Jul 05

Below is the letter the Apartment Association sent to Mayor Barrett, President Johnson, and the Common Council on June 15th, 2020. We have yet to receive a response, but still hopeful that those representing housing providers are included in designing a meaningful solution to these problems

Dear Mayor Barrett

We are pleased that Milwaukee is considering offering financial help for tenants who are struggling to pay rent, and we would like to be a part of the process. We have been working with a coalition that includes Community Advocates, Legal Action, Legal Aid, and Mediate Milwaukee. The AASEW can bring valuable experience and insights to this effort, and we hope you will strongly consider our offer to participate in your deliberations.

While we applaud Governor Evers’ $25 million Wisconsin Rental Assistance Program, it represents approximately $30 of assistance per rental unit in Wisconsin. We believe the size of the rental population in Milwaukee and the financial fallout from the COVID-19 pandemic may necessitate a more robust response.

In our view, sustainable rental housing is critical to the well-being of Milwaukee. Nearly six in ten, 58.2%, of Milwaukeeans live in rental housing.[i] In some neighborhoods, such as 53233, the number of renters exceeds 97%. The success or failure of neighborhoods and rental housing are closely tied. Currently, Milwaukee offers some of the most affordable metropolitan rents in the nation, a significant advantage compared to similar-sized communities in the country.

However, if landlords cannot collect rents and continue to cover the operating expenses for their properties, the impact could be worse than the 2008 housing crisis. “The economic impact of the Great Recession and mortgage foreclosure crisis has had a significant, detrimental, and ongoing effect on City households.” DCD 12/2019.[ii] Foreclosure filings in Milwaukee County were three times higher in 2009 than last year.[iii] From 2008 through 2010,16,000 Milwaukee properties were in some stage of foreclosure by lenders and the City.[iv] In those two years, the tax base lost almost $2 billion in value, with a resulting $16.7 million loss of tax revenue. The resulting demolitions had a large impact on the City’s budget due to the cost of razing along with the impact on the property tax and municipal services collections.[v] The neighborhoods where those properties were located suffered long-term damage. We continue to feel that impact even today, and we certainly hope to avoid a similar outcome in the future.

Rental Housing is the largest small business in Milwaukee, with over $10 billion[vi] invested in the City. Rental properties account for more than $700 million dollars per year of economic impact, starting with $270 million[vi] paid in property taxes.

In 2018, the Census Bureau found the yearly mean operating costs, excluding mortgage payments, per unit for rental properties was $5,270. [vii] Milwaukee’s rental housing contributes $1,198 in wages per unit, $161 Million per year. But more than direct wages are involved. There is also the local multiplier effect because the wages paid to employees of Milwaukee landlords are a major economic factor in the well-being of the City and its residents.

These numbers highlight the critical importance of a healthy and vibrant rental housing market in Milwaukee. We hope you will accept our offer to participate in the upcoming process to deal with the fallout from the COVID-19 pandemic and Eviction Moratorium this year. Thank you for your consideration, and please feel free to use the contact information above for any clarifications or questions you may have.

Sincerely,

Ron Hegwood
President
Apartment Association of Southeastern WI, Inc

[i] https://data.census.gov/cedsci/table?g=0600000US5507953000&layer=VT_2018_040_00_PY_D1&t=Housing%20Units%3AOwner%2FRenter%20%28Householder%29%20Characteristics&tid=ACSDP1Y2018.DP04&vintage=2018&hidePreview=true&cid=B25008_001E

[ii]Section 2: Housing Needs and Demand Housing Affordability Report Department of City Development  |  December 2019

[iii] State’s Foreclosure Rates Have Plummeted » Urban Milwaukee

[iv] www.sewrpc.org/SEWRPCFiles/HousingPlan/Files/foreclosure-in-milw-progress-and-challenges.pdf

[v] Tom Barrett wants to spend $2.4 million on home demolition, rehab

[vi] MPROP assessor records April 2020

[vii]  https://www.census.gov/data-tools/demo/rhfs/#/?s_byGroup1=12&s_tableName=TABLE4

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