Closing the racial wealth gap
IT’S BEEN MORE than seven years since the Boston Federal Reserve Bank published a report, titled “The Color of Wealth in Boston,” that has served as something of a regional wake-up call to the issue of the enormous racial wealth gap in Greater Boston. The report highlighted the now-often cited, but still no less jaw-dropping figures on household net worth in the region. They showed that the median net worth of White households was $247,000; for Hispanics it ranged from $0 to $3,000 depending on their background, while for US born Black households it was just $8.
Are we making any progress in closing those gaps? What are the most promising approaches to doing so? Betty Francisco, the CEO of the Boston Impact Initiative, a nonprofit impact investment fund working to increase wealth and asset-building opportunities for communities of color, and Mike, Leyba co-executive director of the community organizing group City Life/Vida Urbana, dug in on those questions on this week’s Codcast.
“We think of Massachusetts as a very liberal, progressive state. We’re the first on many fronts, but yet we’re one of the most unequal states when it comes to asset wealth,” said Francisco.
Francisco’s organization is one of the signs of movement by leaders in the region to begin tackling the problem. Founded in 2017, the Boston Impact Initiative uses figures from the Boston Fed study in its “pitch deck” to investors, said Francisco.
Their first round was a $7 million fund they used to invest in 50 businesses across Eastern Massachusetts ranging from manufacturing to retail, food, and climate-focused enterprises, said Francisco.
“We want our business owners both to build wealth for themselves as founders, but also for their workers,” she said. “And so we support businesses owned cooperatively or employee-owned. We encourage businesses to adopt those models or move towards those models because that is how you start to create wealth for local communities. And we know that particularly business owners of color – they put that wealth back into their communities. They’re much more likely to buy locally or to source employees locally. So that wealth recycles in our own communities.”
Meanwhile, said Leyba, there are encouraging developments in public procurement, where attention is being drawn to making sure businesses owned by entrepreneurs of color get a fair share of public contracts.
“I think it’s a really positive thing,” said Leyba. “It’s not going to get us out of this wealth inequality instantly, but I do think that there has been a lot of important groundwork that’s been a result of this [Color of Wealth] report and a result of a lot of the organizing that’s happened the last decade.”
Leyba and Francisco both pushed back on the singular focus on home ownership as the path to closing the racial wealth gap. The homeownership mantra has often seemed to flow logically from the observation that home equity often represents the biggest asset of middle-class households. Both Leyba and Francisco said the more people of color can own their own home the better. But, as he laid out in a recent Twitter thread on the topic, Leyba said homeownership is often out of reach for low-income households, who in the Boston area are often so rent-burdened they can barely keep their heads above water.
“We can’t just have such a narrow vision of home ownership as the thing that’s going to get us out of this wealth gap,” Leyba said. That focus, he said, results in “skimming folks from the top,” but doing nothing to address the wealth gap facing lower-income households. Leyba said efforts to protect tenants from exorbitant rents – such as the innovative purchase of 114 units announced last week in East Boston – should be part of any broad effort to tackle the racial wealth gap. If currently rent-burdened households paid rent at a level that matched their income, “in Boston that would put an additional $9,300 in the pockets of families every single year,” he said. That money can then go toward investment in a business, educational costs, and all the other expenditures that can produce a return and help build wealth.
He pointed to the announcement last week of a joint purchase by an East Boston nonprofit and the city of Boston of 114 units of housing in that neighborhood that will be maintained as affordable housing as an example of how preserving affordable rental housing can give households the financial breathing room to build wealth.
“We are in a time where we’ve got to be innovative around how we invest in real estate, how we bring in community to have an ownership stake and at least governance and control over what happens in their own backyard,” said Francisco. She called it an “exciting time,” but also one that requires cooperation of government when it comes to zoning, tax incentives, and other reforms needed to “test many of these models.”
Meanwhile, the Boston Fed, the Greater Boston Chamber of Commerce, the Barr Foundation, the Boston Foundation, and Eastern Bank are collaborating on an update of the wealth-gap report that will go deeper than the original, 2015 study.
“It will be more of a longitudinal study,” Francisco said, “to understand what has changed, how do we better measure the racial wealth gap, and then what are some of the innovations, what are some of the programs, policy changes that have been put in place and/or that need to be put in place to exponentially address the drivers and the causes of that gap.”
Rausch vs. Dooley: Democratic state Sen. Becca Rausch of Needham is facing a challenge from Republican Rep. Shawn Dooley in a redrawn district that Dooley views as a welcome mat to his candidacy. Dooley has been endorsed by Gov. Charlie Baker, while Democratic gubernatorial candidate Maura Healey is staying out of the Rausch-Dooley race. Read more
Throw them all out: Sen. Elizabeth Warren calls for a top to bottom change in leadership at the MBTA. Along with Sen. Ed Markey, she calls the current management and the authority’s oversight agency failures. Read more.
Unions backing DiZoglio: Public sector unions are going all in for Sen. Diana DiZoglio in the race for auditor, with union-backed super PACs spending more than $600,000 on her behalf. Her Republican challenger, Anthony Amore, says the heavy union spending raises questions about her impartiality and her independence if she is elected, since the auditor’s job centers around scrutinizing state operations.
– The auditor also plays a central role in approving privatization efforts in state government, an issue of major importance to public sector unions. In response to a questionnaire from one union group, DiZoglio said she would be skeptical of any privatization initiative and would favor extending her oversight of privatization initiatives to municipal government. Read more.
Replace Tobin with tunnel: John Vitagliano, a former member of the Massport board, says the Tobin Bridge should be taken down and replaced with a tunnel. Read more.
More work to do: Carlos Santiago, the state’s outgoing higher education commissioner, hails the promise of the “Equity Agenda.” Read more.
FROM AROUND THE WEB
An East Boston nonprofit and the city of Boston have teamed up to buy 114 units of housing in the neighborhood that will be maintained as affordable, deed-restricting rental housing in a bid to fight off displacement of lower-income tenants. (Boston Globe)
Swampscott police offer tips on how to interact with coyotes after a man out walking his dog on Saturday night was surrounded by nine coyotes. (Daily Item)
The Berkshire Eagle asks: Is the North Adams City Council toxic or are its members acting like kindergartners.
A Texas sheriff certifies that immigrants flown from Texas to Martha’s Vineyard were victims of a crime, qualifying them for special visas. (GBH)
Leaders of many of the world’s major democracies are increasingly sounding the same themes as Vladimir Putin’s authoritarian rule in Russia. (Washington Post)
New England Patriots owner Robert Kraft, 81, ties the knot with Dana Blumberg, a 47-year-old doctor, in New York City on Friday night. Sports announcer Al Michaels introduced the couple and the guest list included Elton John, Jon Bon Jovi, and Tom Brady (without Gisele). (Page Six)
US Rep. Richard Neal tells the editorial board of the Berkshire Eagle that the House is a “jump ball” between Democrats and Republicans, meaning either party could win.
The debate over Question 1 – the so-called millionaire’s tax – is zeroing in on the issue of how much the tax surcharge would hit one-time millionaire’s through sale of a home or business as opposed to the uber wealthy that are its main target. (Boston Globe)
Gorton’s of Gloucester donates $250,000 to the town’s Sawyer Free Library. (Gloucester Times)
We may not be No. 1, but Massachusetts ranks as the fourth most expensive state in which to retire. (USA Today Network)
Teachers in Malden and Haverhill, frustrated with the lack of progress on a new contract, go out on strike. (WBUR)
Springfield agrees to pay $150,000 to settle a lawsuit brought by a middle school student who was assaulted by a school resource officer. (MassLive)
How many arrests were at New Bedford schools during the 2021-22 school year? It’s complicated. (New Bedford Light)
Read it and weep: The Buenos Aires subway, nearly as old as the MBTA, is everything the T isn’t, delivering reliable, frequent service to three times as many passengers each day. (Boston Globe)
A handful of Fall River residents object to joining the MBTA service network, which is necessary if South Coast Rail trains are to pick up passengers there. (Herald News)
Legislative leaders say former US transportation secretary Ray LaHood, who helmed a 2019 safety review of the MBTA, will testify at a Beacon Hill hearing on the T next week. (Boston Herald)ENERGY/ENVIRONMENT
Massachusetts communities looking to change electrical suppliers through a program known as municipal aggregation, which can lower consumer electric bills and promote renewable energy, are facing big delays in getting approval for the move from state regulators. (Boston Globe)