Milwaukee's Housing Crisis: Housing Affordability and Mortgage Lending Practices

Abstract

This report examines the recently released 2006 Home Mortgage Disclosure Act data and new 2006 American Community Survey (ACS) census data as part of a series of research papers supported by Legal Action of Wisconsin to assess the impact of the national housing crisis on low-income homeowners and renters in Milwaukee County. The ACS data suggest that the impacts of the unregulated housing loans and resultant housing price increases and property tax assessment (and tax bill) increases, coupled with utility rate hikes and relatively flat incomes have dramatically altered the affordability of housing in urban areas, particularly for Midwest cities long known for their reasonably priced housing and consequent lower cost-of-living. Homeownership increased throughout Milwaukee County from 2000 to 2006 due to increased lending activity. However, increases were seen in housing costs for homeowners with mortgages as well as for renters, as taxes, utility costs, and mortgage values escalated. Disparities in lending by race and neighborhood were in evidence. Homeowners in the poorest areas were the mostly likely to have high cost mortgages (subprime and/or high interest rate loans). African Americans were much more likely to get high-cost loans than whites, and two times more likely to get refinancing loans.