By Sean Ryan, The Business Journal, January 15, 2014
Gorman & Co. Inc. wants to buy 120 tax-foreclosed homes from the city of Milwaukee and rehab them as affordable housing for new renters, and eventually owners, for $22.5 million.
The projects center on three Milwaukee neighborhoods where city-owned foreclosed houses are concentrated, including areas around the former Tower Automotive plant, said Ted Matkom, Wisconsin market president for Gorman, based in Oregon, Wis.
The developer since 2008 has fixed and leased 200 houses in Milwaukee under this initiative, Matkom said.
The project funding requires state affordable housing tax credits that Gorman will apply for later this month. Gorman will file three applications, Matkom said, one each for houses in the Franklin Heights, Sherman Park and Tower Automotive neighborhoods.
Under the proposal, Gorman would buy foreclosed houses from Milwaukee for between $1 and $5,000, depending on the condition of the building, Matkom said. Gorman would fix them up and rent them to low-income residents for 15 years. After 15 years pass, the current occupant can buy the building for $30,000, paying off the remaining debt on the rehab projects, he said.
“A lot of multi-family buildings kind of get tired as they approach the 15th year,” Matkom said. “This product actually gets more attractive as the 15th year approaches.”
Milwaukee’s Zoning, Neighborhoods and Development Committee on Tuesday unanimously endorsed selling the houses to Gorman.