Statewide Housing Amendment: An Innovative Solution to Close Racial Homeownership Gaps

Isaac Russell

By Isaac Russell Director of Policy

Across the country, many states and municipalities are facing critical housing challenges—shortages of affordable housing can lead to crises for low-income renters, which also means that potential first-time homeowners are priced out of the market.  

In Minnesota, these pains are felt acutely and disproportionately by Indigenous people and people of color. The Center’s Indicators for an Inclusive Regional Economy show racial homeownership gaps persist, even among households with similar incomes. This suggests that Black, Indigenous, Latine, and Asian families face additional burdens to homeownership beyond earned income. Among families earning between $50,000 to $100,000 annually, only 41% of Black households own their homes compared to 72% of White households. These racial disparities also exist among low-income renters. Low-income Korean American, White, and Black households are hit hardest, with more than 3 in 5 renters in these communities being disproportionately rent-burdened.  

Dedicated Affordable Housing Dollars: A Constitutional Approach 

To find solutions, policymakers and industry groups are looking for statewide solutions to address these housing crises. One innovative solution to move the needle is a proposal for a constitutional amendment that would dedicate revenue to the construction of affordable housing, rental assistance, and homeownership.  

While this solution alone will not solve racial inequities in housing, it does address one of the foundational problems, which is a shortage of affordable housing. If we define affordable housing as 30 percent of area median income, the metro area is short approximately 71,491 units. To build a single unit of affordable housing, including years-long subsidization of the unit, costs approximately $300,000. This comes out to an over $21 billion price tag to build these units. According to the Minnesota Housing Partnership, our state is short approximately 103,600 units with a price tag of $31 billion. 

Accessible Homeownership Builds Inclusive Regional Economies 

Across Minnesota, this crisis extends to families that wish to purchase a home. It is estimated that 27,000 families can afford homeownership but continue to rent due to the lack of available housing stock within their price range. To facilitate more home ownership among underrepresented communities, we must address stagnant funding to programs designed to help construct new housing. These include programs such as the HOME Investment Partnership Program and the Community Development Block Grant Program, which have helped to compound multi-year housing shortages. The urgency for such investments can be seen in the Metropolitan Council’s projections, which show the region will gain 367,000 new households by 2040. That means we will need nearly 13,000 new housing units of all types. The region has produced less than this number per year for the past decade! An inclusive economy makes the stability and wealth-building benefits of homeownership accessible to all households, regardless of their race or ethnicity. 

Systemic Solutions for Systemic Problems 

All of this goes to the heart of why the Center supports a constitutional amendment that dedicates three-eighths of a percent sales tax to the building of affordable housing, makes financial resources available for homeownership, and provides support for housing stability. Modeled after our very successful Legacy Amendment, this initiative creates three advisory committees that will provide recommendations for lawmakers when they decide how they will allocate resources.  

To make this happen, we need legislation that authorizes a referendum for voters. This referendum will require support from a wide array of stakeholders to let the public know of this initiative and also a show of support from constituents.  

We know this one amendment will not solve all our housing challenges, but it is one of the tools in the toolbox that will build the homes Minnesotans need.   

• Learn more about the amendment

• Contact your legislator, let them know what you think

• Explore the Indicators for an Inclusive Regional Economy 

• Read Our 2023 Policy Priorities 

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Are You A Racial Equity Navigator?

Tawanna Black

By Tawanna A. Black, Founder & CEO

Have you had to navigate any potholes lately? Perhaps you even took a drive down a winding road and had to navigate tree branches that had fallen after our early spring snow fall, while also looking above to ensure that low hanging branches were not scraping the roof of your car…WATCH OUT! Don’t swerve too far to the right or you’ll hit the car in the next lane, and don’t you see the officer sitting in the parking lot up the street, he’ll give you a ticket if you’re not careful!

Navigating the Potholes of Racism

As I drove to the office this week, and navigated the terrain, I was reminded not only of our work helping employers dismantle systemic racism, but of the experience of Black women, pushing hard to achieve our personal dreams, the dreams of our families, and the dreams of our communities, while navigating the visible and invisible pot holes of racism, sexism, conscious and unconscious bias rooted in capitalism that often jump up out of nowhere to force us into new lanes, vehicles, and opportunities.  

I continued the drive and thought about how important it is to have other drivers who are not only looking out for themselves, and the obstacles in their own lanes, but also watching my lane, and the obstacles that might cause me to slow down, speed up, pick up a passenger or two, or change lanes all together. As a large recycling truck who had much greater visibility than I did in my vehicle pulled alongside me, I began to consider how much I value those fellow drivers who have a heightened consciousness about the limited view their fellow drivers have of upcoming obstacles…how much I value those drivers who put their bright lights on so that others can see challenges up ahead, and those who bring their plows out to clear debris so that others can keep moving.

In this journey of building racially equitable and inclusive regional economies, we need each other, the same way we need each other as we navigate snowy, pothole, and tree branch filled roads and sidewalks. While policies and practices are important, dismantling systems of oppression and building anti-racist organizations require much, much more. 

Share Your Resources

If you have information, power, money, or assets, information, or knowledge it must be shared with people in a position to create change, who need those resources to accelerate progress. Relationships must be kindled, curated, and deepened across race, sector, neighborhood, and class in meaningful ways that transform our very way of being. Our formal and informal decision-making must begin to change to invite others to not only provide input, but to make the decisions, distributing power and accountability. And we must begin to interrogate our beliefs about one another that have undergirded generations of biased and racist policies and practices, actions, and inactions. We must ask ourselves what is true, and how know it’s true; why we believe what we believe about people who live, work, and play differently than we do, and how we can challenge our assumptions when making decisions that impact people’s lives, communities, and livelihoods. 

Stay on the Journey

These four conditions of systems change: Resource Flows, Relationships & Connections, Power Dynamics, and Mental Models, have a significantly greater impact on our everyday interactions than policies and practices, just as the fallen tree branches and the actions of our neighbors have on our ability to safely navigate sidewalks and roads after a winter storm on an early spring day. The potholes of racism won’t go away on their own. It’s going to take ALL OF US. I hope we can count on you to stay on the journey!

In solidarity~
Tawanna

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Our $65 Billion Opportunity: How Investments in Racial Equity and Inclusion Will Impact Communities and the Economy for the Better

Isaac Russell

By Isaac Russell, Director of Public Policy

On January 24, Governor Tim Walz made national headlines with his proposed $65 billion 2024-2025 fiscal biennium budget, the largest in Minnesota history. The Governor understands that addressing the state’s economic, social, and infrastructure needs on this scale requires big money. The state’s unprecedented $17.6 billion budget surplus will also come into play.

This is our moment -- Minnesota’s once-in-a-generation opportunity to chart and build a racially equitable, inclusive, and sustainable path forward that has rippling impacts on the state’s families and economy for years to come.

Policy Leadership
While I’ve led the Center’s public policy for just over a year, the organization has had a strong presence at the Capitol for nearly five. Bold social and economic policy change requires tenacity, strategy, and partnerships.

What I can also tell you is this: There has never been a better time for initiatives that have a strong racial equity component than right now. And with this unprecedented amount of money, I urge organizations that are doing racial equity work to offer solutions that are more systemic in nature.

New Day Dawned
As I walk the capitol corridors, the change in the air is palpable. It’s a powerful thing to witness leadership of color in both chambers shaping and passing legislation that prioritizes the experiences of and impacts to Black, Indigenous, Latino, and Asian communities in new ways.

Less than two months into session, this momentum has already resulted in significant policy change. The CROWN Act signed into state law. Juneteenth designated as a state holiday. Plus, there are proposals to establish new offices that prioritize Black health and missing and murdered Black women.

This is what progress and momentum looks like. My responsibility to lobby for the Center’s public policy priorities – Racial Equity Impact Notes, $10 million direct appropriation for job creation, and increasing the state procurement and preference equity cap -- is made easier by the partnerships there now that weren’t in previous years. We are strengthening relationships and forging new ones.

There is no time to waste. Let’s get into it.

$65M Budget Highlights
Here’s a budget breakdown of what I see as key investments towards a more racially equitable and inclusive state.

1. Investments focused on employment, wages, and wealth-building in Black, Indigenous, Latino, and Asian communities. This includes targeted investments in small business supports, workforce programs, and homeownership that recognize and address historic and systemic disinvestments and barriers that have hindered Minnesota’s economic competitiveness.

2. Investments in businesses along commercial corridors. Examples: the $85 million proposed funding to the Mainstreet Revitalization Fund along with funding for Small Business Navigation Program, Small Business Development Centers, and the Small Business Partnerships Program are critically important to creating jobs, building wealth, and growing our economy.

Through these programs, we hope to see increased coaching, access to flexible capital like forgivable loans, and small business consulting. We also need to ensure these programs have a strong racial-equity orientation with significant outreach to minority-owned businesses.

3. Advancing racial equity in Minnesota’s workforce. The Governor’s budget aims to increase family sustaining wages for Black, Brown, and Indigenous workers by recommending $60 million in training and employment services for workers traditionally overlooked.

4. Emphasis on developing workforce opportunities for family sustaining wages, which is one of the metrics we use to evaluate if our economy is racially equitable and inclusive.

5. Proposed funding for increasing home-care workers’ rates. This action would provide an increase to over 20,000 workers statewide. We define a living wage as a worker who earns at least $39,795 annually, of which only 49 and 44 percent of Black and Hispanic workers earn, respectively.

6. Expansion of the Child Tax and Dependent Credit. Estimates show this would help roughly 100,000 households with child-care costs. Families that earn less than $200,000 could get up to $4,000 if they have one child, $8,000 for two, and $10,500 for three. A child tax credit for lower-income Minnesotans could give families $1,000 per child, up to $3,000.

7. $1 billion expansion of housing funding. This amount includes funding for rental assistance, workforce and affordable homeownership, assistance to those facing homelessness, and workforce housing.

While $1 billion is a large number, even more is needed. The Twin Cities alone faces a housing shortage of at least 45,000 affordable units. This number does not take into account the struggles of families trying to purchase their first home. While there is some funding for the construction of affordable homes and home down-payment assistance, we know more resources are needed.

Committing to the Long Term

While the Governor’s budget makes historic investments in Minnesota and includes a strong equity component, we know that racial equity and inclusive growth will require sustained efforts across time and at different levels of government.

It will mean strong leadership to carry the work forward beyond the next two years and from one administration to the next to keep Minnesota moving forward for all Minnesotans.

We can do it.

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Center Applauds City of Saint Paul Actions to Address Historic Legacy of Wealth Extraction

Suzanne P. Kelly

By Suzanne P. Kelly, Chief of Staff

Home ownership not only establishes a sense of place, community, and stability but multiple studies show it has been the most effective intergenerational wealth building strategy Americans have known.

Yet 2023 research published by the California Housing Finance Authority, suggests that discriminatory housing practices such as redlining, racial covenants, and predatory lending has disproportionately kept Black families from owning homes at the same rate as their white peers.

In Minnesota, 77.5 percent of whites own their own home, compared to just 30.5 percent of Blacks; the 5th worst homeownership gap in the United States. Not surprisingly, that gap corresponds to an equally abysmal wealth gap among Black and White Minnesotans. 

One need only look to St. Paul for a relevant example of legally sanctioned government actions that resulted in disproportionate harm to Black residents.

From 1956 to 1968, local and state leaders seized by eminent domain, land upon which  hundreds of Black-owned homes, and businesses in St. Paul’s Rondo neighborhood sat, in order to construct a new interstate corridor. At the time nearly 80 percent of St. Paul’s Black residents lived in the Rondo neighborhood.

Björgvin Sævarsson, founder and CEO of the Yorth Group, reports that “over 700 homes were lost to I-94. Along the way, the ecosystem for the previously thriving local [Black] economy was destroyed with many businesses closing as a result.”

Sævarsson determined that the intentional routing of I-94 through the heart of Rondo resulted in a loss of at least $157 million by 2018 in intergenerational wealth being passed down from homeowners to their children and grandchildren.

Rondo is just one local example of legally sanctioned, post-slavery actions taken across the United States that have left a legacy of Black exclusion educationally, socially and economically.

Efforts to repay Black Americans for their decades of loss have rarely gained traction. But on January 4, 2023, the Saint Paul City Council voted to establish the Saint Paul Recovery Act Community Reparations Commission. 

The ordinance, which takes effect on February 13, 2023, establishes a commission that will recommend ways for the city to make reparations to Black residents whose ancestors were enslaved.

The vote came two years after the City apologized, for its role in “systemic discrimination […] perpetrated through redlining and racial covenants, access to housing, environmental injustice and the removal of St. Paul’s Rondo neighborhood (Gray, 2023).”

These efforts also follow the adoption of the 2021 Ramsey County Inclusive Economic Competitiveness & Inclusion Plan, which endorsed significant local and county housing investments and acknowledged the historic policies that extracted wealth from Black families, necessitating courageous policies to catalyze systemic equity building.  

The Center commends the actions of policymakers to address the wealth, unity, and community taken from the residents of the Rondo community. The multi-generational effects of the United States highway system on Black communities can truly never be measured, but our actions to repair the harms must begin now.  

• Learn more about the Center for Economic Inclusion’s work with Ramsey County, the City of Saint Paul and others to disrupt and dismantle systemic racism and bias to construct and sustain an inclusive, equitable and growing regional economy for all here 

• Learn more about the Saint Paul Recovery Act Community Reparations Commission here. 

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2023 Legislature: Breakthrough Year for Racial Equity and Inclusion in Minnesota?

By Tawanna Black, Founder & CEO

Tawanna Black

When the 2023 Minnesota Legislature was called to order on January 3, lawmakers and advocates throughout the state turned their attention to top priorities, including allocation of the unprecedented $17.6 billion budget surplus and drafting a two-year budget.

Both the surplus and budget represent historic opportunities to drive economic growth through job creation and increased GDP by making substantive, structural, and equitable investments in Black, Indigenous, Latino, and Asian individuals and communities across our state.

At the Center for Economic Inclusion, we’re committed to closing racial employment, income, and wealth gaps, and building racially inclusive and equitable regional economies. The Center equips public- and private-sector employers and policy makers to dismantle systemic racism and institutionalize anti-racist policies in shared accountability and solidarity with Black, Indigenous, Latino, and Asian communities.

History proves that when racial equity and economic inclusion are not prioritized in policymaking, the result is often inequitable policies, loss in economic growth, and harmful impacts to Black, Indigenous, Latino, and Asian communities that can ripple for generations.

We are headed in the right direction. Over the last decade, Minnesota’s Legislature has increased the number of data-informed policies and investments focused on closing stagnant racial employment, income, and wealth gaps. The state Legislature is also more racially diverse now than at any point in its 174-year history. These policymakers are positioning Minnesota to win by leveraging their diverse lived experiences, perspectives, and that of their constituents as they legislate.

The future of Minnesota’s economic growth and competitiveness relies upon the willingness of policymakers to enact and invest in anti-racist policies and solutions. To support policy makers in building an equitable, just, and prosperous economy, this legislative session we are advocating for the following policies.

Policy: Racial Equity Impact Notes (Read More)

The Center and a coalition of partners will continue advocating for Racial Equity Impact Notes, a tool similar to a budget or environmental impact note, that empowers policy makers to assess the impacts of a proposed policy or investment on closing or widening racial disparities. In 2022, the Center conducted research on the results of similar impact notes in other states and partnered with leaders across the state to develop strategies we will recommend to Minnesota’s Legislature to actively engage Minnesotan’s in more data-informed, transparent, and consistent analysis of policies aimed at building the most inclusive, competitive, and prosperous state in the country.

Policy: $10M Direct Appropriation for Job Creation (Read More)

The Center is uniquely positioned and dedicated to create inclusive regional economies for Minnesotans of color. We have demonstrated our capacity and commitment to develop groundbreaking and actionable research, data-informed tools, and frameworks, including our Racial Equity Dividends Index, Vanguard Accelerator, Indicators for and Inclusive Regional Economy, Vanguard Research, Racial Equity Impact Notes Research and equity consulting services. With a track record of success, we are uniquely positioned to continue helping Minnesota employers take actions to build anti-racist and equitable workplaces, and helping state policymakers facilitate cross-sector, community-driven development.

After just five years, we’ve helped many Black-owned businesses create and grow jobs statewide and have created almost 30 jobs at the Center itself. An investment in the Center for Economic Inclusion’s job creation strategies will pay multi-generational dividends for all Minnesotans.

Policy: Increase State of Minnesota Procurement Preference and Equity Select Cap

We advocate for increasing the percentage when contracting with the State of Minnesota from 6% to 12% and raising the limit for non-competitive contracting from $25,000 to $100,000. The State of Minnesota currently allows the Commissioner of the Department of Administration to award a 6% preference to businesses owned by women, minorities, economically disadvantaged, and persons with substantial disabilities. These groups are also eligible for the Equity Select program which allows the state to directly contract with businesses up to $25,000.

While these goals have allowed for increased contracting with the groups identified, research shows there is more capacity to contract with these businesses. This is why we support the Department of Administration’s proposed policy to increase the preference to 12% and direct contracting amount to $100,000.

The legislative session is short. Minnesota’s problems are historic and systemic. We have to make the time count. We invite you to join us in partnership and collective action.

Let’s keep building!

For more information, read about our policy priorities.

Center’s Response to Governor Walz’s 2022-2023 Budget Proposal

(St. Paul, MN / Jan. 31, 2022) Minnesota Governor Walz’s two-year budget proposal announced, January 26, 2021, supports working families, ensures students catch up on learning, and helps small businesses stay afloat while driving economic recovery. We commend the Governor’s focus on racial equity and inclusive recovery. As he notes, “Not every Minnesotan was impacted by the COVID-19 pandemic equally. We know the COVID-19 pandemic hit our working families, small businesses, and students particularly hard. They need our help.”

The disproportionate impact of dual pandemics, coupled with decades of wealth extraction, undercapitalization and devaluation of Black, Indigenous, Latinx and Asian people and communities of color, requires proportionate solutions and investments.

·       BIPOC individuals comprise 23 percent of Metro areas labor force, yet constituted 36.6 percent of UI claims as of September 2020;

·       41 percent of Black-owned businesses—some 440,000 enterprises—have been shut down by COVID-19, compared to just 17 percent of white-owned businesses nationally; and

·       The state of Minnesota has the second biggest income inequality gap between Blacks and whites in the entire nation; only the District of Columbia is worse. This gap has remained stagnant for over 15 years.

The Center supports the Governor’s proposed investment in small businesses, including the following:

·       $3M per year in new supports for small businesses who have been hit especially hard by COVID-19, including Black, Indigenous and people of color (BIPOC) business owners;

·       $50M in a new Small Business COVID Support forgivable loan program, including set-aside supports for minority-owned businesses;

·       $7M in the Angel Tax Credit, which helps communities across the state create wealth by incentivizing investment in companies with founders that are women, veterans, minorities, and those headquartered in Greater Minnesota; and

·       $150m in appropriation bonds for rebuilding Minneapolis/St. Paul areas damaged in last June’s response to George Floyd’s death.

However, Minnesota must do more to create sustainable economic inclusion for BIPOC workers and business owners. More must be done to undo both the disproportionate impact of dual pandemics that include centuries of wealth extraction and long-standing wage inequities.

Modernization of the state’s Workforce Development Fund, and increasing the data-informed deployment of its funds is important. Yet, without clearly articulating goals, these funds from Minnesota’s employers are used to move Minnesotans into jobs paying family-sustaining wages, too many of our state’s residents will remain economically insecure and vulnerable. 

Minnesota has struggled with disparities in postsecondary attainment as well, in part due to a lack of adequate supports for students facing multiple barriers to success. The Center advocates for expanding emergency assistance for postsecondary students, tuition-free access to public or tribal college for workers impacted by COVID-19, and the establishment of a direct admissions process for Minnesota public high school students.

Lastly, the Center recommends the Governor and Legislature establish a racial equity impact note that can be used as a tool when evaluating at fiscal proposals. This provides a means of facilitating intentional focus on advancing racial equity and ensuring an inclusive economy best positioned for maximum growth.

The Center for Economic Inclusion is committed to partnering with Governor Walz, the House, and the Senate to not only pursue inclusive recovery, but also identify and implement racially responsive and effective policies and approaches that are responsive to the economic opportunity before us. This must include developing a tool for evaluating the racial responsiveness of fiscal proposals to accelerate racial equity and shared prosperity and economic growth for all Minnesotans.

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