Milwaukee Journal Sentinel
When Mayor Tom Barrett presents his 2021 proposed budget Tuesday, it will set aside about $6.5 million for housing and homeownership in the city.
“Particularly in this time of social unrest and a fight for racial justice and racial equity, we thought that this is the perfect time to really make a bold statement about our commitment to housing in Milwaukee,” Barrett told the Journal Sentinel.
“And we’re doing this in what is without a doubt the most challenging budget that we have faced in years,” Barrett said.
Milwaukee, which was already hard-pressed financially, has been not been immune to the economic fallout from the coronavirus pandemic, which has hit government budgets hard.
The housing funding was made possible by a tax incremental financing district that has expired.
That allows the city to use the remaining funds for housing instead of closing the district and adding its increased value to the property tax base.
Milwaukee’s low Black homeownership rate
Homeownership is a means through which many Americans build wealth. But Milwaukee has significant disparities among Black and Latinx residents and white residents.
Milwaukee has the second-lowest Black homeownership rate (27.2%) among the nation’s largest metropolitan areas, according to a July report by the University of Wisconsin-Milwaukee’s Center for Economic Development.
That’s tied in part to decades of banks’ refusing to provide mortgages in predominantly Black neighborhoods that had their boundaries literally drawn on maps in red ink — leading to the term “redlining.”
The largest redlining settlement ever initiated by the U.S. Department of Housing and Urban Development involved $200 million provided by Green Bay-based Associated Bank for home loans in Milwaukee and other predominantly minority Midwest markets. That settlement, in which the bank admitted no wrongdoing, was in 2015.
The proposal is meant to lead to more racial fairness in the city, Barrett said.
Barrett will propose using $1.4 million for a grant program meant to help about 200 families purchase homes. The program would mainly be for parts of the city where homeownership has lagged.
Barrett said the idea now is that people who are at or below 80% of the median family income for the county would be eligible. That amounts to an income of up to about $67,000 for a family of four for 2020, according to federal guidelines.
He is also looking to allocate $1.5 million to housing-cooperative and land-trust programs, which can be used to tie the benefits of rising property values to the properties themselves instead of individual owners. The goal is to help neighborhoods raise their values, he said.
In a housing cooperative, a non-profit owns real estate and allows people to buy shares in the property in exchange for the right to live in a unit, whether that be a house or a multi-family building. When cooperative members sell, the system helps make sure the real estate remains affordable for subsequent buyers.
The mayor’s budget will also propose putting $1 million into the city’s Housing Trust Fund, which offers grants and loans to build and rehabilitate affordable housing. Barrett said in past years, about half that sum has been put into the fund each year.
He’ll also be proposing to put:
- $700,000 into the Milwaukee Employment/Renovation Initiative, which provides workforce development grants to rehabilitate Sherman Park neighborhood homes that are vacant and tax-foreclosed.
- $1.3 million into the Strong Homes program, which provides partially forgivable loans to homeowners to help with repairs.
- About $500,000 into a program that allows the city to dispose of properties.
“We believe that bringing up that homeownership rate is good on several fronts,” Barrett said. “We think it’s good for the individuals themselves, but we also think it leads to stronger neighborhoods as well because of the investment that’s being made, both the financial investment but in many ways the psychological investment.”
– Call Alison Dirr at 414-224-2383 or write to her at [email protected] Follow her on Twitter @AlisonDirr.