Only around 15% of Black households in Madison own their home, compared to over 50% of white households. That’s according to a report released last Friday by the nonpartisan Wisconsin Policy Forum.
The report, which draws 2019 census data, outlines how the disparities in homeownership between white, Black, and Hispanic households in Wisconsin have steadily grown over the past decade.
Joe Peterangelo is a senior researcher with the Wisconsin Policy Forum, and wrote this report. He says that the racial divide is even larger than he was anticipating.
“What we found is, there are large gaps in homeownership in all of the 5 largest cities in the state, and we also looked at the statewide numbers and found big gaps everywhere. We actually had done previous research on Milwaukee that had found big racial gaps in homeownership in Milwaukee and that led us to look across the state. What we found is all of the other cities have even bigger racial gaps than Milwaukee does, and the statewide numbers also look worse than Milwaukee’s do,” Peterangelo says.
While homeownership across the board has dropped in the state due to rising housing costs, a disproportionate amount of Black households no longer own their home compared to white households. Across Wisconsin, Black homeownership dropped by over 7% since 2010, while white homeownership only dropped by around one percent in that same time frame.
The report cites the growing income gap between Black and white households as a contributing cause of this disparity. In 2019, the median income for a white household in Wisconsin was just under $65,000 a year. But for Black households, the median income in Wisconsin sat at just above $31,000 a year.
Over the last decade, the median income of white households in Wisconsin increased by 20%, while the median income for Black households only rose 13%.
Peterangelo says the large racial gaps in homeownership is a uniquely Wisconsin problem.
“Some of the factors that contribute to the homeownership gap are factors that are national issues and historical issues of discrimination, things like redlining that prevented people from getting homes in certain areas or getting mortgages in certain areas, so some of that continues to have an effect. But then, like I said, we also have these big income gaps, especially here in Wisconsin,” Peterangelo says.
One issue with this data, however, is that it may already be out of date, using figures from before the COVID-19 pandemic. Because home prices rose during the pandemic, the already existing racial divide in homeownership may have grown even moreover the past two years, says the report.
The issue is even greater here in Madison. Madison is the least diverse of the state’s five largest cities, with around 69% of the population registering as white in the 2020 census. Black folks make up only seven percent of the city’s population.
Madison also has the most expensive housing market of Wisconsin’s five largest cities. In 2019, the median home value in Madison was over $246,000, that’s almost $100,000 more than the next most expensive city of Kenosha.
Dr Ruben Anthony is the President of the Urban League of Greater Madison. He says that this issue is not going away any time soon.
“I don’t see the challenge of the disparities changing fast here in Madison and Dane County, largely because of the scarcity of homes and because of the scarcity of space. Madison has a 2% vacancy rate, so landlords have their choice of who they can rent to. And certainly a lot of African-American families can’t get into a bidding war with companies that are coming in and buying up properties in places like South Park Street. They just can’t afford it, so affordability is a big barrier,” Anthony says.
Dr. Anthony says that, although he sees many issues with Madison housing, both the Urban League of Greater Madison and the city are taking steps to increase home ownership for Black families.
“We had housing programs with the Urban League early on, the 15 year lease-to-own program. Through that program we’ve been able to train people about homeownership, and to give them after 15 years a home. We did that with 57 families. After that, over the last year and a half or so, we started a program called Housing 2.0. Under Housing 2.0, we’ve got a $5 million tax credit to make people homeowners right away,” Anthony says.
In 2020, the organization launched a $5 million initiative to help Black Madisonians buy their own homes.
Last year, Madison Mayor Satya Rhodes-Conway released the Housing Forward plan. The plan says that, by 2040, the city of Madison could see 70,000 new residents, and the supply of housing has not kept up with the growing population.
The plan aims to make it easier for private developers to construct new affordable housing in the city, while also setting aside money for the city to purchase lots to build their own affordable housing.
While the Housing Forward plan does not specifically target Black homeowners in Madison, it does acknowledge the large racial disparities that exist throughout the city.
Action is also being taken at the state level. Earlier today, Governor Tony Evers announced the Help for Homeowners Program.
The program, with the help from the Wisconsin Community Action Program Association, or WISCAP, aims to use $92 million in funds from the federal American Rescue Plan Act to help homeowners struggling to pay their mortgage. The state, with the help of WISCAP, will help homeowners pay mortgage payments and property taxes for those who sit at or below 100% of the area’s median income. Here in Madison, that’s around $72,000 a year for a single person family.
Brad Paul, the Executive Director of WISCAP, says that, although the program does not specifically target Black homeowners, it could help existing Black homeowners stay in their homes.
Peterangelo, the author of the report, says he anticipates another report on how the pandemic has affected this divide next year.
A 2020 report from the National Association of Realtors found that Wisconsin is third from the bottom in its rate of Black homeownership as compared to white counterparts.
Photo courtesy: The Wisconsin Policy Forum
