Report Finds Affordable Housing Problems

A new Wisconsin Policy Forum report attempts to identify challenges and solutions for a malady of housing issues facing Milwaukee, including racial disparities, evictions, a declining homeownership rate, aging housing stock and a growing number of rent-burdened households.

Through interviews with 61 organizations and firms involved in housing development or services, the forum worked to measure progress, challenges and overlaps and gaps between governmental and nongovernmental services.

Organizations interviewed ranged from neighborhood-focused entities like Sherman Park Community Association to citywide actors like ACTS Housing. Developers interviewed include leaders like Gorman & Co. and up-and-coming firms like FIT Investment Group.

The report found that, in 2019, a below-average total of 1,270 units of affordable housing were created, 2,347 prospective homebuyers received services (at a cost of $3.2 million), 1,118 units of supportive housing were maintained ($5.4 million), 1,158 homeowners received home repair assistance ($11.3 million), 1,001 renters received financial assistance (more than $1.8 million) and $2 million was spent on housing advocacy services.

Funding for each effort was identified as a challenge. The number and capacity of nonprofit housing developers were also identified as bottlenecks.

The report, Expanding the Blueprint, was authored by senior researcher Joe Peterangelo and forum president Rob Henken.

Through the interviews, the authors identified four current priorities: creating rental housing for very-low-income households, developing more affordable and mixed-income housing near job centers, eviction prevention in the wake of the pandemic, and increasing the supply of middle-market housing for those that do not qualify for subsidies.

Four key gaps in services were identified: creating more affordable housing in the suburbs, particularly for families; placing a greater emphasis on reducing racial gaps in homeownership; creating housing navigation services for renters to access services; and expanding access to credit counseling and financial education.

Of those gaps, one notable stride has been made to address the issue. A Rental Housing Resource Center was created to bring services from 10 partners under one roof in the Community Advocates office at 728 N. James Lovell St.

But of the seven conclusions, the last one illustrates the true challenge. “Milwaukee’s affordable housing challenges will not improve substantially until incomes rise,” says the report. WPF concludes that improving efficiency and funding for efforts will help, but the problem will persist as long as incomes remain low.

According to U.S. Census Bureau data, 31.5% of renter households earn less than $20,000 per year, while only 9.5% of units are available for $500 per month or less (30% of their income or less, which is considered an affordable cost).

More than half of renter households (53.4%) spend more than 30% of their income on housing, compared to 43.2% in the state and 48.2% nationally.

Renters are not the only group spending too much on housing. According to the Census Bureau, 27.7% of Milwaukee homeowners spend more than 30% of their income on housing, compared to 19.8% in Wisconsin and 23.1% nationally.

Other conclusions in the report: respondents indicated that increasing the supply of new affordable housing units is the issue most in need of financial support and more of those new units should be targeted at very low-income households and located near suburban job centers. Other points made: new funding sources for supportive housing for renters with disabilities are needed, a short-term focus is needed on eviction prevention and increased collaboration is needed on many issues.

Solutions offered by respondents including expanding access to housing vouchers (of which the Housing Authority of the City of Milwaukee will receive an increased allocation through the American Rescue Plan Act) and a number of likely controversial policy changes that would require state support. These included limiting rental prices or property taxes based on formulas, changing the low-income housing tax credit allocation formulas to favor developments near employment centers and allowing for inclusionary zoning policies that require new development set aside units for low-income renters.

The report builds on a July 2020 report, Laying the Foundation, that identified potential efficiencies for the City of Milwaukee to strengthen the impact of its housing efforts.

The new report has a broader scope than the plan under development by the Department of City Development and Community Development Alliance. That effort, which relies in part on WPF research, is focused on households making between 20% and 80% of the area’s median income. The WPF report addresses lower-income households.

A copy of the full report is available on Urban Milwaukee.