66 Developers Bid To Rehab City’s Vacant Homes

Milwaukee’s $15 million proposal to renovate 150 vacant, city-owned homes is moving forward.

On Monday, the Department of City Development (DCD) announced the development teams, a mix of nonprofit and for-profit developers, that will participate in the first round of the Homes MKE initiative. The participants were selected from a request-for-proposals (RFP) process that generated a tremendous response.

The city will sell the houses for as little as $1, provide a development subsidy estimated at $75,000 based on the renovation cost estimates and grant a $5,000 workforce subsidy. After renovation, the properties may be sold to owner-occupants, rented out or placed into a rent-to-own program.

The program is designed to create affordable housing, expand the city’s tax base and create jobs.

“Growing up in Milwaukee, I experienced the effects of housing insecurity like many residents and families currently are. This is personal for me, so we are working to deploy the Homes MKE initiative to revitalize vacant residential properties into renovated homes,” said Mayor Cavalier Johnson in a statement announcing the participants. “Together with our partners in the development community, we are building stronger neighborhoods, promoting homeownership, and working to ensure every Milwaukeean has access to the quality, affordable housing they need.”

The selected developers are Acts Community Development, Advanced Investors, a partnership of FIT Investment Group and WestCare Wisconsin, Inc., Maures Development Group, a partnership of One 5 Olive and Milwaukee Community Land Trust, a partnership of Rico Love Foundation LLC and Mayfield Properties, Strong Blocks, CME Development, LLC, Even Life, Inc., Ezekiel Community Development Corp., Metcalfe Park Community Bridges, Servant Manor, T.A.S. Solutions, LLC and a partnership of Walnut Way Conservation Corp. the Silicon Pastures II, LLC and Walters Renovations, LLC.

The effort is being funded from the city’s $394.2 million American Rescue Plan Act grant. In spring 2021, Alderman Robert Bauman floated a proposal to fund the rehabilitation of all of the approximately 700 city-owned homes, before concerns about contractor capacity and competing financial demands resulted in a compromise proposal. The council approved the scaled-down plan in October 2021 and DCD issued an RFP in April.

The subsidy of up to $75,000 per home will be provided in four installments as work is completed. A property repair plan and market analysis will need to be completed by the development team for each property to determine the final subsidy.

Houses in the program are mostly located in an area bounded by W. Silver Spring Dr., W. Lincoln Ave., the Milwaukee River and N. Sherman Blvd. The aldermanic districts with the most city-owned homes are located on Milwaukee’s near North Side. The city acquired most of the homes in its inventory through property tax foreclosure. The program is focused on vacant houses. Tenants in a house at the time of foreclosure are allowed to continue living there with DCD assuming the role of landlord.

The city hopes to sell properties, both single-family houses and duplexes, in packages to developers.

“Under no circumstances may properties be ‘flipped’ to another investor-owner,” said the RFP. Unless the property is sold to an owner-occupant, the house must be developer-owned for at least five years. A deed restriction will require a sold property to be owner-occupied for five years and owners would be required to complete eight hours of home-buyer counseling through either Acts Housing, Housing Resources, Inc. or the United Community Center. A total of 66 proposals were submitted — an “unprecedented” number, a presentation by DCD said — with 15 developers selected.

To access the workforce subsidy, a developer’s workforce must include a minimum of 300 hours of work completed by unemployed or underemployed city residents. In addition, at least 50% of the work must be completed by employees residing in the following ZIP codes: 53204, 53205, 53206, 53208, 53210, 53212, 53215, 53218 or 53233. A living wage of at least $12.21 per hour must be paid.

Homes MKE in many ways resembles a scaled-up version of the Milwaukee Employment/Renovation Initiative (MERI) program. DCD launched the first phase of that program in 2017, with 104 home renovations completed by 2019 in an area centered around the Sherman Park neighborhood. MERI 2.0 was launched in April 2020.

DCD sold 249 improved properties (lots with a house, commercial building or another structure on them) in 2021 from its inventory of property-tax foreclosures. The city’s inventory of foreclosures, which is always turning over, surged as a result of the Great Recession.

The Common Council needs to approve the selected developers before DCD can enter into formal agreements with each party. That approval could come Sept. 20 at the council’s regularly scheduled meeting.