Developers Must Monitor Homes on Hold
Under new policy, developers must watchdog city-owned homes held for them to buy.
At any given time, the City of Milwaukee typically has approximately 1,000 properties in its inventory that it acquires via property tax foreclosure. And with that comes a host of challenges, from shoveling snow and mowing the grass to illegal dumping and squatters.
A new city policy will turn prospective bulk home purchasers into the city’s eyes and ears on their future properties.
The Department of City Development (DCD) puts homes on “hold” for developers that are seeking to buy multiple properties and redevelop them. Two such proposals recently received Common Council approval. FIT Investment Group and Gorman & Company will both buy over 20 properties if awarded low-income housing tax credits and turn them into state-regulated affordable housing.
DCD real estate services manager Amy Turim said the contract with prospective buyers will now ask them to monitor the properties for signs of break-ins or other problems. The policy suggestion came out of the Common Council’s 2020 budget deliberation process.
“If you’re asking us to hold it, you should be watching it to let us know those things,” said Alderwoman Milele A. Coggs on Tuesday morning when the policy was reviewed Tuesday by the Zoning, Neighborhoods & Development Committee. “The truth is DCD is challenged to maintain and keep eyes on all of the properties we have.”
Developer Michael Adetoro, who leads FIT Investment Group, was the first to agree to the new policy. His firm is seeking to redevelop 40 units of housing in the Washington Park neighborhood. It would buy 24 properties from the city. Adetoro and Gorman both expect to learn in April if they’ve been awarded tax credits to advance their proposals.
Future prospective buyers will be required to comply with the agreement, but the policy is not retroactive.
Alderman Jose G. Perez asked if the developers will be required to shovel snow and mow the grass. No, said Turin. “They would report that to us” that this is needed “and we would handle it through our vendors appropriately,” said Turim. DCD deputy commissioner Martha Brown said the city has contractors for the work already that are likely servicing nearby properties.
Coggs suggested the city explore an option fee on the property charged to developers for keeping the homes on hold.
“I think we want to be cautious about putting up any barriers to those individuals,” said Brown, noting that many like Adetoro are small or startup developers. But the deputy commissioner pledged to examine the matter further.
Committee chair Ald. Khalif Rainey asked how many homes are put on hold and ultimately sold.
“That’s a question I can’t answer,” Brown said, while pledging to provide more data. “The most common situation we’re talking about is when a developer is seeking low-income housing tax credits,” said Brown. “I would be very interested to know” the number of held homes sold, Rainey emphasized.
Turim said one thing the city has learned in recent years is to avoid extending the holds for multiple years. Extending a prior hold for Gorman over multiple years resulted in a handful of properties having to be removed from the list because they were damaged in the interim, one of the things the new policy is intended to prevent.
Excluding the holds and other properties that are leased or kept off-market, Turim said the city currently has 300 homes marketed for sale.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits, all detailed here.
Related Legislation: File 191651