The house in the 1100 block of West Chambers Street was a little run down, but as soon as Rae Johnson saw it, she knew it would make the perfect home for her and son, Elijah.
“I’m the first homeowner in my family. It’s fantastic,” Johnson, 37, said. “My grandmother is 77 and does not own a home.”
She credits participating in a homebuyers’ program with Acts Housing in 2019 for preparing her to purchase her home, a Milwaukee-style bungalow in the Lindsay Heights neighborhood.
The counseling she received helped her pay down her college debt, making her eligible for a mortgage, which she said is less than the $650 she paid for a tiny two-bedroom apartment on the city’s south side.
“I feel so proud and humbled,” she said. “It’s really life-changing. The day we close I don’t want to ever forget. I don’t want him to forget that day.”
Like so many, Johnson thought homeownership was not an option for her. But she wants everyone to know help is available.
With a $7.5 million grant from Wells Fargo Bank, more prospective buyers like Johnson can become first-time homeowners.
Mayor Cavalier Johnson, Milwaukee County Executive David Crowley and officials from Wells Fargo announced the grant Wednesday.
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More:Despite $37M spent on homeownership programs, Black and Hispanic homeowner rates remain low, report says
The money is part of Wells Fargo’s Wealth Opportunity Restored Through Homeownership (WORTH) initiative. Wells Fargo has committed $60 million nationally through the initiative to address systemic barriers to homeownership for people of color. Milwaukee is the second of eight markets across the country to receive the WORTH grant. The first was Houston.
The first $2 million of the WORTH grant will help the Community Development Association to capitalize a housing acquisition fund, in conjunction with ACTS Housing, a nonprofit focused on increasing racially equitable homeownership. The fund will be used to purchase homes and resell them at affordable prices to city residents. The goal is to raise $10 million toward that fund.
RELATED:Milwaukee faces an affordable housing crisis and a racial gap in ownership. These influential groups are working to change that.
The announcement brings the CDA closer to its goal of raising more than $130 million over the next decade for the development and preservation of affordable housing for renters and homeowners.
The effort aims to level the playing field for Black and Latino homebuyers who lose out to out-of-state investors on a chance to own a home, said Teig Whaley-Smith, the Community Development Alliance’s chief alliance executive.
“Right now, we are losing 1,000 homeowners of color every year because of predatory acquisition with outside homeowners coming in and buying up the inventory of single-family homes and turning them into rentals,” Whaley-Smith said.
That coupled with systemic patterns of discrimination has disenfranchised homeownership among people of color. Milwaukee, he said, has the second worst Black homeownership rate in the country. White homeownership in Milwaukee is at about 56%, Latino homeownership is at 38% compared with Black homeownership at 27%, according to U.S. Census data.
“To reach racial equity in Milwaukee, we need to hit 32,000 new Black and Latino homeowners,” Whaley-Smith said. “These problems are centuries in the making. There was a time in our city’s, state’s and country’s history where people of color couldn’t own property up until the 1960s where you could legally restrict properties.”
The CDA’s goal is to create 5,000 new homeowners of color by the end of 2025, instead of losing 1,000 homeowners each year, Whaley-Smith said.
“We think there are 17,000 Black and Latino homeowners ready right now to buy a home that is $125,000 or less,” Whaley-Smith said. “But there are only 1,500 of those properties available every year and 40% of those are being purchased by investors.”
CDA will also use the $3 million of the grant to help with down payment assistance and scale homebuyer counseling programs. The remainder, Whaley-Smith said, will help create other innovative housing strategies, including turning vacant lots into entry-level homes and expanding partnerships to implement the city’s affordable housing plan. The alliance has nearly 100 stakeholders to bridge the city’s homeownership gap among people of color.
Johnson called the grant a unique opportunity to find solutions to housing insecurity — something he has experienced.
“Growing up in Milwaukee, I went to six different elementary schools, plucked out of classrooms midway through the year because of housing insecurity. We moved around so many times,” Johnson said.
Johnson said the grant represented a step forward in “combating racial disparities that are holding back entire generations of Milwaukeeans becoming homeowners.”
RELATED:Milwaukee received $44 million in federal funds for affordable housing. Here’s how the city plans to spend it.
“We must do all we can to reverse the trend of segregated communities right here in our own backyard,” Crowley said.
A July report from the University of Wisconsin-Milwaukee’s Center for Economic Development determined Milwaukee had the second-lowest Black homeownership rate (27.2%) among the nation’s largest metropolitan areas last year.
The current gap in homeownership is often blamed on a confluence of factors, including a history of racially restrictive covenants that prevented Black residents from purchasing in certain areas, the disproportionate number of Black residents hurt by the Great Recession and a lack of generational wealth and high incomes.
This initiative begins to address that history not only with strategies but with dollars, Crowley said.
The groundwork the city of Milwaukee, the alliance and its partners are doing to address the Black homeownership gap aligns with Wells Fargo’s mission to create 40,000 new homeowners of color by the end of 2025.
“They really have an in-depth understanding of what some of the challenges are historically and presently that contribute to the racial homeownership gap,” said Wesley Brooks, Wells Fargo’s homeownership lead for housing affordability philanthropy. “We are really confident that they are the right investment for us to really make a difference in that.”
Historically, the middle class has been built off homeownership in this country, he said. Government initiatives after World War I and II like the New Deal and the GI Bill helped propel this country’s middle class.
“Black families were wholesale left out of that growth,” Brooks said, noting that race played a role in that. Even today, Blacks who have achieved the American dream still see their wealth depleted by bad home appraisals or predatory lending.
“The solution has to be race-based,” he said. “By saying this is for households of color, we’re going to address the racial homeownership gap. We are being very intentional about it.”
Nationally, Black Americans have been hit hardest by skyrocketing housing prices prompted by the pandemic, according to research from the National Association of Realtors.
Deatra Kemp of Acts Housing believes homeownership is attainable. Many can afford a mortgage for less than what they pay in rent. The average mortgage payment for families going through Acts program is $868.
“There are too many dreams deferred in our community because of a lack of financial stability that comes with homeownership,” said Kemp, the organization’s vice president of programs. “We don’t have the collateral. We don’t have the assets to start our own business, or to send our babies to those schools or programs that they want to go to because we are not owners.
“We are generational renters. The system is broken. The system did that to us.”
Talis Shelbourne is an investigative solutions reporter covering the issues of affordable housing, environment and equity issues. Have a tip? You can reach Talis at (414) 403-6651 or ts********@jr*.com. Follow her on Twitter at @talisseer and message her on Facebook at @talisseer.
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