Excerpt from the book by Andre F. Shashaty
In America’s Rust Belt, many communities were hit hard by the foreclosure crises, compounding a long struggle with economic woes. On Milwaukee’s north side, a local real estate developer used the housing tax credit to help address the scars left by foreclosures there.
Gorman & Co., Inc., took a bite out of two prevailing problems in its Milwaukee neighborhood—foreclosures and unemployment. Focusing within a two-mile area, Gorman purchased vacant lots from the city to build 40 single-family homes for rent to lower-income families. This infill development helped restore the vitality and stability of the area.
But the firm did not stop there. It also substantially rehabilitated a series of duplexes that were in dilapidated condition to provide another 40 affordable units and preserve the neighborhood’s character.
“It has stabilized the neighborhood,” said Ted Matkom, Wisconsin market president for the firm. “It has eliminated blight. When you drive down the street it looks like a new subdivision.”
Known as the Northside Housing Initiative, the project also helped address unemployment, which stood at 50 percent for African-Americans. Gorman partnered with the Northcott Neighborhood House to train youths and adults with troubled backgrounds to work in construction. More than 50 full-time jobs were created for graduates of the program during construction, giving them valuable experience on top of their training.
Resident of the single-family homes will have an opportunity to buy their houses at the end of the federally mandated 15 –year rental period.
The new homes are part of a forward-looking decision by the city at the height of the foreclosure crises. City leaders recognized that homes could be acquired inexpensively, giving the city the ability to take control of not just individual homes but entire blocks and neighborhoods. This control would be essential to helping stabilize areas with high rates of foreclosure.
The $16.4 million Northside Housing Initiative is made up of two low-income housing tax credit projects that target families earning no more than 50 percent to 60 percent of the area median income.
It is a prime example of how private developers and corporations looking to reduce their tax liability are working with cities to address local housing and community revitalization goals.