Urban Wire How Milwaukee Can Create More Equitable Investment Flows
Brett Theodos
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Among older industrialized cities, Milwaukee has made a concerted effort of planning and investing over the past two decades, especially in and around its downtown area. And Milwaukee has also seen many community development efforts take hold with social equity goals.

But these efforts have not been without headwinds. Out of 515 analyzed cities, Milwaukee ranked 456th in job growth, 437th in population growth, and 418th in new businesses growth from 2010 to 2019. The city has also struggled to address racial equity. A long history of segregation has been reinforced by redlining, in which neighborhoods of color were systematically denied access to capital.

To grow and thrive, cities and neighborhoods depend on a steady flow of investments, such as business loans, home mortgages, and real estate investment. Both private-sector “market” investors and “mission-driven” investors looking to achieve community development outcomes provide this capital.

Urban’s new report analyzes investment flows in Milwaukee, studying what kinds of money have been coming into the city over the past 15 years, for what purposes, and into which neighborhoods. We found that Milwaukee stands out as a city struggling to access capital, with neighborhoods of color and high-poverty neighborhoods in particular missing out on needed investments.

Milwaukee lags behind its peer cities in access to capital and in equitable distribution of investments

Of the 100 largest US cities, Milwaukee ranks 94th in capital access per household, reflecting a serious capital gap for the city relative to its peers. The city ranks especially poorly in single-family home lending, which is the largest capital flow in Milwaukee and most cities. The city also fares poorly in lending for multifamily and nonresidential properties.

A bar chart showing that Milwaukee ranks poorly among the 100 largest cities on measures of lending and federal investment per household

There are bright spots in Milwaukee’s capital access story. The city ranks in the top quartile of mission lending, often delivered through community development financial institutions (CDFIs) and is 13th in federal investment, which indicates the city does well at pulling in subsidy and impact capital. Although the market-driven capital is invested disproportionately in primarily white neighborhoods and low-poverty neighborhoods, the reverse is true for mission and federal sources.

Majority-white census tracts received an average of 2.4 times the aggregate investment of majority-Latino tracts and 2.1 times the investment for majority-Black tracts. But majority-white census tracts received an average of 0.7 times the mission investment of majority-Latino tracts and 0.7 times the investment for majority-Black tracts. And majority-white census tracts received an average of 0.5 times the federal investment of majority-Latino tracts and 0.7 times the investment for majority-Black tracts.

But mission capital and federal subsidy, though critical, do not come close to evening out the disbursement of investment across the city. They are much smaller than the mainstream, market capital flows, and many of the city’s neighborhoods have a scarcity of investment as a result, especially those areas in the city’s North and South Sides.

A map that shows Milwaukee suburbs receive lower average investments per household annually

But mission capital and federal subsidy (and also state and local efforts) can make a notable impact. The Menomonee River Valley—which stretches westward from downtown—has had more than 300 acres of brownfields converted into more than 1 million square feet of buildings, with 52 companies opening since 1999. And there is local momentum around public-private collaboration and innovative solutions. Specific to housing, the Community Development Alliance and City of Milwaukee have developed a collective affordable housing plan over the past year, which will be implemented in 2022.

For leaders in policy, philanthropy, and the private sector, our research surfaces a number of questions. How much does bias unduly devalue investments in high-poverty neighborhoods and neighborhoods with high shares of residents of color? How can leaders better entice investors to stimulate demand? How can the work of mission lending and public sector subsidy be sufficiently scaled to meet the needs of more neighborhoods? How can connections between place, people, and community be achieved when new investment occurs?

Milwaukee struggles in its capital access relative to its peers, with those struggles especially acute in high-poverty neighborhoods and neighborhoods of color. The city needs a larger local economy and a more equitable one—not just growth and not just greater sharing of existing resources. To meet these goals, the private, public, and philanthropic sectors need to support innovation and solutions in this space and change their own practices that reinforce these dynamics.

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The Urban Institute podcast, Evidence in Action, inspires changemakers to lead with evidence and act with equity. Co-hosted by Urban President Sarah Rosen Wartell and Executive Vice President Kimberlyn Leary, every episode features in-depth discussions with experts and leaders on topics ranging from how to advance equity, to designing innovative solutions that achieve community impact, to what it means to practice evidence-based leadership.


Research Areas Neighborhoods, cities, and metros
Tags Community and economic development
Policy Centers Metropolitan Housing and Communities Policy Center
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