January 24, 2024

UW Health invests in workforce housing for Dane County

An aerial view from a helicopter highlights the Madison city skyline and downtown isthmus during a sunny autumn day on Oct. 7, 2006. The view includes the Wisconsin State Capitol building, Monona Terrace Convention and Community Center, Lake Monona (foreground) and Lake Mendota (background). In the background along the upper left horizon is the UW-Madison campus..©UW-Madison University Communications 608/262-0067.Photo by: Jeff Miller.Date:  10/06    File#:   D200 digital camera frame 1565

Joins other major employers in latest Dane Workforce Housing Fund

MADISON, Wis. – The University of Wisconsin Hospitals and Clinics Authority Board approved a $1 million workforce housing development investment that will benefit its employees and others in Dane County.

This marks the second time the UW Health board has invested $1 million in the Dane Workforce Housing Fund, joining other large, local employers in the effort to create more affordable housing for the Madison-area workforce.

The fund began with a collaboration between the United Way of Dane County and the Economic Stability Council to tackle an affordable housing shortage in Dane County, according to Lorrie Heinemann, president and chief operating officer, Madison Development Corporation, the manager of the fund.

“Investors in the Dane Workforce Housing Fund fill a gap in the financing that could not be filled by another source of capital at a reasonable cost, giving developers a lower interest rate and allowing them to offer some of their apartments at affordable rents to people making between 50 and 80% of the Dane County area median income,” she said.

The Dane County area median income in 2023 was $123,400 for a family of four, according to the United States Department of Housing and Urban Development.

UW Health has many employees in this group, according to Chuck Klein, manager of talent acquisition, UW Health. Madison-area housing costs come up frequently in conversations while recruiting new employees, he said.

“People tell us they are surprised by how expensive housing is in Madison, particularly people who are moving from out of state,” Klein said.

While the issue affects many Madison area businesses, housing costs can be especially challenging for employees at UW Health because some jobs require employees to be on call regularly, which requires that they live within a certain distance from one of the hospitals.

“That’s basically the west side of Madison for employees at University Hospital, and affordable options are challenging to find,” he said.

UW Health joined a dozen other investors in the Dane Workforce Housing Fund I, investing the first $1 million in that initial round of funding that launched in 2020. The goal of the first round of the fund was to raise $10 million to build 500 units. When the fund closed in late 2023, it exceeded that goal by raising $11.8 million from 14 investors and building 747 new housing units. New apartment buildings created by the first round of funding include Uno Terrace Apartments in Madison, The Trotta and The Kestrel in Middleton, and Limestone Ridge in Fitchburg. The projects tend to have mixed-rate rents, with some offered at market rate and others to earners making less than the area median income.

The Madison Development Corporation is currently raising funding for Fund II, to build on the progress Fund I achieved, with the goal of reaching $10 million by February 2024. Employers interested in investing in the fund can call (608) 535-4572.

“We look forward to the next phase of this work,” Heinemann said. “We’re grateful to UW Health and all the investors who are working to be part of the solution that creates more quality workforce housing in Madison.”

This fund is an investment, not a donation for UW Health, but it is also more than that, according to Robert Flannery, chief financial officer, UW Health.

“This investment is part of our mission to improve health in Dane County,” he said. “Through collaboration with community organizations and other major local employers, we can improve health equity with better access to housing, including for our workforce.”

The full list of investors includes BMO Harris Bank, Exact Sciences Corporation, First Business Bank, Lake Ridge Bank, Madison Development Corporation, Madison Gas and Electric Foundation, Oak Bank, Oscar Rennebohm Foundation, Summit Credit Union, Park Bank, TruStage Foundation, UW Credit Union, UW Health and WPS Health Solutions.