Despite $37 Million in Homeownership Programs, Low Rates for Blacks and Hispanics Persist

Milwaukee had the worst racial disparity in homeownership rates among nearly a dozen peer cities in 2020, with 26 percentage points separating the combined rate of black and Hispanic homeowners and the rate of white homeowners.

That’s just one of the findings of a Wisconsin Policy Forum report by authors Ned Littlefield and Joe Peterangelo examining how Milwaukee’s racial inequalities in homeownership compare to those of peer cities.

RELATED:June home prices were up and sales were down in the Milwaukee metro area; the lack of new homes is a “systemic problem” in the market; rising mortgage rates

This report builds on previous Wisconsin Policy Forum research indicating that the majority of black residents in Milwaukee are renters, with the impact of being rent-bound (spending more than 30% of income on rent) falling on black households at twice the rate of white households.

Its findings also suggest that Milwaukee government and organizational leaders may need to reconsider the effectiveness with which homeownership programs are used to build a black and Hispanic homeowner base.

RELATED:Black households never recovered from the Great Recession, according to a UW-Madison report on racial wealth gaps

Only one in four black households owned their own home in 2020, compared to more than half of white households in Milwaukee.

Here are some other key takeaways from the report:

  • The combined black and Hispanic homeownership rates were 28.9 compared to the white homeownership rate of 55.8%.
  • Even though the number of black households increased by 2.3% between 2010 and 2020, home ownership decreased by 24.6%. The number of white households in the city fell 12.2% and home ownership fell 15%. Only Hispanic households, which grew 24.7%, saw a corresponding increase of 19%.
  • Between 2010 and 2019, the city used 21% of its combined resources Community Development Block Grants (CDBG) and HOME Investment Partnership Program funds – totaling $37.5 million – for homeownership services.
  • With CDBG grants, the city spent $64 on home-based rehabilitation for every dollar spent on home-purchase financing. With HOME funds, the city spent $4 on home rehabilitation for every dollar spent on all other homeownership services.

Current housing disparities reflect the history of housing discrimination in Milwaukee.

Racial covenants prevented black residents from buying or renting homes in high-income areas. The Federal Housing Administration’s practice of redlining has devalued homes and reduced access to loans in communities of color. Black residents were even more likely to be targeted by subprime mortgages that led to foreclosures following the 2008 housing crisis.

New efforts to tackle the problem focus on the impact of this story.

Rates are low even though black and Hispanic residents use homeownership programs

The City of Milwaukee received approximately $20 million in CDBG and HOME funds, which represents two-thirds of the nearly $30 million the city received in homeownership programs between 2014 and 2018.

The majority of those who participated in the entire CDBG program were black and Hispanic between 2010 and 2019. Among investment fund users, there was also an overrepresentation of black households, which made up 55% of buyers and 56 % of owners to receive assistance between 1992 and 2019.

However, the funds for the acquisition of a house remain low. Despite the majority of grants and investment funds, these dollars have mostly been spent on home rehabilitation.

Of the roughly $30 million spent on homeownership programs between 2014 and 2018, only about $3.5 million was spent on increasing homeownership rather than improving it. assistance to existing owners for maintenance.

Between 2010 and 2019, 92% of CDBG funds went to housing rehabilitation and only 1.4% went to financing home ownership. Similarly, of the HOME funds used between 2011 and 2019, 81.7% was used for homeowner rehabilitation while 14.3% was used for home purchase assistance.

Even the average dollar amounts of grant funds used at home rehabilitation centers — $1,307 — were the second lowest per household in Milwaukee, the researchers calculated.

Everything from low savings and credit problems to undocumented residents without access to banks can be a barrier to home ownership, Peterangelo said. However, funding more financial assistance would likely increase homeownership, he said, citing Milwaukee’s new down payment assistance program as a successful example.

A targeted housing plan could fill the gaps

Milwaukee stands out from all of its peer cities, in that it lacks a single agency to oversee its housing programs. The researchers noted that having an agency could help the city more effectively coordinate its efforts to achieve racial parity in homeownership.

However, the city’s renewed focus on racial equity in homeownership is promising despite what the current numbers show.

The Milwaukee Community Development Alliance, made up of government, philanthropic, and community leaders, sought to combat the preservation and acquisition of homes by the city’s black and Hispanic residents.

The group has set a goal of preserving homeownership among the city’s communities of color while adding 32,000 black and Hispanic homeowners over the next decade in its master plan, the Strategic Collective Housing Plan. affordable.

CDA Master Plan:Milwaukee group calls for millions and policy changes to add more affordable housing and close racial gap between landlords

Released last fall, the plan received approval from the Milwaukee City Council this year.

Talis Shelbourne is an investigative solutions journalist covering the issues of affordable housing and lead poisoning. Do you have any advice? You can reach Talis at (414) 403-6651 or [email protected] Follow her on Twitter at @talisseer and message him on Facebook at @talisseer.

How are we? Complete this survey and let us know.

About Christopher Easley

Check Also

Botolan sells rice below P20

BOTOLAN, Zambales: Residents of this town now buy rice for less than 20 pesos per …