Milwaukee Biz Blog

At the start of 2011, I returned to the great state of Wisconsin because of its people, their collective expertise, strong work ethic and ability to meet challenges head-on. For me, WHEDA was the place to be. WHEDA has worked for nearly 40 years to finance housing for lower income Wisconsin citizens and help them achieve fulfilled dreams.

Like the housing industry and Wisconsin’s economy, WHEDA was at a crossroads in 2011. Home ownership becomes meaningless and virtually unattainable without a good-paying job. So I enthusiastically accepted Governor Walker’s call to help in his goal of creating 250,000 private sector jobs by 2015.

The first step we must take is to reduce joblessness and increase household wealth across Wisconsin. How do we plan to do it? At WHEDA, we expanded the “ED” in our mission by leveraging our economic development programs with our housing finance knowledge. The beauty is that WHEDA maintained its long-standing housing commitment and strengthened its economic development mission to support Governor Walker’s goal. In addition, WHEDA works closely with our sister agency, the new Wisconsin Economic Development Corporation to further a team approach to business expansion and job creations.

We developed a bold strategic plan to deploy all of our products to create or retain 12,500 Wisconsin jobs. Important components of the plan include expanding economic development, strengthening multifamily housing resources and capabilities, reestablishing home ownership lending programs and strengthening Authority finances and operations.

In August 2011, the WHEDA Board approved the 2012 Dividends for Wisconsin plan that provides a stronger focus on allocating general reserves to job creation and economic development. The plan evolved following a series of public hearings around the state where the message was loud and clear: utilize our reserves to stimulate economic growth and financially support WHEDA’s current housing programs.

As a result, WHEDA will devote $12 million from Dividends to job creation and economic development.
The second priority of the plan is affordable single family and multifamily housing. In all, over $14 million in general reserves will be available for all housing and economic development purposes. The third priority is housing for persons in crisis. WHEDA will provide $500,000 to local organizations serving our most vulnerable citizens. We believe that’s our housing investments are a significant contribution to aiding Wisconsin’s economic and community recovery.
Economic development, the ED in WHEDA has always been a key component of our mission, and 2011 was no exception.

Back in April, Governor Walker and I made stops in Oshkosh and Milwaukee where the Governor awarded $17.1 million in Affordable Housing Tax Credits to fund affordable housing project developments all across the state of Wisconsin. Those credits that WHEDA distributes will create approximately 1,200 construction jobs, will move forward 29 developments that will create 1,400 units of affordable rental housing. This year’s Affordable Housing Tax Credits will generate an estimated $250 million in economic activity for Wisconsin.

Our application to the US Department of the Treasury for a State Small Business Credit Initiative (SSBCI) allocation totaling $22.4 million was accepted. WHEDA expects to leverage the funds 10:1 for a total of $224 million. The funding is expected to create or retain 11,625 jobs. That is phenomenal news for our entire state.

When you look at all of WHEDA’s economic development tools including New Markets Tax Credits, small business programs, the Neighborhood Revitalization Guarantee program, the Contractor’s Loan Guarantee program, all of our agricultural programs and add it all up, WHEDA’s historic commitment to economic development in Wisconsin is significant. To date, since WHEDA’s inception, WHEDA has provided $828.7 million in economic development lending.
Despite our historic success, this isn’t the WHEDA of 10, 20 or 40 years ago. The affordable housing tools to which we were accustomed have been affected significantly by the “Great Recession”, the housing market crisis, regulatory reforms and the market’s continued aversion to credit risk.

To be clear: The affordable housing loan market was not the cause of the housing market crisis. WHEDA’s portfolio of loans is experiencing a default rate of about 3.2 percent, well below the Wisconsin average for prime conventional mortgages. Even so, because investors and guarantors have tightened qualifying criteria, we cannot offer the same loan terms and credit parameters as we have in the past.

We can, we must and we will work to turn matters around. WHEDA has set critical priorities to create more jobs, focus on strengthening the economy and develop new sources of mortgage capital. 

I’ve told audiences that I love my job because it’s like doing God’s work with a balance sheet. WHEDA and its partners will strive throughout 2012 to expand both employment and affordable housing options for Wisconsin families. WHEDA employees and I are committed to this goal.

Wyman Winston is executive director of the Wisconsin Housing and Economic Development Authority (WHEDA).

“In a crisis, be aware of the danger - but recognize the opportunity,” said President John F. Kennedy in 1959. The foreclosure crisis that currently afflicts Milwaukee, as well as other cities throughout the nation, is no different. It presents us with an opportunity.

The City of Milwaukee currently controls several hundred real estate properties that are not on our tax roll. These homes are not owned by any bank. They are literally owned by the City of Milwaukee. Unlike a bank foreclosure, which results when an owner fails to pay a mortgage, these properties are typically vacant and city-owned because of the owner’s failure to pay property taxes.

At the same time, fewer than 20 single-family homes in the city have incurred raze orders and must be demolished, because of flooding unleashed by a merciless storm that ravaged communities all over Milwaukee County in late July. Many people suffered damages and lost household items, but none have experienced the same level of loss as those homeowners who now must helplessly stand by and watch as their lifelong investments are bulldozed to the ground.

So Milwaukee’s foreclosure crisis has birthed a surplus of city-owned single-family homes, and recent flooding has resulted in a severe need for housing. There is a supply and there is a demand. My job as a policy maker is to try to connect the two.

That is why I have drafted legislation, which will be introduced at the Common Council’s next regular meeting on Sept. 1, that would create a program allowing homeowners with flood-induced raze orders to purchase a comparable city-owned single-family foreclosed home for just one dollar.

The program will accomplish two goals. First, it will enable the city to keep homeowners in Milwaukee. Second, it will allow the city to remove several foreclosures from its balance sheet. When the city has to take a home, it is an extremely costly proposition for taxpayers. Grass must be cut, and snow must be shoveled. The building has to be maintained and boarded up by contractors. Communities suffer, because foreclosed home give rise to neighborhood instability. Blight and graffiti often increase. Our police and fire departments must be extra attentive to vacant buildings. No one lives in the home, so the city receives no tax revenue.

Multiply the problem by several hundred properties, and you can see why city-owned foreclosures are like a millstone around Milwaukee’s neck. (And yet, amazingly, we’re far better off than the vast majority of comparable cities around the nation.)

Unfortunately, there is no long line of potential homeowners waiting to purchase city-owned houses. Milwaukee’s Neighborhood Investment Development Corp (NIDC) has leveraged federal foreclosure funding, including grant money, to target community-based groups and residents willing to fix up houses, but we are still not attracting enough potential homeowners.

On a recent trip down to Chicago, I sat down with Mayor Richard Daley for a lengthy conversation about urban policy. We both agreed that a strong city must be able to cultivate an environment that retains committed citizens, attracts new families and draws long-term homeowners. Improving educational options, increasing access to jobs, upgrading public spaces and lowering property taxes are all key components to creating such an environment, but simply creating incentives to spur homeownership is also a large piece of the puzzle.

Which brings us back to the July 22 storm that severely damaged several homes, rendering them uninhabitable. The City of Milwaukee needs homeowners to purchase, restore and maintain foreclosed houses. The total number of individuals who lost their homes to flooding is fewer than 20. It just makes sense to connect those who lost their homes with the opportunity to purchase a city-owned home for little or no money. Who else is more motivated to own and maintain in Milwaukee than one of our own who has already done so for years?

This is not an entitlement program. The City of Milwaukee has long had success in attracting commercial development by offering city-owned empty lots and other properties for one dollar. This new residential strategy would similarly reduce municipal expenses, decrease the tax burden for other residents, expand the tax base for the city by increasing home ownership, and add revenue for essential city services.

There is no way to turn back the clock on the foreclosure crisis. However, we can take advantage of the opportunity that the foreclosure crisis avails. Several Milwaukee homeowners are crying out for help. We cannot afford to stand by and do business as usual. Cities must be innovative, creative and willing to come up with new solutions that address today’s circumstances.

More information on existing housing programs is available at www.milwaukeehousinghelp.org.

Alderman Willie Hines Jr. is the president of the Milwaukee Common Council.

Two years ago, when New Berlin was in desperate need of non-contaminated drinking water, Mayor Jack Chiovatero wasted no time in reaching out to the City of Milwaukee to establish a regional partnership.

He exhibited considerable energy and earnestness as he attempted to secure the best deal possible for his constituents. It is thanks to his efforts that current and future generations of New Berliners can rest easy knowing that they will be able to access Lake Michigan water for years to come.

I happen to be one of the few aldermen who voted against that water contract, because I thought Milwaukee could have gotten a better deal - perhaps one similar to Cleveland’s Lake Erie regional partnership with its suburban communities.

Nevertheless, I came away from the process with great respect for the way “Mayor Jack” fought on behalf of New Berlin, relentlessly advocating for its future prosperity.

Part of our agreement for water required that New Berlin take a hard look at housing demographics and public transportation alternatives. As I have said on more than one occasion, any deal for Lake Michigan water is about more than mere H2O; it’s about commercial, residential and industrial growth for an area that could not grow absent water.

As that growth occurs, either better transportation connections are necessary to bring employees into the region or suitable residential options must be created to house them. Significant population growth requires one or the other - upgraded transit or more diverse housing.

Mayor Chiovatero and others had attempted to blend an element of “workforce” housing into the overall plan for New Berlin’s City Center. Those efforts should be commended. Rather than opening the floodgates for poor people to take over his city, I believe that the mayor was attempting to put New Berlin in the best position to prosper. Workers are simply part of the equation for any expanding municipality.

After reading and hearing various perspectives from all over the region regarding New Berlin’s affordable housing controversy, I am compelled to lend my voice to the discussion. As someone who grew up in public housing as a child and now spends a good deal of time analyzing prospective projects as an adult, I know a thing or two about the subject.

First, affordable housing is not code for slum, ghetto or crime. As chairman of the Housing Authority for the City of Milwaukee, I have read study after study on the relationship between crime and housing. Crime does not increase when affordable housing units are constructed. To the contrary, high-quality, affordable housing actually helps to lower crime in most cases. There is no reason to think that this type of housing would attract criminal activity in New Berlin.

Second, the strong subtext for those who harbor such assumptions is that low-income individuals and families are more inclined to commit crimes than to succeed in life. This is simply not the case. From Andrew Jackson to Abraham Lincoln to Barack Obama, the redemptive rags-to-riches story is not just for U.S. presidents - it is our national narrative. It is absolutely possible for people to move from affordable housing to middle-class housing to wealthy neighborhoods. In fact, it is commonplace in our country.

Third, and perhaps most important, the proposed housing component for City Center would target individuals and families with an income of $35,000 per year, which cannot truly be categorized as low-income or poor. True, people who make $35,000 per year are probably poorer than other residents in New Berlin, but college graduates, white-collar professionals, teachers and other strong contributors to society fall within that salary range. To say that this project will be a magnet for poor people is a gross misrepresentation of the facts.

To those New Berliners with anxiety about property assessments decreasing or criminal activity rising, I encourage you to maintain high standards for your neighborhoods and for your city. But I would also ask that you be open to making space for “non-wealthy” citizens who want to positively contribute to New Berlin’s social fabric and local economy. Just because a person happens to have a little less money, doesn’t mean that person is morally bankrupt.

Alderman Willie Hines Jr. is president of the Milwaukee Common Council.

I am a small business owner for the past 26 years. I am outraged that the large bank where I do my business has used my money to destroy my city. I learned all of this through my involvement in Common Ground.

Common Ground is an organization of congregations, schools, small businesses, nonprofits, unions and neighborhood groups which works to promote the common good.  A year ago Common Ground leaders began to examine the reasons for the large number of vacant and abandoned homes in various parts of the city and suburbs.

We learned some pretty incredible things. The three largest owners/trustees of foreclosed homes in Milwaukee and throughout the state are Deutsche Bank (Frankfurt), U.S. Bank (Minneapolis) and Wells Fargo (San Francisco). No local or community banks are on the list.

Combined, these three large national/international banks control hundreds of properties. Why is that?
Using my deposits and perhaps yours, these banks speculated in sub-prime mortgages. They sold or bought or invested in predatory loans that in many cases should never have been made. When the market went bust and these three banks got in trouble, you and I bailed them out with $42 billion in TARP money - our tax dollars.

Now there are hundreds of vacant and abandoned homes these three banks control and we the local taxpayers are paying to care for them through extra building inspection, fire and police services. A further outrage in all of this is that these three banks just reported third quarter profits of $5.8 billion. John Stumpf, the CEO of Wells Fargo, just received a bonus worth $10 million.

Enough of this craziness. These three banks must take responsibility for the devastation they are causing. This is why I am supporting the Common Ground campaign to hold these banks accountable for their actions.

Common Ground is asking these banks for three things:

• Responsible sales – Stop selling foreclosed homes at auctions and mass sales and work with Common Ground to develop a plan to sell these properties to responsible owners.
• Demolition – Pay for the demolition of the properties beyond rehabilitation and donate the land to a community land trust for future residential construction.
• Rehabilitation fund – Each bank contribute $25 million towards a $75 million fund which will be used to rehabilitate and sell these properties.

These are reasonable proposals for the reasonable disposition of these properties.  Throughout my business career, when I have made a mistake, I have owned it and corrected it. These banks need to do the right thing. “You broke it, you fix it.”

Bob Connolly, a principal at The James Company, is a member of Common Ground, a Milwaukee-based grassroots organization of congregations, schools, small businesses, nonprofits, unions and neighborhood groups. For additional information, visit. www.commongroundwi.org.

We need real reform in the financial markets. This reform should include how we regulate and how we audit and enforce these regulations.

Reform will not prevent another crisis that we have just witnessed or the S&L/Mutual Savings Bank crisis some three plus decades ago or frauds such as Madoff's. But reform can catch these problems before they get out of hand, which will reduce the impact on our economy.

• First, we must restore confidence to the secondary mortgage market. Liquidity in mortgages provided by the secondary market is essential to our economy. Banks and S&Ls should not be holding mortgages for long periods of time and should have a market to which they can sell.
  Require escrow for real estate taxes and homeowners insurance for all homes where the home buyer does not have a 20-percent down payment.
• Require that the buyer have a 20-percentcash down payment or that another entity, such as a mortgage insurer, the VA, FHA or Farmers Home Loan Agency, is covering the 20-percent difference between appraisal and mortgage.
• Forbid financial institutions from lending borrowers their 20-percent down payments.
• Ensure that income and assets listed are verified.
• Ensure that appraisals are realistic
• License all appraisers and mortgage brokers nationally, or at the very least, create a standardized system for appraisers and mortgage brokers, including the personnel of any firm issuing paper to be sold on the secondary market.
• Strictly regulate mortgage insurance companies. There have been too many incidents where these firms have had conflicts of interest (using subsidiaries as collateral) or have made risky business decisions that affect their contingent liability funds.
• Require that all use the standardized underwriting and forms issued by Fannie Mae and Freddie Mac.
  Make full disclosure and other paperwork simple to understand. Reduce this paperwork to one or two pages that are understandable.
• Where possible, require that homeowners with less than a 20-percent down payment receive counseling so that they have a budget and so the mortgages they receive are fair, that charges required of them are reasonable and that the property they are buying is worth what they are paying.
• Restrict such practices as "interest only mortgages," balloon mortgages or variable mortgages with teaser rates.

In regards to regulation of the financial industry, it is important to separate the audit and enforcement functions from the influence of politics and business as much as is possible. Politics influences enforcement.

A recent example was the firing of Gary Aguirre, an Securities & Exchange Commission (SEC) attorney lauded for his excellent work. He was fired because he wanted to interview John Mack for allegedly giving inside information to Pequot, a hedge fund. (I could have used examples from both Democratic and Republican administrations).

The New York Stock Exchange, the Nasdaq, the Federal Reserve Bank and the SEC did little to go after abuses on Wall Street. For years, Eliot Spitzer was a lonely crusader against Wall Street abuses.

"Self-regulation" by the industries themselves has been not been successful. The Federal Reserve failed to stop abuses in the banking industry through its audits. Their "objective" is to protect banking, but too often this means avoiding confrontation by the few banks that control most of the country's assets.

My suggestion is to create an independent agency that has many features of an inspector general or the General Accounting Office. Fund their budget for seven years at a time. Give a single 10 or 12-year year term to its leadership. Forbid its civil servants from becoming lobbyists or working in the industries they have regulated for five years.

This will not be perfect, but it will go a long way in isolating political influence on the agency.

Furthermore, I suggest that we separate regulation and oversight by an industry's function. Credit, life, health and property-casualty insurance companies manage risk; banks, S&Ls and mutual savings banks lend money. Mutual funds and annuities deal in collective investments. Money managers, hedge funds, financial advisors and stock brokers manage money or offer advice.

Multiple and contradictory regulations need to be reduced, but there should continue to be competition in enforcement. National tests, continuing education and licensing should be national. Licensing by states based on the national model should continue.

Bob Chernow is a futurist who predicted the S&L/mutual savings bank crisis, the future of mortgage backed bonds and the recent sub-prime crisis. He works in the financial industry. His opinions are his own.

The budgets of both Milwaukee Mayor Tom Barrett and Milwaukee County Executive Scott Walker highlight the need for better financing options for local governments in Wisconsin.

Realtors are never happy with increases in property taxes, because they directly impact a buyer's ability to purchase a home. The mayor and county executive have made some hard decisions in prioritizing their respective programs and services that are funded for 2010 in the face of cuts in state shared revenue.

With regard to Mayor Barrett's budget, we hope the common council can improve up on the mayor's proposal and save taxpayers additional funds while preserving core services by continuing to look for efficiencies in their operations, including privatizing some services where financially justifiable.

At the county, County Executive Walker has delivered another austere budget that addresses the chronic problem of pension contributions that is only exacerbated by the economy and increases in demand for services. The Greater Milwaukee Association of Realtors (GMAR) urges the county board to find better ways to fund county services without increasing the overall levy more than the county executive's proposal.

The state's decision to cut shared revenue highlights the need for Wisconsin to re-examine how local government is funded. The GMAR supports the Wisconsin Way's initiative to provide a comprehensive evaluation of current government financing and offer sound alternatives that will help taxpayers, and homeowners.

Mike Ruzicka is president of the Greater Milwaukee Association of Realtors (GMAR), a 4,000-member professional organization dedicated to providing information, services and products to its members to help them help their clients in buying and selling real estate.

Last year, I was among the first to say the economic sky was falling, and I took some grief for it at the time when others said the fundamentals of the economy were fine.

Now, I'm going to take another flyer, one that may or may not make it look like I know what I am talking about: I think the worst of this recession may be behind us, and I think an economic recovery will begin soon.

You may ask yourself, how can this be? I mean, the U.S. economy experienced its most violent contraction in a generation during the fourth quarter, with real gross domestic product (GDP) plunging at 6.3 percent, according to the U.S. Commerce Department

Going back to last year, the first sign of economic angst on my radar was the fact that houses in my neighborhood, which once were selling as soon as they were put on the market, were no longer being sold.

Then the housing market collapsed outright. Three houses in the neighborhood were foreclosed upon. However, in recent weeks, two of those foreclosed homes now have new owners, and the third is suddenly seeing a lot of traffic of prospective buyers.

That anecdotal observation aside, some fresh economic data this week may also be telling us that we may be on the cusp of a rebound:

• National sales of new homes rebounded 4.7 percent in February, according to the Commerce Department, after hitting a record low in January. Sales of new homes rose to 337,000 in February.
• Applications filed to refinance an existing mortgage rose an unadjusted 41.5 percent last week from the week before, after an announcement by the Federal Reserve Board caused fixed-rate mortgage rates to fall, according to the latest Mortgage Bankers Association (MBA) survey.
• Mortgage applications filed to purchase a home were up a seasonally adjusted 4.2 percent from the week before, the MBA said.
• The stock market is showing signs of life. The Dow Jones Industrial Average is on pace to post its third consecutive week of solid gains.
• The demand for machinery and other capital goods rose in February, driving orders for durable goods up 3.4 percent. The monthly rise was the first in six months.
• Production of automobiles in Detroit actually increased 24 percent in February from the previous month. Consequently, General Motors Corp. told the feds it will not need the latest round of bailout cash infusions. GM is finally getting a handle on its legacy costs, with 7,500 union workers agreeing to accept buyouts.
• On the technology front, the Nasdaq Composite Index soared so high this week that it erased all of its losses for the first three months of the year.

I am not alone in believing the start of economic recovery is just around the corner.

"With regard to the economy, we believe there are faint signs of light at the end of the tunnel," said Paul Kasriel, director of economic research for Chicago-based Northern Trust Corp., which has an office in downtown Milwaukee. Kasriel is the recipient of the Lawrence R. Klein Award for Blue Chip Forecasting Accuracy. "In sum, although the economy remains mired in a severe recession, we have seen nothing of late to dissuade us from our forecast of recovery getting underway in the fourth quarter of this year. In fact, what we have seen of late increases our confidence in the forecast."

Bruce Bittles, chief investment strategist for Robert W. Baird & Co. Inc., wrote in his "Market Commentary" bulletin Thursday that he is standing by his prediction that the economy will begin turning around by the end of the summer.

"Supporting our view for improving conditions in the economy later this summer has been the impressive performance by the stock market over the past two weeks. Since its intra-day low of 666 on March 6, the S&P 500 has rallied more than 23 percent. The Dow Industrials are now on pace to post a monthly gain for the first time since August 2008, and the S&P 500 is on pace for its first 5-percent monthly gain since 2003," Bittles said.

Bittles says spring is in the air, in more ways than one.

"Just as the seasons turn as we count the calendar months, the darkest days of this economic winter may now be yielding to an emerging spring - a time of uncertain weather (data), but also a time for cultivating if there is to be any hope of harvesting," Bittles said.

Sara Walker, senior vice president and investment officer at Associated Wealth Management in Milwaukee, is not ready pop any champagne corks just yet, but she is hopeful, nonetheless.

"'Flat is the new up' could be the best way to describe recent economic reports and the stock market's reaction to them. After being in the depths of despair just 12 trading days ago, the financial world is looking quite a bit sunnier," Walker said. "The main reason for a more encouraging outlook is that some very recent news is less bad than it has been! Investors look forward, and recent news reports indicate a glimmer of light on the horizon. Our outlook is for this recession to continue until late 2009, but with improvement each quarter over the prior quarter because of improved confidence."

The job market is a lagging indicator that won't bounce back until the stock market, the banking system and the housing sector are stabilized, economist Michael Knetter, dean of the University of Wisconsin School of Business, told us at the Northern Trust Economic Breakfast in January.

To be sure, we know more layoffs are coming. Thousands of them, no doubt. The path to recovery won't be a straight arrow.

We will know that a recovery has arrived when the BizTimes Daily starts reporting more stories about companies hiring new employees than stories about companies laying off employees.

For now, all we can do is exhale and hope we're on the right path.

Steve Jagler is executive editor of BizTimes Milwaukee.

A new study at the University of Wisconsin-Milwaukee released Wednesday claims to dispel some popular myths about the recent condo boom in downtown Milwaukee.

UWM's Center for Urban Initiatives and Research (CUIR) conducted the study, "Milwaukee's 'Condo Boom': 2008 Survey of Perceptions and Perspectives of Condominium Owners," between October and December, collecting responses from 804 city condo owners in downtown, a portion of the east side, and the Third and Fifth wards.

Here some parts of the study and some commentary from someone (me) who works in the Historic Third Ward:

• "Surprisingly, the results indicated that condo owners in these parts of the city are not mostly retirees and young singles. We found that while the popular assumption about who is behind condo growth had some merit, condo owners in this area were on average middle-aged professionals, many of whom have children."
  Comment: How many have children? How many is "many?" I can't remember the last time I saw a child in the Third Ward. Or a playground. Or a baseball field. Or a soccer field. Or even a daycare center. Where are these children?
• "Also, the notion that visiting Chicagoans or others from out of state are fueling the Milwaukee condo boom is not well-supported. Only a small fraction of owners primarily reside outside the Milwaukee area. Most owners use their condo as their primary residence, and the vast majority of resident owners previously resided in Milwaukee or its suburbs."
  Comment: In this time of economic duress, maybe the city should consider imposing a new Flatlander fee.
• "The average respondent has owned his or her condo for 3.3 years, and 44 percent of respondents are first-time homeowners."
  Comment: In today's credit crunch, the first-time homeowners are becoming harder to qualify for mortgages.
• "The average (median) age of respondents is 44 years old, although there are two somewhat distinct clusters grouped around the age ranges of 27-30 and 53-58 … Twelve percent of all households surveyed were retired households, in which at least one person was retired, at the time of their condo purchase."
  Comment: Actually, that is about what I would have guessed. No myths busted here.
• "More than 90 percent of respondents identified themselves as white or Caucasian, and fewer than 10 percent identified themselves as people of color."
  Comment: How shocking. White people live in expensive downtown condos.
• "Household Income. One-quarter of respondents fell into the $100,000-$150,000 income category, the category with the largest number of respondents."
  Comment: Again, what myths are we dispelling here?
• "Despite the desirability of the urban setting and lifestyle Milwaukee offers, some respondents expressed concern over issues endemic to city life such as noise (24 percent) and parking (15 percent)."
  Comment: Let's see. You move to the city and then you complain about noise and parking. No violin music for you, pal.
• "When asked to reflect on their original purchase decision, 80 percent of respondents said they would buy their condo again. A majority (57 percent) said they expected to still be living in their condo five years from now."
  Comment: Hope they like their condos, because they won't be able to sell them any time soon.

I wish the survey would have asked a couple more questions … Something along the lines of: "Do you have a very large dog that is cooped up all day in your condo? And when you take that dog running or walking early in the morning or later in the evening, do you fail to clean up after your pet does his duties on the sidewalk?"

Steve Jagler is executive editor of BizTimes Milwaukee.

At first glance, Tuesday's announcement that $39 million in federal funds will be available to help redevelop foreclosed properties throughout the state seemed like a great idea.

After all, the funds are intended to be used to stabilize neighborhoods and stem the decline of values of neighboring homes. The effort is part of the Neighborhood Stabilization Program (NSP) within the U.S. Department of Housing and Urban Development (HUD).

"Foreclosures have a devastating impact on neighborhoods and the state’s economy and we must do all we can to not only prevent foreclosures but also help rehabilitate impacted neighborhoods," said Gov. Jim Doyle. "These Neighborhood Stabilization funds will allow us to take our statewide foreclosure efforts to an even higher level."

The NSP grant can be used to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down payment and closing cost assistance to low- to -moderate income homebuyers.
The program also seeks to prevent future foreclosures by requiring housing counseling for families receiving home buyer assistance.

The grant was a part of a $3.92 billion announcement by HUD that went out to all states and to communities hardest hit by foreclosures.

That's all fine and good. However, I think the fluidity and the depth of the nation's financial crisis is perhaps rendering the practical applications of some of the government's programs futile and obsolete.
The NSP was designed to help people qualify for loans to move into homes that already have been foreclosed upon.

Think about that for a moment. Isn't that a bit like installing a security system after the home has been robbed? Or installing sprinklers after the home has been burned?

Or installing a sump pump system after the home has been flooded? Or installing a fence around a barn after the horses have all run out?

One other point. In current market conditions, good luck trying to find a bank that will provide a mortgage to a homebuyer who needs federal assistance to make a down payment or cover the closing costs.

Perhaps a better use of federal resources may be in helping people stay in their homes in the first place. Perhaps the funds could be used to help homeowners buy out their subprime mortgages early and get into traditional, stable, more manageable, 30-year, fixed-rate mortgages.

Perhaps that would provide some real relief on Main Street.

Steve Jagler is executive editor of Small Business Times.

Solar and wind energy may become primary components of our nation's alternative energy sources in the future. But how do we use this energy efficiently? What happens to the energy that is generated during non-peak usage periods?

For example, wind power generated at non-peak hours such as 3 a.m. can be wasted unless an efficient storage system is used. Conversely, solar energy is obviously not generated at night, yet some level of energy is still required to power homes and businesses. How do we store that energy so that it can be used when the sun isn't generating power?

The answer is energy storage systems which are available right now to commercial and even consumer usage. In fact, state-of the-art energy storage systems are currently on display at the Future House USA exhibit at the Beijing Olympics.

To think that we can effectively use solar and wind energy without some sort of energy storage is inconsistent with the purpose of renewable energy. The question, then, is how to use these alternative energy sources efficiently, allowing energy to be stored for use when it is most needed. That's where energy storage comes in to the picture.

Energy storage systems enable users to use energy when they most need it, while avoiding waste during off-peak hours when it is generated. This maximizes the use of wind and solar power and other alternative energy sources.

But energy storage has applications beyond the use of solar and wind power.

In electric utility applications, energy storage systems can be used to reduce the load on sub-station transformers and even fossil fueled generating stations that are working at maximum capacity during times of peak demand. This enables the utility to defer costly capital upgrades by charging the energy storage device at night and using that stored energy during these peak times and thereby reducing the work load on both the sub-station and generating stations. 

If current discussion is correct on the estimated $1 trillion that will need to be spent to upgrade the transmission and distribution infrastructure in the United States to be able to support the growing demand for energy and to accommodate proposed renewable energy generation, then the need for energy storage is even more urgent and compelling.

Energy storage can also have household implications. The Future House USA project currently on display at the Beijing Olympics is a Zero Net Energy structure, meaning it generates its own energy off-grid. The project uses a zinc bromide energy storage system to store solar energy generated during the day for use when the sun is not available to generate power.

Future House USA incorporates five elements: energy efficiency, indoor air quality, water consumption, storm water management and construction recycling in order to achieve a design to maximize the homes energy efficiency, environmental compatibility and sustainability. This design has achieved a ZNE home, generating and utilizing all of its own energy. Energy storage is a key element in achieving ZNE.

Our nation's energy independence will require renewable, green energy sources. But without the ability to store that energy, much of it will be wasted.

We simply can't afford that waste, particularly when there are viable solutions available today.

Rob Parry is the chief executive officer of ZBB Energy Corp. of Menomonee Falls.