housing needs assessment, which documented a shortfall of 3,200 units affordable to low-income residents. Council members referenced similar requirements already operating in Milwaukee since 2022 and in Minneapolis since 2019, noting that Madison's prior voluntary program produced only 180 affordable units over four years.
Effects on Madison households and development costs
For local renters, the change means new apartment buildings must include units with rents capped at approximately $1,050 monthly for a two-bedroom, based on 2026 Dane County income limits. Property owners in affected neighborhoods may see increased applications for building permits before the 2027 deadline, while developers have indicated they will adjust site plans to meet the set-aside rule rather than pay the $75,000 per unit fee alternative.
City budget documents show the ordinance is projected to generate 240 affordable units annually once fully implemented, drawing from a pipeline of 1,600 permitted multifamily units in 2025. This compares with Milwaukee's production of 310 units in its first full year under its 20 percent requirement.
Implementation timeline and reporting requirements
City planning staff will begin reviewing compliance during site plan approvals in late 2026, with annual reports due to the council each March starting in 2028. The legislation directs the Department of Planning to track unit occupancy rates and compare outcomes with peer cities through a shared data agreement with the Wisconsin Housing and Economic Development Authority.
Residents seeking to apply for the new units will register through the city's existing housing portal, which currently lists 420 waitlisted households for other subsidized programs. No changes were made to single-family zoning or existing rental stock under the final version passed on July 7.