Increase In Out-Of-State Landlords Purchasing Property In Milwaukee Changing Neighborhoods
About 6,000 properties, or 14% of Milwaukee’s rental homes, are owned by out-of-state landlords, according to Marquette Law School’s Lubar Center for Public Policy Research and Civic Education. In 2015, that number was 4,600 and in 2000, it was 1,500.
In a recent article from the Milwaukee Journal Sentinel, longtime investigative reporter Cary Spivak dives into why investors from across the country are buying up properties in Milwaukee.
“These companies have figured out it’s more profitable to go into a city and purchase in volume, many single-family homes or duplex’s, they want to have enough properties to make it worth their while,” he explains.
But what is the difference between renting from a local company or landlord versus one that is located outside of Wisconsin? For one, Spivak says, getting issues with the property resolved can become increasingly difficult.
“If you’re renting from an out-of-state landlord, let’s say in Florida or California, and you have a minor problem in your house, it could be more difficult to deal with them than the traditional landlord of being the guy down the block, or even if it’s a local company, at least there’s someone local you can find and talk to,” he says.
While some of these companies do hire local managers or start a local office, there is still often a large distance between the owner of the property and the tenet.
Spivak found one property company named Milwaukee Capital, despite being located in Houston and the owner living in California, that banned their Milwaukee managers from giving out information about the owner.
These investors don’t just cause issues for renters but can also make it harder for people looking to buy their own home by paying for houses in cash and outbidding other prospective buyers, Spivak says.
“Companies that are coming in to purchase have the money [in cash], so you can get pushed out on that end, but not only that, if you bid it up a little bit, that could put a house down the block out of reach for you because they’re bringing the value of properties up a little bit or a lot depending on where it is,” he says.
This has neighborhood groups worried that people could be forced out as fewer homeowners are able to put down roots in a community.
Some politicians are also concerned, with Milwaukee Common Council President Cavalier Johnson calling these companies “disconnected absentee landlords." But Spivak says the road for legislative change is difficult.
“Since 2010, there’s been more than 100 changes in state landlord tenet law, almost all of them favoring the landlords,” he says.
According to Spivak, nearly a quarter of state Legislators are landlords themselves, among them Assembly Speaker Robin Vos. The state has even loosened restrictions on how close a building contact person has to be to the property itself.
“The history of our state Legislature in recent years has not been open changes and a lot of benefits to tenets, they’ve been more sympathetic to the landlords,” he says.