Community Development Builds Framework to Close Racial Wealth Gap

This article was originally published in the Chicago Tribune on May 17, 2022.

Chicago’s cycle of neighborhood disinvestment may be at a turning point. As people examine the effects of long-standing systemic racism, they see how access to capital has determined winners and losers among city neighborhoods. In a seven-year period, lenders invested more money in a single North Side neighborhood than in all Black-majority communities combined. Public and private initiatives, from local planning partnerships to billion-dollar megadevelopments, can seize this moment to break a chain of inconsistent action, inertia and neglect.

The consequence of this disinvestment is Chicago’s widening racial and ethnic wealth gap. The historical stripping of wealth, combined with a lack of new investment, creates barriers to wealth creation for people of color or for neighborhoods to attract the capital infusions that allow communities to thrive. In the meantime, resources continue to be deployed that generate more wealth in prosperous communities. White per capita wealth now outstrips Black wealth tenfold and Latinx wealth eightfold. Investment in disinvested communities is critical to closing that gap. A pandemic-battered Chicago, seeing the economic gulf widen, may be both ready for change and willing to consider racial equity in the process.

Homegrown economic development projects have brought needed resources to people shut out of traditional professional and capital structures. For example, The Chicago Community Trust’s Pre-Development Fund, launched in 2020 as part of our Catalyzing Neighborhood Investment strategy, is providing early-stage capital to redevelop journalist Lu Palmer’s King Drive home as a Black media archive, renovate 43rd Street’s historical Forum Hall theater, redevelop a vacant utility building in Gage Park into a community and learning center for Latinx immigrants, and expand food businesses such as ChiFresh Kitchen, incubated at The Hatchery commercial kitchen in East Garfield Park and now opening its own space in Greater Grand Crossing.

These community projects provide opportunities for an emerging cohort of Black and Latinx professionals — the developers as well as their architects, lawyers, engineers and other specialists. Even the larger neighborhood-based projects are stepping up to develop and showcase expertise where they live. The Obama Foundation is placing minority partners in prime design and construction roles for the Obama Presidential Center, including its Presidential Partners alliance of minority builders.

At all stages of development, Black and brown-owned businesses must be assured a fair shot at contracts that allow them to hire, train and expand resources within the community. To tap new development opportunities, Black and brown professionals in design, development and construction draw on peer support, contacts and partnerships. Yield Chicago gathers a cohort of Black and brown professionals and mentors to tap resources for South and West Side projects. The Chicago Emerging Minority Developers Initiative encourages community-focused developers to participate in Chicago’s Invest South/West program.

In addition, Black and Latinx developers are beginning to participate in the development of large-scale developments. The $7 billion Bronzeville Lakefront development engages Black partners Zeb McLaurin of McLaurin Development, James Reynolds’ Loop Capital and Paula Robinson’s Bronzeville Community Development Partnership. Community development provided the runway that allows investors, lenders, businesses and developers to transform the former Michael Reese hospital campus through innovative partnerships with private equity, endowments and individual investors

In bringing new funders to the table and minority talent to the drawing board and the jobsite, development at scale will sustain successful local retail, services and entrepreneurial activities. This is what gives projects like Bronzeville Lakefront, ChiFresh Kitchen’s new facility in Greater Grand Crossing and other community and city-led efforts the financial and social impact that Chicago’s South and West sides need. Equitable development spreads its benefits across the city. By cultivating Black and Latinx enterprise, Chicago’s real estate and investment community will create wealth in Black and brown communities, reverse out-migration and help close the racial wealth gap.