BNBMadisonBA

There are very practical macroeconomic and environmental issues here. There is perfectly good infrastructure - housing, sewer, water, cable, etc.- in many of these small towns. So two things are happening to small towns in SW WI.
1) influx of affluent people from the coasts has make cities such as Madison no longer affordable, so people are moving farther and farther away to existing, less expensive small towns and driving more.
2) if the small town has any non-retail employment or if it's an easy drive to a larger place with employment it's remaining stable.

As you have pointed out for years, the problem is maintaining the existing infrastructure. The small town has trouble raising taxes to do the repairs. People move to a nearby community with employers and expanding subdivisions and don't realize that the developer has put all those infrastructure costs into their home price OR, in places where developers influence city planning, the developer conned the government into raising taxes on existing homes to pay for the new home infrastructure instead of using the tax money to fix infrastructure for the existing residents.

Also, people who oppose things tend to make the most noise.
Our next door neighbor wanted to expand his garage and before giving him a variance, the town had to ask us neighbors if we had a problem. I didn't so I ignored the request for comments.
If there is a zoning change for a 4-plex on vacant lots in the area and I think that's OK, I don't go to the zoning hearing. However, my two nut-case neighbors who want only McMansions on the lots next to them - even if the lots have been empty for years - they go to every hearing and they write letters and they complain to all their friends. The people who want more affordable housing in the area don't live here yet so they can't come to the hearings - not local voters.

Houston Lacks zoning so you can buy a residential block and build a 4-6 story apartment complex. Unfortunately, the neighbors don't like the change in the neighborhood skyline, the streets won't handle the traffic and the schools weren't designed for that density. In short, a 4-plex or even a 2-story complex can perhaps be accommodated, but multistory creates all sorts of problems that the developer isn't required to solve for the rest of the community

After unchecked growth has destroyed livability in the huge coastal mega-cities, the rich who have caused a lot of the affordability problems there are now buying up 2nd tier cities in fly-over country. Housing there used to be more affordable but due to people using megaprofits from unaffordable places to buy mcmansions in smaller cities livability in the mid-tier is being destroyed.

Do you have any suggestions on how to preserve the midsize cities? Stop building permits and they just double the price of existing houses and more importantly raise the price of rental properties beyond affordability. Is there any possible self-defense for folks that didn't want to live in either an unlivable mega-city or a tiny, dying town.

That's the difference between Chicago, an old dense city with lots of transit and street grids and a place like Houston with no transit and lots of cul-de-sacs and dead end streets. The neighborhoods have only 1-2 exits and even with single family they disrupt the stroads, so the city blocks off many of the original exits. Now, instead of a block with 6-10 houses and 3 cars each (30 cars), we have say a 4 story building covering the entire block with 12-15 units per floor and 1-2 cars per unit (more like 90 cars) in an affluent area with poor/no bus service. So as a back of the envelope, for each block we convert to higher rise, we get 3X the number of cars trying to exit onto the Stroad.
Madison, WI is a similar issue. Because of the lakes and hills, there are few thru-street grids. There is a lot of greenspace, but that also stops the megapolis grid street traffic flow you see in old Milwaukee and old Chicago. Transit times are longer because there aren't thru-stroads in many parts of town, causing multiple transfers if you need to go around a lake.
Central Chicago has good transit, much of it off-street. So to cover higher rise infill, you could just run more transit units on the same existing ROW.

And we can't ignore the affordability issue. In both Houston and Madison, the infill units are NOT affordable. Two bedroom apartments cost more than their neighbor's house mortgage for houses that haven't been purchased in the last 3-4 years. So a 4 story would solve the housing availability problem for the more affluent, but they're NOT affordable for middle and lower income locals.