Home ownership has become one of the most consistent ways for people and families to build wealth.
But in Milwaukee the inability of would-be homebuyers to find an affordable home to buy is one of the reasons for the city's persistent racial wealth gap.
Northwestern Mutual is trying to help address this issue by investing $3 million through its foundation and its Sustained Action for Racial Equity initiative in a pair of city housing agencies.
“We think homeownership can really provide that basis for economic stability for individuals and families going forward,” said Grady Crosby, vice president and chief sustainability and impact officer at Northwestern Mutual. “Not to mention the intrinsic value around the pride of homeownership, some skin in the game, a stake in the neighborhood. But also building transferable generational wealth.”
Milwaukee Community Land Trust will receive $2.5 million.
"Milwaukee is unique compared to other cities with a stark racial inequity in homeownership,” Lamont Davis, executive director for the Milwaukee Community Land Trust, said in a statement. “At MCLT, we are focused on a long-term-strategy investment. Together with our partners, like Northwestern Mutual, we’ve already been able to invest in 10 affordable homes throughout the city and are working to add more than 30 more by 2025.”
Crosby said MCLT plans to use the funds to buy up to 20 houses or land to build houses that it would sell at below market value to new homeowners. If they decide to sell the property, they would have to sell it below market value to ensure its affordability.
“It helps to act as a springboard for Black and brown communities. Not only generating wealth, but being able to generate generational wealth,” Crosby said. “Which ends up being transferable at some point in the future.”
Challenges to homeownership
According to the Wisconsin Policy Forum,the Black homeownership rate in Milwaukee was 25.2% in 2022, the lowest among peer cities.
Acts Housing Homeownership Acquisition Fund, which provides counseling and guidance to low-income homebuyers, is receiving $500,000 from Northwestern Mutual. The organization also acts as a real-estate brokerage in the purchase of homes for owner occupancy in Milwaukee and Beloit, according to its website.
Acts Housing is working to buy 100 properties per year and convert them into affordable owner-occupied homes.
“In Milwaukee, families of low-to-moderate income are increasingly rent burdened and forced to make decisions that limit their ability for upward mobility,” Dorothy York, vice president of real estate at Acts Housing, said in a statement.