Milwaukee might beef up housing rehab, acquisition

Published: June 7, 2010
Tags: foreclosure, grant, housing, Milwaukee, Milwaukee Neighborhood Reclamation, Prioletta, speculation, Steven Mahan

By Sean Ryan

Milwaukee is locked in competition with housing speculators for dominance in the city‘s residential foreclosure market.

City officials are considering dedicating $1.1 million in federal grants to acquire foreclosed houses and renovate them or demolish them so companies can redevelop the land. The federal grant money, which the city received in 2008, was dedicated to support new rental housing construction and a city program to help residents buy homes in their neighborhoods.

But the city did not use the money for new apartment construction because the state’s housing tax credit program financed most of those project costs and no one applied to use the homebuyer assistance program.

The city is ramping up its efforts this year to build up a bank of foreclosed housing properties, said Maria Prioletta, redevelopment and special projects manager at the Department of City Development. But private buyers who buy houses with cash, rent them out and do not maintain the property continue to challenge city efforts to increase homeownership, she said.

“There continues to be some amount of speculation in the marketplace,” Prioletta said, “and we just have to be vigilant to make sure those properties are well-maintained.”

Speculators can make deals to buy foreclosed sites more quickly than buyers who would live in the houses, Prioletta said, because speculators pay cash and do not require home loans. The city has partnered with private organizations to buy foreclosed properties and will only sell them to people who will live in the houses, she said.

But even if the city spends more money to buy the vacant properties for new owners, speculators will compete for sites the city cannot buy.

“We can’t be everywhere,” Prioletta said.

The city in 2009 created Milwaukee Neighborhood Reclamation Co. LLC, a private corporation that buys foreclosed houses. So far, it has acquired about 25 properties, Prioletta said.