Milwaukee Habitat for Humanity plans to double its yearly affordable housing construction from 20 homes in 2022 to 40 by 2028.
The plan, backed in part by $4.2 million in American Rescue Plan Act funding given to Habitat by Milwaukee County, comes amid dual crises of rising housing costs and declining home ownership, especially among Black and Latino families.
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At a Tuesday morning groundbreaking in the King Park neighborhood, Brian Sonderman, Milwaukee Habitat’s executive director, announced a plan to build 80 homes in the King Park and Midtown neighborhoods, describing the County’s financial contribution as a “down payment” on the construction.
Private donations and public grants will fund the additional construction costs, explained Jake Brandt, Milwaukee Habitat’s director of marketing and communications.
Milwaukee County Executive David Crowley was also on-hand at the groundbreaking, which drew more than 50 Habitat employees and volunteers, as well as representatives of a half dozen Milwaukee businesses who had donated more than $100,000 to support affordable housing construction.
Crowley touted the event as the first ever collaboration between Milwaukee County and the local Habitat affiliate. He also spoke about his own experiences with housing insecurity, including the three evictions his family faced before he turned 15.
“For me, this is a dream come true,” Crowley said. “Because I know that there’s so many young people, so many families out there who are still struggling because they cannot have a roof over their head.”
Milwaukee has a vast racial gap in homeownership
A theme that speakers returned to throughout the groundbreaking was attempting to reduce the gap in homeownership rates between white, Black and Latino families in Milwaukee County.
The City of Milwaukee has a white homeownership rate of 55.8%, while its Latino homeownership rate is 38.5%, and its Black homeownership rate is just 25.2%, according to a 2022 report by the Wisconsin Policy Forum.
To end racial disparities in homeownership in Milwaukee would require the creation of 32,000 new Black and Latino homeowners, said Teig Whaley-Smith, the chief alliance executive at the Community Development Alliance.
The Community Development Alliance is a group of city departments, housing nonprofits, developers and philanthropic groups that in 2021 authored a strategic plan for affordable housing, with the goal of “advancing racial equity by providing a quality affordable home for every Milwaukeean.”
While Waley-Smith estimated that fully closing the racial gap in homeownership would take decades, he saw the increased construction by Habitat, as well as the heightened investment by Milwaukee County in affordable housing, as a step in the right direction.
He credited “the vision of Milwaukee County, to bring in state funds to do homeownership in a way that has never been done before and on a scale that has never been done before.”
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Waley-Smith also cited the 3,000 vacant lots in the city as an asset for these efforts, because houses could be built on the lots more inexpensively, and they could fit in neighborhoods of color.
The Tuesday groundbreaking was at one such lot, tucked between two houses on West Kneeland Street. The site is slated to become a future Habitat home.
On top of the planned construction in King Park and Midtown, Habitat has already begun constructing new housing in the predominantly Black neighborhood of Harambee, where the group plans to build 11 houses by the end of 2023, and 80 by 2025. The group had already constructed 29 homes by the start of 2023.
Brandt credited the County’s use of ARPA funds, as well as a $5.75 million donation the group received from billionaire MaKenzie Scott, the single largest donation in the group’s history, for the dramatic expansion in construction.
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A final stream of funding for affordable housing announced at the groundbreaking was an additional $1.6 million in ARPA funds that Milwaukee County is sending to the Emem Group, a Milwaukee real estate developer, to build 40 affordable rental units, in the form of 20 duplexes, within King Park and Midtown neighborhoods.
The units will have rents between $450 and $850 a month, in order to target renters with incomes roughly between $30,000 and $50,000 a year, according to Michael Emem, the CEO of Emem Group.
The units will each be three-bedrooms, Emem said at the groundbreaking. The median rent for a typical three-bedroom property in Milwaukee is currently $1,495, according to the rental manager website Zillow.
Habitat also will be involved in the construction of these rental units, serving as a general contractor, Brandt described. In return, after 15 years the Emem group will sell the 40 units to Milwaukee Habitat, who will then sell them to first-time homebuyers, the same as any house built by Habitat.
Sonderman described the collaboration with the Emem Group as “unique,” noting that Habitat had not participated in a similar collaboration before.
How does the Habitat model work?
Sonderman opened the groundbreaking by trying to clear up what he saw a common misconception with Habitat.
“Many people think about us as a construction company,” he said. “But I’m here to tell you that Milwaukee Habitat is so much more than a construction company. At our core, we are a homeownership organization.”
Any person looking to become a first-time home buyer, within certain income guidelines, is eligible to apply for a Habitat home.
The organization promises a new home, with an average mortgage payment below $950 a month.
In return, home buyers perform “sweat equity” where they volunteer a minimum of 210 hours assisting in the construction of their home.
For Johanna Jimenez, a speaker at the groundbreaking, this model changed her life.
Jimenez described how two decades ago, she was living in subsidized public housing, with three young sons, and working a full time job, all while attending college.
She credited much of her success in life — becoming a two-time college graduate, the owner of a real estate company and a community leader — to her ability to get a home through Habitat in Washington Park in 2007.
“I became part of a community, and a community that was full of committed, caring, active, stakeholders that wanted to improve their neighborhood, ” Jimenez said. “The community became my inspiration to go out to advocate for others, like me and my family, who never dreamed about the opportunity of homeownership.”
