Wisconsin is one of the most segregated states in our country. From infant mortality, to high school achievement, to home ownership Wisconsin is a leader in racial disparity. I’m not proud of that. A unified Wisconsin is far stronger than a divided one. To progress and grow as a state our communities need to be unified. Milwaukee is the most segregated city in America but this is an issue that effects every city and town in Wisconsin.
One of the biggest contributors to segregation is home ownership. When we look at project neighborhoods we find mostly rental properties. Most of the owners of those rental properties do not live in the community. I believe that giving ownership of the community to the citizens of the community will in turn create an environment where the community wants to, and begins to, rebuild itself in the image that community desires… that’s a lot of communities but that’s what this is all about… unfortunately a lot of people within these communities do not have the means to take ownership of it. Whatever the reason is, it all comes back to the ability to get a mortgage. One way around that issue is a land contract. It gives people the ability, over time, to accumulate the necessary funds for a down payment (typically 20% for those with “rebuilding” credit) through using your rent payments to go towards a down payment over a set number of years.
My proposal is a special tax classification to encourage investments in these communities for the purpose of purchasing buildings with the intention of turning them into a land contract for the tenant, and in doing so would be completely property tax free for the duration of the land contract. Any repairs done on the house under this special tax classification would allow the cost of building materials to be sales tax exempt. This would encourage investors to fix up the property, or they can work with the tenant to let the tenant do the repairs with the ability to get the materials at that same sales tax exempt rate. They would have the ability to write off the cost of the materials (tenant or investor) in their personal or business taxes. The investor would only qualify for this special tax classification if they have a written land contract with the tenant. The contract would be a monthly payment for a max of 1% of the fair market value of the property, upon tenant move in date, for no less than 2 years and no more than 5 years until a 20% down payment is reached, at which time the tenant would obtain a traditional mortgage (If credit score does not meet prime lender standards they can use a sub prime lender and endure higher interest rates until they can improve credit and refinance) and assumes ownership of the property. At this point the property tax would be reinstated. I see this as a way for communities to rebuild themselves in their image rather than the gentrification of an image the residents of the community may or may not appreciate. Give the power to the people.
This would be applied to homes or small commercial building of 2 stories or less. Apartment complexes and large commercial properties would not be applicable.
The solution for our housing segregation issue can be resolved and it starts with allowing the communities across our state to take ownership in their communities and we as a state need to allow every opportunity for them to do just that.