Milwaukee officials say some homeowners are facing a new form of redlining - the practice by insurance companies of charging more to people in low-income areas, or denying coverage.
Ald. Bob Bauman says the city’s been getting calls lately from desperate homeowners.
“They tell us their insurance has been canceled or they’re being threatened with cancelation because some insurance company has determined that their roof is in some way deficient,” Bauman says.
Bauman says he doesn’t know many details right now, such as what insurance companies are involved or what they’re demanding of homeowners.
“You know, as I start to think more of this, as someone who owns an older home, I’m thinking to myself, well, roofs? I’ve never thought of roofs of being a major risk of fire damage. It’s usually my 1892 electrical system that would be a greater concern than my roof,” Bauman says.
Bauman says many homeowners in the central city can’t afford pricey roof replacements. He calls redlining a racist practice.
“They view people of color and low-income areas as a higher risk and less potential for generating profit,” Bauman says.
The alderman says the city has alerted the Milwaukee Fair Housing Council to the suspected redlining. President William Tisdale says the agency will investigate whether any insurance companies are acting illegally.
“It’d have to be shown that underwriting standards were being disproportionately applied to neighborhoods of color that were not being applied to white neighborhoods,” Tisdale says.
In the meantime, Milwaukee leaders are telling affected homeowners that they can apply for loans to help make roof repairs. The city has budgeted $1 million for its STRONG Homes Loan Program. It will begin Jan. 2 and provide loans up to $20,000 to pay for rehabilitation and repairs, and to correct code violations. Interest rates will range from zero to 3 percent.
