Foreclosed properties are typically sold to buyers. In some places such as Milwaukee, however, they can be rented out and eventually sold to the tenant in the long term. Karen Slattery of the Milwaukee Neighborhood News Service.
The Marcheses are among the first families to move into the Layton Boulevard West neighborhood’s affordable Rent to Own Homes. Image source: urbanmilwaukee.com
Most tenants would rather not hear from their landlords. But Kelly Marchese is not one of those renters. She says she emails or is on the phone with her landlord regularly, to talk about things such as the chain-link fence that will be installed in her backyard this summer.
Marchese rents a house on the city’s South Side that was formerly in foreclosure and vacant, through the Rent to Own Homes program. The program was made possible by a partnership between Layton Boulevard West Neighbors, Inc. (LBWN) and Impact Seven, Inc., a private, nonprofit Community Development Financial Institution (CDFI) that serves as Marchese’s landlord.
The home is one of 24 foreclosed properties that these co-developers have purchased and are rehabbing to give people such as Marchese access to affordable housing in the city.
Applicants interested in renting the homes, with the idea of eventually owning them, are screened. The monthly rent is based on income.
Tenants who live in the homes for 15 years will be given about $37,000 in credit toward the purchase price, according to LBWN Executive Director Charlotte John-Gomez.
Marchese said that once she was approved to move into the home at 2030 S. 37th St. last summer, she had a hand in making decisions about the renovations. She said she chose the yellow color of the siding, for instance. “They want you to be happy with the house,” she said.
Kelly Marchese is settled in at one of the Rent to Own Homes made available through a partnership between Layton Boulevard West Neighbors and Impact Seven, Inc. Image source: urbanmilwaukee.com
The Rent to Own Homes development helps bring stability to the Layton Boulevard West area, according to John-Gomez, and helps stave off some of the havoc wreaked by the foreclosure crisis.
LBWN, a nonprofit organization created two decades ago by the School Sisters of St. Francis, is charged with stabilizing and revitalizing the Silver City, Burnham Park and Layton Boulevard neighborhoods.
The agency has operated the Turnkey Renovation Program for several years, in which it buys, renovates and sells foreclosed homes in the neighborhood at affordable prices, one at a time. John-Gomez said the Rent to Own Homes program resulted from taking the Turnkey project “to scale a little bit more.”
She said that LBWN receives a list of foreclosures twice a year, adding that she “doesn’t see the trend waning at any point.”
LBWN’s co-developer, Impact Seven, Inc., was founded in northwestern Wisconsin in 1970 to aid development in low- and middle-income communities.
Todd Hutchison, who oversees the real estate development branch of Impact Seven, Inc., said that his organization and LBWN pored over lists of foreclosed homes in the area that were owned by the city of Milwaukee or by banks to find places to buy. Not all of the properties they looked at were salvageable, according to Hutchison.
Those they purchased got new roofs, windows, furnaces and wiring. New plumbing was included where needed. “We are breathing another 100 years of life into these homes,” said John-Gomez.
Foreclosures occur because people are no longer able to pay their mortgages, the upkeep or the property taxes. Abandoned buildings create problems for the neighborhoods because they fall into disrepair over time, attract vandals and drug dealers, and become a danger to children, according to Hutchison.
As the foreclosed building loses its value, so do the buildings around it, he said.
Vacant houses are not the only problem for neighborhoods such as Layton Boulevard West. So are vacant storefronts. For that reason, two foreclosed commercial buildings, located at 3513 and 3519 W. National Ave. were included in the project, in an effort “reactivate those storefronts,” according to John-Gomez.
John-Gomez said that tenants have leased 11 of the homes to date. Negotiations are in progress with others, including tenants that will move into the storefront buildings.
The nearly $6 million project was made possible with loans and tax credits from organizations including the Wisconsin Housing and Economic Development Authority (WHEDA), Town Bank, the Federal Home Loan Bank of Chicago, the National Equity Fund, the Local Initiatives Support Corporation (LISC) and the city of Milwaukee.
The project is one of the finalists for this year’s Milwaukee Awards for Neighborhood Development Initiatives (MANDI), in the State Farm Building Blocks Award category, which recognizes a real estate project that improves the community.
John-Gomez described the news as “great.” Hutchinson added that he is pleased to “celebrate that we have had a little bit of an impact, even though there is a long way to go.”
According to John-Gomez, the tenants seem to like the idea of being part of a program nominated for an award.
Marchese said she is very happy in her new home and will begin painting her inside walls this spring. She said that she plans to choose earth tones and is anxious to get started.
The landlord will send a representative to her home for an inspection once a year.
Said Marchese, “I want him to say ‘wow.’”
Visit ushud.com for more on foreclosed properties and foreclosure listings.