Paved by Urban League of Greater Madison’s $5 Million Initiative
The Urban League of Greater Madison is getting in the affordable housing program once again. The local civil rights organization will spend $5 million to buy between 15 and 17 houses in economically distressed census tracts, renovate them, and sell them to low- and moderate-income families with no down payment required. Dr. Ruben L. Anthony Jr., the president and CEO of the Urban League of Greater Madison (ULGM), announced its latest initiative during a press conference held outside his offices on South Park Street on Aug. 7.
Anthony said the new interest-only program that includes a saving and wealth building component, is designed to boost Black homeownership on the South Side and in other low-income neighborhoods, before the people who live there get priced out.
“Owning a home and having the benefit of homeownership is critical to fully experiencing and living the American Dream. That’s what we all want,” Anthony emphasized. “There’s nothing like being your own landlord and having a place that you and your family can call home.
The microphones and podium were barely put away from the midday announcement when a woman showed up in the lobby of the ULGM requesting a housing application. The next day, a mountain of calls were fielded by receptionist Jacinta Sanders, the moment the League’s office opened.
“The calls were constant,” Sanders said. “The callers were excited and desperate for more information.”
“We want to make sure that as gentrification happens in places like South Madison that we keep houses affordable . . . that’s what this whole program is about — making sure we that we have affordable housing for people in this community,” Anthony said.
In addition to waiving the requirement for a down payment, the ULGM will make available to the first-time home buyers a seven-year, no-interest loan and provide financial counseling. The loan must be re-financed after seven years. But the homeowner will be allowed to keep the equity he or she has built up over that period.
“You can’t get that anywhere else,” Anthony said.
Home equity is the percentage of the total value of the house and the land it sits on that the buyer owns by having made payments to the lender. It’s a major source of wealth, one that too few Black families in Madison have access to.
“The benefit of homeownership can be a tremendous financial leveraging tool,” he said. It can take one’s life to a new level. … The equity that comes in these homes will be there and allow these homeowners to repair homes, pay for their kid’s tuition, have seed money to launch businesses, serve as a retirement source of funding, or used as a family legacy.”
Twelve homes have already been purchased by the ULGM and of those, eight are located on the city’s South Side.
South Madison Alder Sheri Carter said this program demonstrates a step forward toward achieving racial equality in homeownership. Her parents faced ugly racism in Madison when they moved to the city in the early 1950s and were turned away because of the color of their skin.
“It’s important that we are able to buy where we want to buy and not where we’re told to buy,” Carter said. “There are so many barriers prohibiting members of the Black community for purchasing the American Dream, homeownership.”
While 48% of African Americans nationwide are homeowners, Anthony said, the number is only 23% in Wisconsin — third lowest in the nation. And in Dane County the number is only 10%.
The dismal numbers for Black homeownership cited by Anthony are not a historical accident. Rather, they are in large part the result of deliberate actions taken by mortgage lenders — aided and abetted by federal officials — that in effect blocked Black families from obtaining mortgages. As a result of those actions, many Black families were locked out of the post-World War II economic boom that saw white families build significant wealth by buying houses in the suburbs and passing the houses down to their children.
Mayor Satya Rhodes-Conway acknowledged this history in her remarks at the press conference.
“We cannot forget the shameful history of redlining,” Rhodes-Conway said, referring to the practice, begun in the 1930s, of mortgage lenders drawing red lines around minority neighborhoods on city maps to discourage lenders from doing business with prospective homebuyers living there.
“Politicians spent the next century blaming the victims of this policy rather than correcting structural racism at its roots,” Rhodes-Conway said.
Redlining has been illegal since the 1970s. But, said Rhodes-Conway, the barriers to Black homeownership remain unacceptably high. The 10% number for Black homeownership in Dane County was only one-fifth the rate of white homeownership. And between 2007 and 2016, households of color applying for mortgages in Madison were turned down three times as often as white households.
“That can’t continue,” Rhodes-Conway said.
The City of Madison contributed $200,000 toward the new program. The Wisconsin Housing Economic and Development Authority, a public body created by state law, contributed nearly $3,500,000. Joaquin Altoro, the authority’s chief executive, also spoke at the press conference.
“The Urban League’s focus on bridging the homeownership gap among people of color is critically important today,” said Altoro. “Racial gaps in homeownership and personal savings represent systematic challenges in our communities. Homeownership is linked with higher academic achievement, better health and safety neighborhoods.”
Wells Fargo contributed $1,500,000 to the program. Additional partners include the National Community Investment Fund, a Chicago non-profit, and Johnson Bank, which is headquartered in Racine.
Operation Fresh Start will serve as the general contractor for the renovation projects. Local construction companies Aldo Partners LLC and Restoration Brothers will also perform renovation work. All three companies will work with the Urban League on a training program designed to teach unemployed people construction skills.
The new homeownership program is the second such program undertaken by the ULGM during Anthony’s tenure as CEO. The first, a rent-to-own program, involved purchasing 54 houses and has to date created $2.5 million in equity for Black homeowners. In 2017, the rent-to-own program was recognized with a Mutual of American Commercial Partnerships award.
Only four homes remain and are expected to be sold in 2021, according to Vickie Wright, the Urban League’s Homeownership Program Coordinator.
Anthony said that the hot housing market in Madison made it imperative that the ULGM offered a second homeownership program.
“With everything that’s going on, with how this market is in Madison, we have to do this one more time. We have to make sure we step in to make sure that homeownership is available to all in Madison.”