Mayor Tom Barrett's multipronged effort to address the city's foreclosure crisis also confronts an unfortunate reality.The reason for the sharp increase in foreclosures and abandoned houses, as one could have guessed, austerity:
"The one thing to remember...is that we are three years behind the housing meltdown," said Aaron Szopinski, a former city budget analyst whom Barrett promoted to take over as the city's housing director. Normally, it can take several years between the time a homeowner stops paying taxes and the time when the city takes over the property.
"So what we took in last year (in tax foreclosures) is essentially what went delinquent in January 2011," he said. "We probably have a couple more years of this. We anticipated that when we put our plan together."
Barrett put $11.7 million in the city's 2014 budget for his Strong Neighborhoods Plan. The stated goal is to sell 350 homes in the city's inventory and demolish as many as 300 blighted or unsafe homes.
As of now, the city owns approximately 1,200 homes taken through tax foreclosure, most of them on the north side. At the same time, there are approximately 1,400 properties in bank-owned foreclosures.
The city treasurer's office estimates city lawyers will file foreclosure actions on as many as 1,100 more properties by the end of the year. Not all of those homes will end up in city hands; homeowners sometimes find a way to pay outstanding tax bills so they can keep their homes.
That so-called redemption rate — homeowners who avoid tax foreclosure by making good on their tax bills — has dropped in recent years, according to City Treasurer Spencer Coggs and Deputy City Treasurer Jim Klajbor.
In 2002, the redemption rate on homes headed for tax foreclosure peaked at 76%. In 2013, only 32% of the properties headed to foreclosure avoided it.
While the percentage of homeowners avoiding foreclosure has dropped, the percentage of homes taken over by the city has increased. Last year, almost 68% of the properties headed for tax foreclosure ended up in city hands.
But the reason homeowners end up missing or not paying their tax bills hasn't changed much since the housing crisis of 2008.In other words, Scott Walker's agenda is still working! Through Act 10 and tax hikes on the poor, in order to pay off his campaign contributors and cronies, Walker has taken billions of dollars out of the economy.
"It is the economy," Klajbor said. "If people don't have the income, they can't pay the bills. Some people have not seen a raise, even if they are employed. That's still affecting things. And even if you are employed, you could be underemployed. Many people have had their hours reduced."
And lest we forget, Walker has taken $26 million in federal money meant to help with the foreclosure crisis to fill holes in his budget created by his corrupt corporate welfare schemes. Walker then commandeered another $3.5 million that was meant to help raze the dilapidated homes.
Things are even worse in Milwaukee with Chris Abele doubling down on the austerity agenda by taking even more money from county workers and cutting more aid than even Walker.
But don't worry, the plutocrats are doing just fine. They're building a 44-story Bic lighter on the lakefront, moving freeway ramps to make it easier for the 1% and are working hard on finding a way for the people to pay for a new arena even though they can't afford to keep their own homes.
The real kicker is when I point out these misplaced priorities, I get told I'm rooting for the city to fail. If supporting people is failure, I hope we do fail in epic fashion.