Clearing the hurdles to achieving Black wealth

The racial disparities between Minnesota’s Black and White residents have been widely reported and discussed, especially in recent times following the murder of George Floyd and the civil unrest that followed within the wake of his death. Homeownership, education, employment and health outcomes are only a number of areas through which Black Minnesotans experience large disparities in comparison with their White counterparts. 

While many organizations and government agencies have highlighted the disenfranchisement of Black Minnesotans and put forth solutions to tackle the systemic racism that contributes to the disparities, lots of these conversations have occurred in silos. 

In recognition of the interconnected role community organizations and elected officials have in providing an answer, U.S. Senator Tina Smith (D-MN) facilitated a panel on “Constructing Black Wealth” with local Black leaders within the banking, education, and community organizing sectors serving the Twin Cities and greater Minnesota. 

The panel discussion took place on February 10 at Metro State University. Among the many panel participants were Northside Economic Opportunity Network (NEON) President Warren McLean; Vice Chancellor of Equity and Inclusion for Minnesota State Colleges and Universities Andriel Dees; Senior Vice President of First Independence Bank Damon Jenkins; Managing Director of Minnesota Business Coalition for Racial Equity (MBCRE) Tiffani Daniels; and African American Leadership Forum (AALF) CEO Adair Mosley. 

Senator Smith’s office released a press advisory ahead of the panel highlighting a number of the challenges that Minnesota’s Black community is facing broadly. Only 25 percent of Black households in Minnesota own their home in comparison with 76 percent of White households. 

She co-sponsored the “Fair Access to Financial Services Act,” the “Alternative in Reasonably priced Housing Act,” and has led a bill to support Community Development Financial Institutions (CDFIs) to handle gaps in economic opportunity. Moreover, she made recommendations to make sure systemic exclusion of communities of color is addressed through enhanced data collection and other measures in updating regulations within the Community Reinvestment Act. 

In her opening remarks, Senator Smith referred to the Urban Institute’s report that the Twin Cities has the worst Black-White homeownership gap within the country, which peaked within the Fifties. (See “Jim Crow of the North” article in Metro on pg. 2.) 

Currently, large real estate investors and associations have blocked access to reasonably priced homes for a lot of, but they’ve a protracted history of blocking members of the Black community. Just last 12 months, Twin Cities real estate agents apologized for furthering the gap in homeownership between Black and White Minnesotans. 

Much of the panel’s discussions revolved around the problems of housing, job opportunities, transportation, and access to financial resources. Since lots of these are deeply rooted issues attributable to systemic racism, panelists called for structural solutions. 

Mosley suggested that the federal government could function a conduit for change as community organizations help channel those resources on to the people in need. He pointed to organizations like NEON for instance of community resources which can be capable of uplift entrepreneurs to scale their businesses. 

“The unit of change is the neighborhood,” Mosley said. “We’d like those financial levers as well. We’d like the capital. We’d like to remove the structural barriers that exist when it comes to accessing capital, particularly for Black entrepreneurs.”

Recent reports of business closures in North Minneapolis underlined the panel’s discussion of disenfranchisement as each Aldi and Walgreens have exited the North Side. This may now make Cub Foods the one location to offer each groceries and pharmacy needs in North Minneapolis. The panel pointed to this recent development for instance of how the disenfranchisement of the Black community has been an ongoing issue.  

“This disinvestment in Black communities is just not just historic, it’s current. It’s still happening,” Senator Smith said.  

Daniels of Minnesota Business Coalition for Racial Equity MBCRE spoke in regards to the relationship small business owners and entrepreneurs can have with larger businesses that might create a sustainable ecosystem. 

“There are a set of tall hurdles to clear for a business to give you the chance to qualify to function a supplier for a few of our large enterprises here,” she said. “Plenty of times Black-owned businesses don’t meet those hurdles, and so we want to discuss what’s in the best way.”

McLean, whose work at NEON directly supports the event of Northside business owners, has seen what the recent closures of companies has done to residents of the realm, but said that with the fitting investment more businesses could be drawn to the realm. 

“I feel one in all the things that we want to begin with is investing within the Black community, investing within the indigenous [local] people there,” he said. “We keep going outside. And I feel that regardless that Aldi and Walgreens are leaving, right down the block Satori Village is being built. 

“It’s a $60 million market-rate housing. When those people are available in, they’re going to wish a spot to buy. Someone’s going to maneuver in and make the most of that chance.”

Following the panel, Senator Smith took questions from the press about her work in Washington geared toward providing avenues for the Black community to achieve access to financial resources and eventually accumulate wealth. 

“I’ve been quite focused on the work we want to do to expand access to credit and to capital,” she said. “A couple of things that I’m working on in Washington are really informed by these community leaders and others in Minnesota, but additionally what I see is being successful in communities across the country.”

Amongst those things is how individuals on the grassroots level can leverage community development financial institutions. Based on Senator Smith, it’s a robust strategy that have to be expanded. 

Jenkins, senior vp of the First Independence Bank, shared this point throughout the panel, stating that a number of the barriers to accessing financing needed to be reshaped to best serve communities which have historically been blocked from these resources. 

“As we expect in regards to the systemic inequalities that plague communities of color, we understand it’s very intentional, and so we now have to be just that intentional in changing it,” Jenkins said. 

One other area of Black wealth creation that Senator Smith is looking to spotlight in Congress is housing and making it easier for Americans to enter the housing market. AALF’s Adair spoke a few crisis of massive institutional investors buying up homes. 

“Not only are they not taking good care of those homes, but they’re really pushing them out of the homeownership market,” Smith said. “There’s some good takeaways to go about that across the country, and I would like to bring that back to Minnesota and likewise be certain that that we’re holding these big institutional investors accountable.”