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A labor shortage and outside investors who snap up properties have created a double whammy that’s impeding efforts to boost affordable housing in Milwaukee.
For the past few years and especially since the pandemic, out-of-state investors have been buying up and renting single-family homes and duplexes throughout the city.
Housing experts from Milwaukee service agencies that address affordable housing issues said they are directly competing with families with low to moderate income.
Out-of-state investors now own 7,170 single family homes, condos, duplexes or triplexes across Milwaukee, an increase from 5,250 in late 2018, researchers Mike Gousha and John Johnson wrote in a November 2022 Milwaukee Journal Sentinel article.
Gousha is senior adviser in law and public policy and Johnson is a research fellow at the Lubar Center for Public Policy Research and Civic Education at Marquette University Law School.
Most recently, the Community Development Alliance, which focuses on neighborhood improvement efforts, and Acts Housing, a housing counseling agency, have partnered on a goal to create 5,000 new homeowners of color in Milwaukee by the end of 2025.
Acts Housing is working to address the barriers low-income families face when trying to buy homes. With a new acquisition fund, it’s purchasing Milwaukee homes that will be resold to residents at affordable prices.
But a construction trade labor shortage is hovering over such efforts.
“There is not enough skilled labor in construction or any of the allied trades,” said Kurt Paulsen, a professor of urban planning at the University of Wisconsin-Madison. “Roofing, electric, HVAC; none of those areas have enough contractors to do the job.”
Paulsen said the city’s best bet is rehabbing and improving the quality of existing homes — but even that poses an economic challenge.
“Buying a home that is in disrepair means getting a mortgage big enough to fix it,” he said. “No one is going to write a $120,000 loan for a home that costs $80,000.”
Chris Garrison, the construction and operations director for Milwaukee Habitat for Humanity, said finding contractors can be difficult even for an organization that has been in the business of building for so long.
“We have good relationships with some contractors, and they are willing to work with us, but they seem to be getting busier and busier,” he said. “It can also be a struggle to have all the equipment they need to build a home on a small city lot.”
Additionally, Garrison said, some contractors don’t want to be in the areas where Habitat for Humanity builds, which includes the Midtown and Harambee neighborhoods.
“Sometimes, because of things like crime, contractors don’t want to work somewhere,” he said. “Or if they are working there and get things stolen or damaged, they don’t want to come back.”
Garrison said Habitat is proud that it built 20 homes last year but is constantly concerned about whether what it does is enough to move the needle.
“We do what we can like everyone else,” he said. “But I think it is safe to say a lot of businesses in the industry are shorthanded and could use more help.”
Paulsen sees the city’s housing challenges as an opportunity for community development.
“Funding the nonprofits already doing the work paired with on-the-job training and other resources can help create the capacity and infrastructure to do this work on the scale it needs to be done,” he said.
For Teig Whaley-Smith, the chief alliance executive for the Community Development Alliance, these concerns are top of mind as the organization helps lead the charge to create homes.
“We try to consider how we can build smarter, faster, greener and better,” he said. “And because we are Wisconsin, we only have about eight months (of good weather) to build, so we think about how we can build inside and then move parts outside.”
Some work is unfolding to address the labor shortage in construction, he said, specifically by the Ezekiel Community Development Corporation, a construction company that trains workers.
Despite the challenges, everyone agrees that more can be done.
“We know what works,” Paulsen said. “It’s a huge price to pay, but there will be a greater cost to society if we don’t.”