Renting vs. Owning: A Profile of Milwaukee Housing Trends

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Milwaukee Housing Trends

Milwaukee is a complex city — it’s one of the oldest cities in the Midwest, but it’s also ranked in the top three “up and coming” cities in the U.S. It’s filled with historic charm and architecture, most evidently in the Historic Third Ward neighborhood, but it’s also home to a thriving downtown and the corporate  headquarters for Fortune 500 companies like Johnson Controls, Harley Davidson, Northwestern Mutual, and Manpower Group.

Milwaukee welcomes a constant inflow of Millennials pursuing higher education at UW-Milwaukee, Marquette, or the Milwaukee Institute of Art and Design, but it’s also one of the most segregated cities in the U.S.

But how do these factors impact the city’s housing market? Is Milwaukee — as one of the largest cities in the Midwest, filled with job opportunities and a transient student population — a renter’s paradise?

As it turns out — yes. Nearly 60% of the city’s residents are renters, and that’s part of an overall shift toward renting over the past five years. In 2011, just 57.2% were renters, which grew to 58.7% in 2012, fell slightly in 2013 and 2014 to 58%, before rising 1.5 percentage points for 2015.

Renting, Owning, and Housing Costs 2011-2015

Although there’s been an overall trend toward renting, homeownership costs saw a significant decrease in the same time frame. Whereas the monthly costs for Milwaukee apartments rose from $774 in 2011 to $802 in 2015, mortgages and associated monthly homeownership costs have fallen from $1,399 in 2011 to $1,257 in 2015 — a decrease of nearly 1%.

Amid rising rents, 57.7% of renters are cost-burdened, meaning they’re paying 30% or more of their income on housing costs, while just 34.4% of homeowners with a mortgage face that burden. Overall, these numbers are just slightly above the national averages of 50.6% of renters and 29.6% of owners.

But when it comes to poverty rates, that gap widens for renters. Nationally, 24.4% of renters are below the poverty line. In Milwaukee, it’s 39.1% — 66.5% of whom are single women. For owners in Milwaukee, 5.8% are below the poverty line, compared with 4.8% nationally.

Some of this — but by no means all — can be explained by the high number of young adults in the city, drawn to Milwaukee’s several universities and colleges.

The races and ages of Milwaukee's renters and owners.

Just over 40% of renters are under age 35, the majority of which would fall well within a student age bracket, and another 34.3% are ages 35 to 54. For owners, those ages skew slightly older, with the largest portion (39.8%) between ages 35 and 54, followed by ages 55 to 74 (37.5%).

The largest racial demographic in the city is black or African American, at 38.5%, followed closely by white (36.1%), and then Hispanic or Latino (18.4%). Strikingly, homeownership rates do not reflect this breakdown: The overwhelming majority (59.3%) of homeowners are white, and just 24.7% of homeowners are black or African American — and that’s on a downward trend. In 2012, 27.1% of homeowners were black or African American.

Milwaukee’s long history of racial divisions is clearly far from over. In 2013, the city edged out Detroit to be the most segregated metropolitan statistical area in the country, with more than 90% of the area’s black population living in the city itself, while the suburbs remain largely white. Not only does this segregation exist in where people are able to live, but also in terms of how they’re able to live. And, as this analysis answers, that means remaining renters.

For press inquiries, contact Sam Radbil.

Methodology

We analyzed data from The U.S. Census Bureau’s 2015 American Community Survey 1-year estimates about occupied housing units in Milwaukee City, the primary city of the Milwaukee-Waukesha-West Allis, WI, Metropolitan Statistical Area. We calculated the percentage of occupied housing units that were renter-occupied during each of the previous five years and tracked median ownership costs and median gross rent over five years using the ACS table of Comparative Housing Characteristics for 2011-2015. Ownership costs include payments for mortgages, debts on the property, insurance, and utilities. (A comprehensive list of payments included in this estimate can be found on the ACS website.) Gross rent includes rent price together with an estimate of average monthly cost of utilities.