Milwaukee And The Housing Crisis

Jennifer Epps-Addison is a wonderful woman and a great asset to the Milwaukee area.  Unbeknownst to me until recently, she also does this thing called blogging at the Milwaukee Journal Sentinel.

She recently penned a must read article about how Milwaukee is the third hardest hit community of its size when it comes to the housing crisis and how a large percentage of Milwaukee area families are facing the risk of losing their homes which went underwater due to the Bush/Cheney recession of 2008.

Even more significant is the solution she offered:

The housing crisis is far from over, so what do we do? How do we make a dent when the problem is so widespread? The authors of the report (housing experts at several universities across the country) argue that market forces alone will not bring the recovery to these severely impacted communities. They call for loan holders to take responsibility for causing the crisis in the first place. Where loan holders fail to act, the authors call on elected officials and local municipalities to use all of the tools available to them to help right the ship.  I couldn't agree more!

We need local and federal action to address the crisis and ensure a real recovery- one that puts people over corporate subsidies and doesn’t leave entire neighborhoods behind. First, loan holders and investors should reduce the principal on underwater mortgages to current market values. Banks and enterprises like Fannie Mae and Freddie Mac claim they don’t want to foreclose, but when people can’t get out of their mortgage by selling, foreclosures are bound to happen. If loan holders refuse to act responsibly, we should use local and federal options to facilitate turning already foreclosed homes and vacant properties into affordable housing by selling them to publicly owned or nonprofit entities. One community that has an innovative plan to address underwater mortgages by using “reverse eminent domain” to resent [sic] home values to their current market value is Richmond, California. Certainly, the City of Milwaukee should look at this option as one potential tool in their toolbox.

We don’t have to continue to sit back and watch our community’s ability to build generational wealth completely disappear. The Wisconsin Idea demands that our elected officials explore all options at their disposal to more effectively address Milwaukee’s housing crisis. In the end, we cannot begin to address the impacts of segregation and poverty, without addressing the nearly 40 percent of homeowners that are underwater in Milwaukee.

The Housing Crisis That Austerity Built

The news for Milwaukee's housing situation and the skyrocketing number of foreclosures keeps getting worse and worse:

Mayor Tom Barrett's multipronged effort to address the city's foreclosure crisis also confronts an unfortunate reality.

Just as the city has had moderate success selling some homes it took over in tax foreclosure, hundreds more may end up in city hands by the end of the year.

"The one thing to remember...is that we are three years behind the housing meltdown," said Aaron Szopinski, a former city budget analyst whom Barrett promoted to take over as the city's housing director. Normally, it can take several years between the time a homeowner stops paying taxes and the time when the city takes over the property.

"So what we took in last year (in tax foreclosures) is essentially what went delinquent in January 2011," he said. "We probably have a couple more years of this. We anticipated that when we put our plan together."

Barrett put $11.7 million in the city's 2014 budget for his Strong Neighborhoods Plan. The stated goal is to sell 350 homes in the city's inventory and demolish as many as 300 blighted or unsafe homes.

As of now, the city owns approximately 1,200 homes taken through tax foreclosure, most of them on the north side. At the same time, there are approximately 1,400 properties in bank-owned foreclosures.

The city treasurer's office estimates city lawyers will file foreclosure actions on as many as 1,100 more properties by the end of the year. Not all of those homes will end up in city hands; homeowners sometimes find a way to pay outstanding tax bills so they can keep their homes.

That so-called redemption rate — homeowners who avoid tax foreclosure by making good on their tax bills — has dropped in recent years, according to City Treasurer Spencer Coggs and Deputy City Treasurer Jim Klajbor.

In 2002, the redemption rate on homes headed for tax foreclosure peaked at 76%. In 2013, only 32% of the properties headed to foreclosure avoided it.

While the percentage of homeowners avoiding foreclosure has dropped, the percentage of homes taken over by the city has increased. Last year, almost 68% of the properties headed for tax foreclosure ended up in city hands.

The reason for the sharp increase in foreclosures and abandoned houses, as one could have guessed, austerity:

But the reason homeowners end up missing or not paying their tax bills hasn't changed much since the housing crisis of 2008.

"It is the economy," Klajbor said. "If people don't have the income, they can't pay the bills. Some people have not seen a raise, even if they are employed. That's still affecting things. And even if you are employed, you could be underemployed. Many people have had their hours reduced."

In other words, Scott Walker's agenda is still working! Through Act 10 and tax hikes on the poor, in order to pay off his campaign contributors and cronies, Walker has taken billions of dollars out of the economy.

And lest we forget, Walker has taken $26 million in federal money meant to help with the foreclosure crisis to fill holes in his budget created by his corrupt corporate welfare schemes.  Walker then commandeered  another $3.5 million that was meant to help raze the dilapidated homes.

Things are even worse in Milwaukee with Chris Abele doubling down on the austerity agenda by taking even more money from county workers and cutting more aid than even Walker.

But don't worry, the plutocrats are doing just fine.  They're building a 44-story Bic lighter on the lakefront, moving freeway ramps to make it easier for the 1% and are working hard on finding a way for the people to pay for a new arena even though they can't afford to keep their own homes.

The real kicker is when I point out these misplaced priorities, I get told I'm rooting for the city to fail.  If supporting people is failure, I hope we do fail in epic fashion.