MILWAUKEE — It's a trend that housing experts call disturbing. Out-of-state investors buying up Milwaukee homes and turning them into rental properties, making it hard for people to purchase their own homes in the city.
"Right now there are about 1,500 homes that come up in that affordable space. That $125,000 space. 40% of those right now are being purchased or snatched up by investors," said Dorothy York, the vice president of real estate for ACTS Housing.
Marquette University Law School research fellow John Johnson says so far this year, 400 houses have been purchased by three out-of-state based investors. They're on track to double the number of Milwaukee homes they purchased last year.
"Since 2018, we've seen these three companies just really radically expand their holdings in the Milwaukee area," said Johnson. "High rent and low property values make Milwaukee a very profitable place to be a landlord."
That's why Milwaukee-based housing aid organization, ACTS Housing, decided to launch an acquisition fund. The goal is to purchase lower-priced homes and resell them in an attempt to ease the burden for families competing with out-of-state investors.
"We have about 17,000 families who can purchase within that price range who are really looking for a home but they just can't find it," said York.
The non-profit says it's looking to raise $11 million in order to buy and resell 100 homes between the range of $90,000-$140,000 to families in 2023, with monthly housing costs ranging from just $900 to $1,200. The group says families would actually be saving money.
"Your monthly housing expenses as a homeowner for a $100,000 house are probably going to be quite a bit less than your monthly rent and that's including property taxes and insurance and maintenance," said Johnson.
By launching the new initiative the organization says they hope it will also help to bridge the racial disparities gap in homeownership in the city.
"If we are able to increase the number of homeowners we could we are able to really make a dent in how many people of color are homeowners in the city of Milwaukee," said York.