Wisconsin has a housing crisis. And nowhere is the lack of affordable single-family homes more evident than in Milwaukee’s mostly Black and Latino central city neighborhoods.
While the Great Recession and housing crisis of 2008 caused thousands across Wisconsin to lose their homes, the city of Milwaukee was acutely impacted, with 20% of its Black homeowners and 15% of its Latino homeowners losing their homes.
As those residents – many of whom held risky adjustable-rate mortgages that sent their payments soaring – lost their homes, private equity firms mobilized, snapping up formerly owner-occupied homes, at greatly reduced prices, and turning them into investment properties.
And as a result, a disproportionate number of Black and Latino one-time homeowners and their children – many of whom are now adults with families of their own – have been unable to purchase homes, either because there are no homes available for sale in the neighborhoods where they want to live, or because the credit products on the market aren’t designed with many working-class people in mind.
The most recent U.S. Census data indicates that in Milwaukee 55.8% of white households own their own homes, compared only 37.5% of Hispanic and 27% of Black households.
But as the city and county have begun to come to grips with Milwaukee’s home ownership gap – and its impact not just on individual families, but on neighborhoods as a whole – a group of nonprofits have come together to help restore home ownership in some of the city’s hardest hit neighborhoods.
The nonprofits’ efforts have begun to bear fruit – thanks in part to American Rescue Plan Act funding. But as federal and state dollars start to run out, organizations such as the Community Development Alliance, Acts Housing and Milwaukee Habitat for Humanity will need additional support from both the public and private sector to ensure the American dream is attainable for more Milwaukeeans.
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Housing practitioners, policymakers and community members participate in an exercise during the Community Development Alliance’s Forever Affordable Housing event.
Credit: Pat A. Robinson Photo[/caption]
Community Development Alliance: Providing a framework for change
Restoring homeownership in the city on a grand scale is a complicated task, but the Community Development Alliance has risen to the challenge.
Founded in 2011 by the Greater Milwaukee Foundation, Zilber Family Foundation, Northwestern Mutual Foundation and LISC Milwaukee in an effort to create greater cohesion across the community development sector, the CDA made a major impact with its release in August 2021 of the city’s first shared plan to create more affordable housing.
The CDA’s “Collective Affordable Housing Strategic Plan” set ambitious 10-year goals, including converting 7,400 blighted or investment-income homes in Milwaukee into owner-occupied homes and building 850 new affordable owner-occupied single-family homes.
It also called for an additional 20,850 homes in the city to be maintained as owner-occupied properties for families earning $67,000 per year or less.
Since it released its affordable housing plan, the CDA has been working with Acts Housing, Milwaukee Habitat for Humanity and other nonprofits, as well as funders in the public and private sector, including the Zilber Family Foundation, Wells Fargo, Northwestern Mutual and Bader Philanthropies, to develop processes and funding sources to build new houses, purchase and rehab existing ones and support financial resources – such as down payment assistance programs – to help would-be homebuyers.
According to Teig Whaley-Smith, the CDA’s chief alliance officer, the organization’s primary role is developing systems that implementors, including Acts Housing and Habitat for Humanity, can put to work.
“We build systems that cannot be built by one organization alone, either because the investment in research and development is too high, or the organization just doesn’t have the capacity,” Whaley-Smith said. “We do that through collective impact using a framework to bring people together, by making sure things are done through a racial equity lens and by collaboration with residents.”
Over the past 12 months, those systems have enabled the CDA’s partnering implementors to help 600 Black and Latino residents purchase homes, to assist with the construction of new single-family homes in the King Park and Midtown neighborhoods and to provide funding to purchase houses from investors so they can be rehabbed and become owner-occupied homes again.
In fall 2022, CDA and Acts Housing received a $7.5 million grant from Wells Fargo that will also go towards boosting homeownership among families of color. The money is intended to help the organizations create 5,000 new homeowners of color in Milwaukee by the end of 2025, by acquiring and rehabbing roughly 100 properties that would otherwise likely be owned by investors, scaling homebuyer counseling to support 1,000 families of color per year and maximizing existing inventory systems to make 75 starter homes available each year for families of color.
While Habitat for Humanity is one of few local organizations that has been able to produce starter homes on a large scale, the CDA has also spent time working with other developers and nonprofits on smaller projects.
On a recent September morning, Whaley-Smith stood in the audience as leaders and supporters of VIA Community Development Corp. celebrated the groundbreaking of a new home in Milwaukee’s Burnham Park neighborhood – one of three homes VIA CDC, a small community development organization (formerly known as Layton Boulevard West Neighbors), plans to construct through a partnership with Lange Brothers Woodwork Company and Lange Urban Sustainable Homes. The 1,100-square-foot starter homes will be constructed using LUSH’s prefabricated framing system.
VIA CDC had been focused on purchasing and renovating city-owned foreclosures, then selling them to low-income families, but recently found itself with few homes available to buy.
“We were running into barriers because there aren’t that many foreclosed properties available,” VIA CDC’s executive director JoAnna Bautch told BizTimes Milwaukee in June. “What there is a lot of, are vacant lots.”
But right around that time, Whaley-Smith introduced Bautch to LUSH to see if the two might work together to construct homes on a few of the roughly 3,000 vacant residential lots currently open in the city.
Members of the CDA’s staff also helped VIA CDC facilitate resident discussions in the neighborhoods where the LUSH homes will be built to help residents understand that even though the homes are designed to be built quickly and affordably, they will still be high quality. When Cordella Jones, resident collaborations director at the CDA, recently met with residents in the Washington Park neighborhood at a site where one of the LUSH homes will be constructed, she brought along a table-top model of the home for residents to inspect.
Because new housing developments in Milwaukee have not always been built with care and attention, the CDA’s focus now is on building quality housing, said Jones: “We’re making sure residents know that quality and energy efficiency and the opportunity to build yearlong is our goal.”
Jones also works to synthesize data about neighborhoods with a recognized need, so she can provide information on the number of potential homebuyers or the number of vacant lots – more than 1,000 in the Amani and Lindsay Heights neighborhoods alone – to city officials, developers or would-be funders.
In addition, the CDA is working to develop a credit product – one tied to rental payment history rather than a credit score – that would enable more Black and Latino residents to qualify for mortgages.
“The primary reason Black and Latino families are being denied credit is because they have a debt-to-income ratio higher than 40%. Meanwhile, they are paying rents that are between $1,200 and $1,400 a month, when a mortgage on a home would be around $1,000 a month,” Whaley-Smith said. “Every time we need to build a new system, we pull together a project team, we put together a business plan and then we go out and fundraise for it.”
Once the new product is developed, and the funding is there for it, the CDA will pass the implementation of the program to Acts Housing or another nonprofit.
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A crew works on the foundation of a home at 1217 S. 35th St. in Milwaukee’s Burnham Park neighborhood. The home is being constructed with the support of VIA CDC as part of a partnership with Lange Brothers Woodwork Company and Lange Urban Sustainable Home.[/caption]
Acts Housing: Creating homeowners
If the CDA is the architect that can help provide the money and the framework to help restore the city’s owner-occupied housing stock, then Acts Housing is the boots on the ground putting those systems to work every day.
Acts Housing was born out of a church effort to provide housing for Southeast Asian immigrants on the city’s near northwest side, and over the past 28 years, it has grown to become one of the city’s leading organizations dedicated to helping working class Milwaukee residents become homeowners.
The nonprofit works to provide homebuyer counseling, down payment assistance and real estate broker services to hundreds of Milwaukee residents. About a decade ago, it also developed Acts Lending, which has helped provide loans to clients who decide to work with the nonprofit to purchase and rehab distressed properties.
“I think we have about $8 million lent right now. That’s about 120 loans. And those are loans that we don’t want to compete with the banks on. This is a product that can’t be found anywhere else on the market,” said Kelly Andrew, Acts’ vice president of strategic partnerships.
Homebuyers who qualify for the loans are paired with one of the nonprofit’s rehab specialists who will work with them to get their new home renovated and up to code – helping them to find, vet and hire contractors, and ensure that the work those contractors do is up to snuff.
Although most of its clients purchase move-in ready homes utilizing traditional loan products, Acts is working with the CDA on its goal to create that new home loan product designed for people with strong rental histories, but weaker credit ratings. If successful, the product could drastically increase the number of people eligible for mortgages.
Restoring rentals for owner occupancy
To help address the lack of entry-level homes for would-be buyers, Acts is also taking the lead on the CDA’s efforts to acquire single-family homes from investors, and to keep houses sold by the city or other owners from falling into the hands of large, out-of-town investors.
The effort is designed to curb an explosion of investor purchases in north side neighborhoods. According to Whaley-Smith, three private equity firms alone have purchased 1,400 single-family homes in Milwaukee in the past five years.
“The goal is to try to capture some of that inventory back from investor-owners who might be offloading a portfolio of properties,” or to reclaim properties that have been converted into rentals but “really were intended to be owner-occupied when they were built,” Andrew said.
With the help of a $2 million allotment from the Wells Fargo grant, Acts Housing has been able this year to acquire 35 properties, of which it has sold six so far. The organization is contacting tenants of some of the properties it has recently purchased from investors to let them know that they now have the opportunity to purchase the houses they’ve been renting.
The money has also helped Acts Housing hire a team to purchase, manage and rehab those properties. The hope is that with the additional staffing, it can increase the rate of acquisitions.
While it will take time to back the thousands of single-family homes that have fallen into the hands of investors, Michael Gosman, president and chief executive officer of Acts Housing, said he’s been heartened to see a 2% increase in the number of Black homeowners in Milwaukee over the past few years.
The nonprofit sector often gets a bad rap for being uncollaborative, Gosman said, but the CDA’s leadership has shown that nonprofits and stakeholders can work together to “accomplish some really significant things.”
Habitat for Humanity: Taking a block-by-block approach
While Acts Housing focuses on turning investor-owned properties back into owner-occupied homes, Milwaukee Habitat for Humanity is working to increase the number of new homes it builds each year to fill some of the city’s 3,000 vacant lots.
The local chapter, founded in 1984, focuses on investing in specific neighborhoods, taking a block-by-block approach to its home construction efforts. Over the past two decades, the nonprofit has constructed hundreds of homes in the Midtown, Washington Park, Metcalfe Park and Harambee neighborhoods combined.
“One problem property on a block can change the entire trajectory (of that block),” explained Brian Sonderman, Milwaukee Habitat for Humanity’s executive director.
It’s the reason the nonprofit takes such a focused approach to its redevelopment work.
“You do one block at a time, and then you just start multiplying it,” Sonderman added. “That’s where we really see the transformative work, and that’s why we make multiple-year commitments to neighborhoods.”
This summer, the nonprofit announced plans to construct 80 single-family homes in the King Park and Midtown neighborhoods over the next four years as part of a partnership with Milwaukee County. The effort is being funded in part by a $4.2 million American Rescue Plan Act grant that the county was able to secure.
In many of the neighborhoods where Habitat has worked, the homes it has built represent some of the first construction of new homes on any scale in the past 60 or 70 years, Sonderman said, noting that the boost in homeownership in those communities has often led to a reduction in crime.
“It does move the needle. And it makes sense because people are more invested. They watch out for their neighbors. They take a greater interest in developing relationships, and that leads to block clubs, it leads to engagement with police, with city officials,” he said.
Habitat has already begun construction on some of the 19 homes it plans to build during the first year of the King Park-Midtown project. Each expected to be about 1,000 square feet in size with three bedrooms and one bathroom, the homes should be available by early 2025 for a purchase price of about $100,000.
Meanwhile, the nonprofit is also in talks with Bader Philanthropies to potentially construct another 40 homes in Harambee. Contractors and soon-to-be-homeowners are currently finishing the last of the 40 homes that Habitat has already built in the neighborhood over the past few years.
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Tiffany Nation and her family pose in front of a Milwaukee Habitat for Humanity house she bought in the Washington Park neighborhood in 2016.
Credit: Jake Brandt/Milwaukee Habitat for Humanity[/caption]
Accelerating construction of affordable homes
These new projects come as Habitat is making plans to double, and maybe even quadruple, the number of homes it builds annually as it works to help the CDA achieve new housing construction goals in the city. Historically, the nonprofit has built 20 to 25 homes in Milwaukee per year, but this year it’s on track to build 30. The nonprofit has stated it wants to build 40 homes per year by 2028, but Sonderman said the overall goal is to get to a point that Habitat is building 80 homes or more per year in Milwaukee.
The nonprofit has set its sights so high in part because CDA’s affordable housing plan set a goal of producing at least 100 new homes per year.
“We know Habitat is going to be counted on significantly towards that ambitious goal,” Sonderman said, praising the impact the CDA has had on affordable housing efforts over the past two years.
In addition to helping identify lots for the King Park project, the CDA also worked with the city to allow Habitat to construct 1,000-square-foot single-story homes as opposed to the 1,500-square-foot, two-story houses it has typically been required to build. The new, single-story homes will allow homeowners to age in place more easily.
“I’ve grown up in the Milwaukee area, and we’ve never had a strategy for affordable housing in this community that is comprehensive and that is actually getting things done,” Sonderman said. “The CDA is actually putting people together that oftentimes would work in silos, and they are now moving in the same direction. It’s a game changer for this community.”
Coming together to close the gap
As the CDA, Acts Housing and Milwaukee Habitat for Humanity work to achieve the goals set forth in the affordable housing plan, leaders say they will need the whole community to come together to support the effort, with business and philanthropic organizations making large-sum donations and volunteers offering their skilled construction expertise.
“We’ve raised $24 million over the last 12 months. About half of those dollars were American Rescue Plan Act funds, and those funds are now gone, so how do we replace those funds going forward to keep up our momentum?” Whaley-Smith said. “It costs $250,000 to build a house that we sell at $100,000. We can raise about $100,000 through public sources, but we are always looking for another $50,000 in additional funding for each build.”
According to Cathy Stagmer, manager of social responsibility initiatives at Milwaukee-based Komatsu Mining Corp., her company’s commitment to Habitat for Humanity stems from the nonprofit’s ability to create opportunities that can impact families and neighborhoods for generations. Collectively, Komatsu and the companies it has acquired in Milwaukee – Harnischfeger Corp. and Joy Global – have supported 49 Habitat projects since 1995.
Komatsu’s support for Habitat for Humanity also includes an annual employee fundraising campaign with a 100% company match, a charitable golf outing and the facilitation of more than 13,000 volunteer hours from employees since 2011.
“We wanted to find an organization that we knew was making an impact in the community that we could engage a lot of people in. So not just writing a check, but engaging our employees and volunteering,” Stagmer said. “There’s hardly a time our employees don’t hear about Habitat during the year. We’re very engaged in it.”
Collective action with powerful impact
If you ask Haynie Smith, he’ll tell you that the kind of work Habitat and other nonprofits are doing to increase homeownership in neighborhoods like Washington Park, where he grew up, is work that residents have long been clamoring for.
The 39-year-old businessman became a homeowner in 2017 after purchasing a home at 25th and Vine Streets, in the Midtown neighborhood, that Habitat had previously rehabbed. Prior to that, the father of three had twice been kicked out of rentals after his landlords failed to pay their taxes and their properties were foreclosed upon.
As the first homeowner in his family, Smith has inspired his mother and his sisters to begin the process of buying their own homes.
“People are tired of renting, and they want to have a place where they can call home. They want that leadership, and they’re tired of the leadership that they have with these so-called landlords that are not being responsible, or these property management companies that are not really being responsive,” Smith said. “They’re tired of that. So, it’s like, I got to get out of this. I want to change.”
Through the efforts of the CDA and its nonprofit and government partners – and with continued vital support from donors and volunteers – Gosman believes Milwaukee can move away from being a city with one of the widest gaps in homeownership between Black and white residents in the country to become a place where many more people and families are thriving and have a bona fide pathway to owning their own homes.
“That’s the list we can be on,” he said.
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Volunteers with Bridge Builders construct a fence for a new homeowner on North 37th Street during one of the nonprofit’s serve days.
Credit: Bridge Builders[/caption]
Bridge Builders battling blight by restoring community cohesiveness, reclaiming problem properties
As bigger nonprofits like the Community Development Alliance, Acts Housing and Milwaukee Habitat for Humanity work on large-scale efforts to rebuild Milwaukee’s housing stock, smaller local nonprofits are addressing blight and building back homeownership in different neighborhoods.
In the city’s Old North Milwaukee and Thurston Woods neighborhoods, those efforts are being led by Bridge Builders.
Founded in 2017 by pastor Kurt Owens, the nonprofit helps residents take a more active role in the health and safety of their streets by enlisting them to help battle blight, and perhaps even to purchase a home. The nonprofit started by focusing on a single square block of West Hampton Avenue, bordered by 40th and 41st Streets, but has since grown to “adopt” 140 blocks in the area.
Since its founding, Bridge Builders has purchased 12 houses and sold six to new homeowners. Some of the properties were foreclosed upon by a bank or purchased by the city before the nonprofit was able to acquire them.
“Anytime something becomes available, we’ll purchase the property. We have something that we call our ‘Reclaim the Block’ campaign, where we identify a problematic property and, rather than just shutting down the drug house or the prostitution house, we’ll try to buy it. And once we buy it, we renovate it,” Owens said, adding that his organization typically installs new kitchens, bathrooms, flooring and HVAC in each house they purchase. “We want to make sure that a new homeowner coming through our community is going into a really nice, safe, affordable house, so we’re consistently acquiring properties, renovating those properties and spearheading home ownership.”
When Bridge Builders is not buying and fixing up homes, the organization works with existing homeowners, some of whom are elderly and need a little help, to spruce up their properties. It also puts pressure on problematic properties, like drug houses or dilapidated rentals run by absentee landlords, by reporting code and nuisance violations to the city.
To help address crime and build neighborhoods where community members are engaged with one another, the nonprofit also established an initiative, known as the Model Block project, in which community organizers operate so-called Hub Houses and Lighthouses to help support residents.
The Hub Houses generally serve a six-block area and are staffed by an operations pastor and a community pastor who team up to unify residents and find out what problems are occurring in the neighborhood, Owens said.
Lighthouses typically exist on each of the six blocks served by a Hub House, and Lighthouse leaders – residents living in these homes – serve as a go-to resource person for residents of the approximately 36 homes on each square block, much like a neighborhood watch captain.
“The resident of the Lighthouse is in constant engagement with the residents and hearing what their concerns are and helping them meet some of their needs,” Owens said.
Other initiatives include “serve days,” when neighbors and volunteers are asked to go out and help with yard work or construction projects, like repairing or building a fence. To help fight crime, Bridge Builders also distributes Ring floodlight cameras, so neighbors can keep an eye on their properties and those of their neighbors.
“Our mission is to inspire inner city innovation that will holistically transform neighborhoods one block at a time,” Owens said, adding that although the nonprofit’s mission is based in Christianity, religion itself doesn’t play an outsized role in its work. “We want to love on people where they’re at, and try to improve people’s lives where they’re at, whether they ever come through the doors of a church or not.”
