Special Report: Foreclosures, block by block

Milwaukee Neighborhood News Service, in collaboration with the Diederich College of Communication senior journalism capstone course, tells the story of how five central city communities are working to overcome sometimes-daunting obstacles to stabilize their neighborhoods after the foreclosure crisis.

By Matt Wisla

The financial crisis that encircled the globe in 2008 brought devastating levels of home foreclosures to Milwaukee’s central city neighborhoods. The effects are continuing to be felt today as the city and many residents struggle to recover.

This special report delves into five Milwaukee neighborhoods: Clarke Square and Layton Boulevard West on the South Side and Harambee, Lindsay Heights and Washington Park on the North Side, focusing on the human impact of foreclosed and vacant housing and the difference committed neighbors can make.

The housing crisis began in 2006 with the subprime mortgage crisis and destabilized neighborhoods as it gathered momentum. While foreclosures were driving down property values, vacant homes were becoming havens for crime. Neighborhood residents, community organizations and elected officials responded, focusing their respective resources and talents on resolving, or at least lessening, the worst effects of the crisis.

Before the housing bubble burst the city typically owned fewer than 100 foreclosed residential properties at any given time. Today, the city owns 1,100 foreclosed homes, according to Aaron Szopinski, Milwaukee housing policy director. He estimates that banks own an additional 1,500 foreclosed properties. And there are approximately 2,800 vacant homes throughout the city, many of which could be foreclosed soon if the owners don’t pay their mortgage or taxes.

Each of these estimated 5,400 foreclosed or abandoned properties had once been home to a family. Boarded up and in disrepair, today they consume police and other city services to provide minimal upkeep such as mowing the grass and shoveling the snow. Most are red ink in the city budget since they are no longer on the tax rolls.

Washington Park resident Bobby McQuay Jr. said the neighborhood used to have the occasional boarded-up home. But when foreclosures and home demolitions started occurring in previously stable parts of the neighborhood, “that’s when you knew something really bad was happening.”

Foreclosed homes tear at the fabric of neighborhoods by increasing drug trafficking, prostitution and other crimes, often committed by gangs. To neighbors living around them, foreclosed homes are a safety threat, a nuisance and an eyesore.

Once a home has been demolished, local residents or the city sometimes plant a garden or build a playground. “It’s a great-sounding situation, but how many gardens can you build in the city? And what happens to the people who lost those houses?” asked Rev. Willie Brisco, president of Milwaukee Inner-city Congregations Allied for Hope.

In late 2007 and into 2008 the deepening economic downturn was fueling unemployment throughout the city and foreclosures were increasing. “We needed to get people moving back into those homes as quickly as possible,” Szopinski said.

Community organizations such as ACTS Housing began working on programs within the city’s Strong Neighborhoods Plan to provide home-buying services to support low-income buyers. “We often work with people who may have never thought homeownership would be for them,” said Michael Gosman, assistant director of ACTS.

The city’s response emphasizes homeownership over demolitions. “Our objective is responsible homeownership,” said Sam Leichtling, program director of the city's Neighborhood Improvement Development Corp. Nevertheless, neighborhood residents and community activists point to the approximate 400 home demolitions in 2014, a record for the city. The city has sold approximately 1,300 foreclosed homes to new owners during the last five years, increasing the taxable value of homes and saving money in maintenance and management costs, Szopinski said.

In 2015, the city will spend $10.3 million on home loan programs, code compliance loans and other programs. Some city programs allow qualified buyers to take the keys of a rehabilitated, previously foreclosed home for $1. Others provide forgivable loans, or lease-to-own plans that help renters become homeowners.

“Every day we see families who put in incredible amounts of work to make these very challenging properties a home,” Gosman said.

From falling property values in Clarke Square to the Turnkey Renovation Program in Layton Boulevard West; from Habitat for Humanity’s initiative in Washington Park to a Lindsay Heights’ couple’s inspirational commitment to reinvigorate their neighborhood; from flames to frustration in Harambee, foreclosure in Milwaukee is a citywide story, but also a personal one.

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Milwaukee Neighborhood News Service is a project of United Neighborhood Centers of Milwaukee (UNCOM).