Households squeezed by high rents

Families see incomes fall as their housing costs rise

When Cheryl Williams-Adams moved to Milwaukee with her teenage daughter four years ago, she landed on her feet.

She worked as a substance abuse counselor for two organizations, and her monthly income was enough to cover the rent for their one-bedroom apartment, as well as to have some savings.

“I was trying to build up enough money to get a house,” Williams-Adams said.

Like many people, she was one emergency away from financial hardship.

In 2015, Williams-Adams, 63, had a heart attack. She hasn’t been able to work since.

Now, the mix of short-term benefits and Social Security payments she receives add up to about $1,000 per month. Her rent is $590.

In the City of Milwaukee, 50% of all renters spent more than 30% of their monthly income on housing in 2016, compared to 46% of renters nationally, according to new figures from the U.S. Census Bureau.

Nearly a third of renters, including Williams-Adams, pay half or more of their

income to put a roof over their heads.

“If you’re paying more than 30%, that’s cost burdening you because you have then reduced the ability to pay for other necessities, such as transportation, food and medical care,” said Erika Sanders, director of program services for the Metropolitan Milwaukee Fair Housing Council.

One of the reasons for the citywide strain is the two primary factors in a renter’s budget — income and monthly rent amounts — have been moving in opposite directions.

While the median rent level — $809 per month — has been rising with inflation, the median income for renters has fallen from $29,180 to $27,641, according to the census numbers.

“This was a trend that was exacerbated by the recession,” said Andrew Jakabovics, vice president of policy development at the Marylandbased Enterprise Community Partners, a nonprofit that works to create affordable housing around the country.

“It’s not just people on the edge of getting by, but there’s a share there that are considerably more stressed,” he said.

In Milwaukee, an analysis of monthly rent levels shows residents in some of the lowest-income areas of the central city pay rents on par with those in less-impoverished, more stable neighborhoods on the south side and western edges of the city.

For example, in the neighborhoods north of Vliet Street and south of Capitol Drive, rents ranged from $750 to more than $900 per month. Meanwhile, rents in twothirds of the neighborhoods with the lowest poverty levels fell in the same range.

That means residents in the lowest-income, mostly African-American neighborhoods face some of the highest relative rent costs in the city.

Milwaukee is among the most segregated metropolitan areas in the nation, stemming from racially discriminatory housing policies that persisted for decades. It’s been nearly 50 years since Milwaukee passed a fair housing ordinance, but the ramifications of institutional segregation continue today.

When it comes to where people live, they “are heavily constrained by many factors outside of their control,” Sanders said. “Unlawful housing discrimination is one of the most significant types of barriers.”

Illegal housing discrimination continues today and has become “horrifically subtle and difficult to detect,” she said.

Milwaukee is “unbelievably unique” in that the lowest income African-Americans and the highest income African-Americans are just as likely to live in segregated conditions, she said.

The monthly budget crunch

For Williams-Adams, who is African-American, the rent was only part of her monthly budget crunch.

She paid utilities ($37), the phone bills for her and her daughter ($90), food ($200), toiletries and uniforms for her daughter to start the school year. And, of course, little things teenagers ask of their parents.

“She’s 17, what can I say, she always wants something,” Williams-Adams said, laughing.

The financial strain took its toll.

Williams-Adams couldn’t make her June rent payment when her Social Security payment arrived weeks later than anticipated. She paid July to avoid the late fee for that month, but then missed August. With fees, Williams-Adams was $1,215 behind in rent by the start of the month.

The owner of her apartment started the formal eviction process with the courts after she missed June’s rent. Williams-Adams showed up to her court date with a money order for $625, hoping it would be enough to appease her landlord. It wasn’t. She and her daughter have to be out of their apartment by the end of the month.

“I don’t know how I’m going to do it,” she said. “I’m 63 years old, and I don’t have a car right now.”

With an eviction case pending, the search is likely to be difficult.

“If you can’t pass a background check or credit check, the apartments that someone’s going to rent to you are far more limited,” Jakabovics said. “There are a lot of structural factors that weigh against you trying to do more with your limited money.”

Melinda Tyra-Boyd knows the benefits and potential pitfalls of renting. For a time, she rented a single-family home at N. 36th St. and W. Keefe Ave. from a landlord who worked flipping houses.

For two years, things went well.

“I take care of things,” said Tyra-Boyd, 52. “I don’t bother you.”

Then the furnace went out. After the owner repaired it, he increased Tyra-Boyd’s rent from $600 to $800, she said.

Residents in some of the city’s lowest-income neighborhoods face rents at or above the median for the city, making tight household budgets even tighter.

For example, just north of Sherman Park, where 41% of the residents live in poverty, the median monthly rent was $797 in 2015. Residents there spent at least half of their income on rent. In the neighborhoods around Fond du Lac Ave. and N. 16th St., where half of the population lives in poverty, median rents ran more than $800 per month.

Those prices are similar to areas around Humboldt Park in the Bay View neighborhood, where poverty levels are less than 10%.

Tyra-Boyd, who works at Milwaukee Internal Medicine, had options.

“If I can afford to pay you $800 a month,” she said, “I was going to rent from somebody else.”

She did one better. She went through a program with Milwaukee Habitat for Humanity and in June moved into her own house.

Now, she’s in control of her own finances, and she fixes problems in her home right away instead of having to wait for a landlord.

“It gives you a sense of pride, and you can do anything you want to do,” she said of homeownership.

Tyra-Boyd tells her son and daughter, who are in their 30s, to buy a home.

“Don’t wait,” she tells them. “By the time you get to where I am, your house will be paid.”

Tyra-Boyd, who is African-American, is bucking the citywide trend in homeownership in an important way. In Milwaukee, white householders are twice as likely to own as black householders. Across the city, 73% of black householders rent, compared to 47% of white householders.

“Minorities overall have far, far fewer assets than whites, largely because of the homeownership differential,” Jakabovics said.

The benefits of homeownership

ACTS Housing, a nonprofit in Milwaukee, works with diverse families in the city to help them purchase and repair vacant, foreclosed houses.

The average ACTS family in 2016 saved $2,808 annually by transitioning from renting to owning, with a new housing cost of $444 per year, according to Michael Gosman, executive director of ACTS Housing.

With an average family income of $28,975, the savings they achieve through ownership can have a huge impact on their lives, Gosman said.

That’s certainly true for Christine Blake, 56, who worked with ACTS to buy a foreclosed home in the Sherman Park neighborhood three years ago.

After her divorce, Blake, who is white, was paying about $1,200 in monthly rent for an apartment in Wauwatosa, where her son attended school. The rent was more than half of her take-home pay. Today, she pays less than half what her rent cost to own a home.

“Now, I can just breathe and not worry so much,” said Blake, who works at an eye clinic.

The income gives her more wiggle room. She can help support her son, who lives with her and has long-term medical problems stemming from a brain infection.

She enjoys running and can now afford to join a gym in the winter months. She can take her dog, Chip, to get groomed when he needs to, not just when she has a few extra dollars.

Homeownership in the city declined significantly after the recession and foreclosure crisis. In 2005, roughly half of the housing units in the city were owner-occupied. That figure dropped to 41% by 2016.

Over the same period, the number of households in Milwaukee spending at least half their income on rent grew from 31,304 in 2005 to 39,080 in 2016 — a 25% increase. The total number of renter households in the city increased by 13%.

It’s a trend that is expected to continue.

In 2015, Jakabovics conducted an analysis of severely cost-burdened renters with Harvard’s Joint Center for Housing Studies.

They project the number of renters who pay more than half of their income for housing to increase nationally from 11.8 million to 13.1 million by 2025.

“With incomes being where they are, that’s likely to increase significantly the number of cost-burdened renters,” said Jakabovics.