Milwaukee Sees Steep Decline In Homes Owned By City Residents Since Great Recession

Feb 4, 2020

The 2008 economic recession hit Milwaukee hard. The housing market wasn’t spared and with it came a wave of foreclosures. Property values still haven’t quite recovered in many neighborhoods throughout the city.

The Milwaukee Journal Sentinel recently reported that the city’s housing market shows a dramatic decline in owner-occupied residential properties, with hundreds of millions of dollars in housing wealth leaving Wisconsin.

The article was co-written by Mike Gousha, a distinguished fellow in law and public policy at Marquette University, and John Johnson, a research fellow at the Lubar Center for Public Policy Research and Civic Education.

The numbers reported were intended as a follow-up to a story looking at the impact of the end of Milwaukee's residency requirement. But Johnson says the data led them to a whole new trend from 2005 to 2019.

They found that 80% of homes were owner occupied in 2005, but that dropped to 69% at the end of 2019. Johnson says the numbers examine homes — that means single family homes, condos, duplexes, triplexes, and quadruplexes. This covers 70% of Milwaukee's residential housing units excluding apartment buildings.

These maps of Milwaukee show the percentage of homes occupied by the owner in 2005 (left) right before the Great Recession, and in 2019.
Credit John Johnson / Marquette University Law School

"It is a big difference, and it's a big difference compared to what have been historic norms," notes Gousha. "In the 1990s or early 2000s, owner-occupancy in Milwaukee remained pretty stable and that changed after the Great Recession."

The patterns also show that the city’s north, west and northwest sides are impacted even more. Owner occupancy has fallen by 20% or more in the 1st, 2nd, and 7th aldermanic districts, according to Johnson.

"People are, in some of the neighborhoods that I looked at, paying the entire value of the home their renting in four years — which is not a normal ratio for more economically advantaged neighborhoods in the city," he adds.

Gousha notes, "I think one of the key factors is the affordability of real estate in Milwaukee." While properties may be affordable to LLC ownerships, the same is not the case for individuals in the city.

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Currently, Johnson says there's $580 million worth of Milwaukee property values owned outside of Wisconsin — an increase of $396 million since 2005. This again impacts minority communites far more than the majority white neighborhoods of the city.

Since the Great Recession, homeownership fell 5.5 % in the majority white parts of the city. But homeownership fell by 10.3% in the majority Latino areas and 16.6% in the majority black neighborhoods.

"We've found that half of all rented properties are now owned by someone with an address outside of Milwaukee." - John Johnson

"We've found that half of all rented properties are now owned by someone with an address outside of Milwaukee," says Johnson. Landlord addresses outside of Wisconsin have also quadrupled during this  timeframe.

For Gousha, these initial numbers set the platform to explore far more beyond the surface. But he raises two key questions: If owner ocupancy continues to decline, what impact will that have on the city? And, if it does, what does this do for Milwaukee's minority communities?

"What does this do for people of color in Milwaukee who are trying to create wealth? Homes used to be, sort of, a source of wealth over time. Now with these properties in the hands of people who don’t live here, that opportunity to build wealth is not there," says Gousha.

These are questions Gousha admits they don't yet know the answers to. With greater uncertainty surrounding housing markets, the more people will wonder about the long-term health and future of their neighborhoods.

Johnson notes that most homes in Milwaukee are still owned by a city resident, "but this trend also affects them because it means that fewer of their neighbors own those houses. More of their neighbor's houses are owned by people who don't even live in Wisconsin, who may have never even seen that particular home."