By Andrea Shalal
President Joe Biden will announce steps to narrow the large and persistent racial wealth gap that divides Black, Latino and white Americans, although he will stop short of a cancellation of student loan debt demanded by civil rights groups.
Biden, a Democrat, will call for billions of dollars in grants and investments to benefit poor minority communities, as well as a big increase in federal procurement from small, disadvantaged businesses, and a crackdown on housing discrimination, administration officials told reporters.
The measures include:
• Expanding federal contracting with small, disadvantaged businesses by 50% to some $100 billion over five years, harnessing the buying power of the federal government, the world’s single biggest purchaser of goods
• Using $10 billion of Biden’s infrastructure plan – which must still be passed by Congress – to revitalize communities like Greenwood that suffer from persistent poverty, historic disinvestment and the ongoing displacement of longtime residents
• Targeting $15 billion in competitive grants to reconnect minority neighborhoods cut off in the past from schools, jobs and businesses by the building of highways
• Spending $31 billion to support minority-owned businesses
• Publishing new rules by the Department of Housing and Urban Development to aggressively combat housing discrimination
• A new inter-agency push to use standards, enforcement and regulatory action to reduce the gap in appraised values in minority and white communities that nearly doubled between 1980 and 2015, according to research by the University of Pittsburgh
• A new tax credit for development and rehabilitation of homes in minority neighborhoods to close the gap in pricing on the open market
WHY ARE THESE MEASURES NEEDED?
• Racial disparities persist over generations, limiting opportunities for wealth creation for Black and Latino families and reducing their ability to pass on property to their children.
• Data from the Survey of Consumer Finances show that the median Black household had a net wealth of $24,000 in 2019, or nearly 90% less than the median white household.
• Home ownership rates are much lower in communities of color, with just 49% of Latinos and 45% of Black Americans owning their own homes, compared with 74% of white Americans.
• The home ownership rate for Black Americans has declined 5% since 2001, compared with a 1% drop for white Americans, and is now the same as in 1968, the year the Fair Housing Act was passed by Congress.
• The Biden administration has not set any specific targets for home ownership rates, an administration official said, adding that closing the current gap “will take significant effort and time.”
• The COVID-19 relief plan, already passed by Congress, included $10 billion in mortgage relief for some 2 million borrowers who are seriously delinquent, many of whom are homeowners of color.