Land Trust Unveils Forever Affordable Homes

JoAnna Bautch and Lamont Davis cut the ribbon on a renovated home at 2655 N. 16th St. Photo by Jeramey Jannene.

The Milwaukee Community Land Trust (MCLT) is ramping up its work to create a new supply of quality, owner-occupied, affordable houses in the city.

The organization, with development partner VIA CDC, unveiled four newly-renovated houses Wednesday in the Lindsay Heights neighborhood. They join a house the partners completed late last year, and have now sold, in the Muskego Way neighborhood on the city’s South Side.

An ownership model splits the land from the house above, allowing future residents to build wealth and MCLT to ensure the house remains affordable through multiple owners.

“We get these homes down to the studs and we build them back up, transforming them into affordable, safe and quality homes for income-qualifying families,” said VIA executive director JoAnna Bautch, at a press conference on N. 16th Street in front of one of the homes. “We believe safe and affordable homeownership is the foundation to strengthening our neighborhoods.”

“Today, as we dedicate these four homes under the Milwaukee Community Land Trust, we celebrate not only the tangible bricks and mortar, but also the profound impact this project will have on individuals and families in our community,” said MCLT executive director Lamont Davis.

VIA’s partnership with MCLT allows the community development corporation to make the house affordable beyond just the initial sale. “We could not have made permanent affordability without the Milwaukee Community Land Trust,” said Bautch. VIA assembles financing, through a number of sources, to renovate a formerly vacant home and MCLT provides financing to lower the initial purchase price for a qualifying buyer.

In an example from 2022, the MCLT would buy and rehabilitate a house for $110,000 and sell it to a family for $80,000. The structure would create a $650 per month payment, suitable for a minimum annual income of $27,900. Assuming the family decides to sell after five years and could yield a market price of $127,500, they would instead be paid $13,400. Of that, $5,000 would come from the 1.25% appreciation formula and $8,400 would represent the amount they paid down on their mortgage. The MCLT would then find the next owner-occupant at a below-market price of $85,000, recycling the subsidy.

The press conference was held in front of a 2,192-square-foot home at 2655-2657 N. 16th St. A former duplex, the city had taken possession of it via property tax foreclosure in 2021. VIA, through its Turnkey Renovation Program, reports investing $249,000 in the property, including buying it for $1. Financing came from the city’s MERI 2.0 program, HOME funds allocated by the city’s Community Development Grants Administration office and Tri-City National Bank.

The four-bedroom house is now listed for sale for $90,000, yielding an estimated monthly payment including insurance and taxes of $1,031. A family with a minimum income of $42,931 is sought to become the next owner of the house, originally built in 1899.

In order to close the gap between the sale price and what VIA needs to recover beyond its grants, MCLT is using excess funding from a tax incremental financing (TIF) district. State law allows the city to harvest one year of incremental revenue from a TIF district for affordable housing before closing it, a practice it does regularly. The Common Council allocated $200,000 to MCLT in 2022.

Davis thanked the Department of City Development and Alderman Russell W. Stamper, II for their support. “Their vision and commitment to affordable housing solutions have paved the way for the success we celebrate today,” he said.

The four houses unveiled Thursday are all located just south of W. Center Street. They include the four-bedroom home at 2655 N. 16th St., a three-bedroom, 1,405-square-foot home at 2578 N. 16th St. ($75,000), a four-bedroom, 1,314-square-foot home at 2532 N. 14th St. ($75,000) and a five-bedroom, 1,924-square-foot home at 2553 N. 14th St. ($87,000). Buyers will find windows replaced, all new appliances and electrical systems, a new roof and substantial other upgrades.

Interested in buying the houses? Applicants must first attend an orientation session, have a household income of less than 80% of the federally-defined area median income ($60,400 for a family of two in 2022), be able to secure a conventional, 30-year mortgage on the property and submit supporting documentation. Individuals interested in the process can visit the MCLT website.

The land trust strategy is viewed by city officials and affordable housing advocates as one of many efforts that will be needed to address the stark racial disparities in homeownership in Wisconsin. The city and MCLT continue to find ways to work together on this, and a host of private partners are signing on to support the land trust.

MCLT was selected by DCD as one of the winning bidders to participate in the federally-backed Homes MKE program that aims to renovate 150 vacant, city-owned homes using $15 million in American Rescue Plan Act funding. Davis said his group hopes to ultimately renovate 20 homes through the program, but of the first 10 it received it needed to return five because of the poor condition they were in.

VIA continues to move forward on its growing housing efforts. Bautch said its Turnkey Renovation Program, launched in the wake of the Great Recession, will celebrate its 33rd renovation by year’s end. It will also begin two new construction home efforts in the coming months. One is a partnership with LISC Milwaukee and the Community Development Alliance to build new houses for early childhood educators near the facilities where they work. The other is a new model, the Lange Urban Sustainable Homes (LUSH) system, that aims to reduce construction time and material waste. Three model homes will be built across the city. Bautch told Urban Milwaukee the organization hopes to eventually build 10 homes per year.

Northwestern Mutual recently provided MCLT with a $2.5 million, low-interest loan to help the organization expedite its work. It has also received support from the Zilber Family Foundation, LISC Milwaukee, Associated Bank, Otto Bremer Trust and the Greater Milwaukee Foundation.

Those looking to support the land trust can join for $1 per year. The organization is governed by a volunteer, member-elected board. According to its website, Teresa Thomas-Boyd is the president, Antonio Butts serves as vice president, William Kopka is the secretary and Mikal Wesley serves as the treasurer.

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