There is a persistent racial wealth gap in America that has long been overlooked. The Biden administration, which includes the first-ever Black vice president, has developed a plan to help close this gap and build Black wealth in America. Part of this is expanding upon the existing American Jobs Plan.
Here are the main points of the Biden-Harris administrations’ plans to build Black wealth and financial equality in the U.S.
The Fair Housing Act — a law that prohibited discrimination in home sales, renting and financing based on race, religion, national origin, handicap and family status — was passed in 1968. Today, 53 years after its passing, discrimination still exists in the housing market.
Early in his presidency, Joe Biden issued an executive order directing the U.S. Department of Housing and Urban Development (HUD) to address housing discrimination. HUD has taken steps to address the issue by sending its proposal to counter housing discrimination to the Congressional authorizing committee in the Senate and the House of Representatives for review.
In 2018, a Brookings study went beyond what the Fair Housing Act covers and found that homes in predominantly Black neighborhoods were often valued tens of thousands of dollars less than comparable homes in primarily white areas. President Biden plans to take further action by tapping Secretary of Housing and Urban Development Marcia Fudge to lead an initiative to address these racially biased home appraisals.
The federal government is the biggest consumer of goods globally, and Biden’s plan intends to use this to help Black business owners. The target is to increase governmentwide purchases from disadvantaged small businesses by 50% by 2026.
This would inject an estimated $100 billion into the coffers of these businesses over the next five years.
On top of these new initiatives, Biden will redirect funds from March’s American Jobs Plan proposal toward disadvantaged communities. Here’s how he plans to allocate funds to combat the wealth gap.
The administration proposes to build a $10 billion Community Revitalization Fund to support civic infrastructures in urban, suburban and rural areas with persistent poverty. This initiative would bring about economic activity, provide services, and build the community’s overall wealth.
Some projects this fund would tackle include:
- Investing in community-led projects that directly impact residents
- Developing vacant land and buildings
- Supporting pilot projects, tactical urbanism projects, pop-up spaces for local retail and more
- Increasing mobility by earmarking $15 billion in grants and technical assistance to repair transit systems to connect neighborhoods to jobs, schools and businesses
- Offering grants to plan community development and act on those plans
President Biden’s plan also includes tax credits to attract private investors to develop and rehabilitate affordable housing for families with low and intermediate incomes. The aim is to increase homeownership among these communities and start them on the path to asset building.
Many of these homes may cost more to develop or repair than they are worth, but Biden’s tax credits would cover the gap between development costs and the selling price.
So, if it cost a developer $120,000 to develop a home, but it only sold for $100,000, the developer could get a $20,000 credit on their taxes.
Zoning laws, such as mandatory lot sizes, mandatory parking requirements and bans on multifamily housing cause housing prices to rise. Ultimately, they push disadvantaged families further from homeownership.
Biden’s plan aims to end this by creating a $5 billion competitive grant fund that gives jurisdictions that eliminate this zoning much-needed flexible cash to expand available, affordable housing.
Bridging the wealth gap is a critical step in true equality in the U.S., and these proposals could be steps in the direction of building Black wealth in America. Although, as it stands, these programs are merely proposals from the Biden-Harris administration. While some of these programs may be possible through executive orders, many of them will require formal approval by Congress to be written into law.