While numerous factors are responsible for the unrest in Milwaukee, it’s clear that racial and income bias in home lending is helping fuel the tensions, according to a by the National Community Reinvestment Coalition (NCRC). The report found there are significant racial and income disparities in mortgage lending in Milwaukee, St. Louis, and Minneapolis.
"[The] report clearly shows the lack of mortgage lending in low- and moderate-income neighborhoods and predominantly minority neighborhoods," noted NCRC's president and CEO, John Taylor. "Without access to responsible mortgage credit and the opportunity to become a homeowner, the ability for working people to build wealth is severely curtailed.”
In the Milwaukee metropolitan area, many black residents are effectively stranded in neighborhoods beset by poor schools, poverty, and crime. This creates an atmosphere of distrust and resentment directed at law enforcement and the entire system.
In Milwaukee and St. Louis, the racial composition of a neighborhood is a strong predictor of mortgage activity. The NCRC study shows that lending is greater in neighborhoods with larger white than black populations. In the Milwaukee Metropolitan Statistical Area, whites represent 70% of the population and received the majority (81%) of the loans. African Americans represent 16% of the population, yet received only 4% of the loans.
Segregation brings down property values and exacerbates crime and violence, the report stated. "Lenders and policymakers must take action to ensure that every credit-worthy borrower has equal access to fairly priced credit. Without that access, predators and scammers fill the gap, targeting their fraudulent and discriminatory lending practices on credit-worthy borrowers,” noted Bethany Sanchez, director of fair lending at the Metropolitan Milwaukee Fair Housing Council.
The extensive civil unrest and rioting that followed Saturday’s fatal shooting by police of Sylville Smith has cast attention once again on the Milwaukee metropolitan area — one of the most segregated cities in the United States.