The Concept of Shared Prosperity

By Leslie Smith, BLDG Memphis

In April 2019, the publication The Atlantic and the collaboration The Shared Prosperity Partnership gathered local policymakers and community leaders at the Civil Rights Museum in Memphis to discuss how the legacy of structural racism has affected cities across the country. Together, these groups exchanged views on how public policy can help foster more inclusive growth, and they took a look at those who are currently pushing for change.

See article Notes below to read about and view the entire April panel event.

The Shared Prosperity Partnership – a collaboration of The Kresge Foundation, the Brookings Metropolitan Policy Program, the Urban Institute and Living Cities – uses public forums and open discussions to spark dialogue among local leaders in communities across the United States. In Memphis, this conversation was designed to help leaders feel more equipped and informed on best practices for fighting poverty. During this discussion, Shared Prosperity openly challenged local community and economic development leaders to approach the topics of race, equity and equality and discover ways to address these areas of concern.

Addressing the racial gap

America is facing an affordable housing issue and has been doing so for quite some time. Policy makers tend to tout homeownership as being the best vehicle for low- or moderate-income (LMI) families and people of color to build wealth. While this is true, the reality is, barriers for LMI families to successfully obtain homeownership are high. 

“Half a century ago, the truth of de jure segregation was well known, but since then we have suppressed our historical memory…”

~Richard Rothstein

Unfortunately, racial inequality and segregation in America are not issues of the past; they continue to affect entire metropolitan areas. Richard Rothstein, a senior fellow at the Haas Institute at University of California, Berkeley, creates a historically-compelling case in his novel titled, “The Color of Law: The Forgotten History of Segregated America,” which sheds light on the role racism has had on minorities for generations, especially for African Americans.  

Richard Rothstein’s “The Color of Law.” For more from this book, see notes at the end of this article.

From the infamous practices of redlining to the normalized societal standards of structural racism, Rothstein accentuates the wrongdoings and intentionality behind government-sponsored segregation and private discrimination.

“Half a century ago, the truth of de jure segregation was well known, but since then we have suppressed our historical memory…” Not only does he remind the readers of the “forgotten history,” which inhibited many minorities from accessing housing and capital, but he illustrates how the callous actions of the past contribute to the current burden inherited by many minorities today.

Rothstein expresses that America took its time to begin addressing the issues of racism, “By the time labor market discrimination abated sufficiently for substantial numbers of African Americans to reach for the middle class, homes outside urban black neighborhoods had mostly become unaffordable for working- and lower-middle-class families.”

While some legislators are currently looking to push legislation to make housing more affordable like the American Housing and Economic Mobility Act, others have and are currently attempting to hold onto the integrity of fair and affordable housing protections for all.

Consider legislation like the Restoring Fair Housing Protections Eliminated by HUD Act of 2018Landlord Accountability Act of 2019 and the Housing Fairness Act of 2019, to name a few.

Advocates have begun to examine the role ever-evolving technology has played in irresponsible practices of disseminating information to consumers based on race. However, problems in this space can be difficult to detect, as data sets and algorithms used are often proprietary. If these systems rely on data that reflects historic biases deeply embedded in our society, the systems themselves may discriminate.

Alan Mallach describes in his book, “Divided City,” how many cities have reinvented their design in response to capitalism-based trends.

Alan Mallach’s “The Divided City.” Read an excerpt at the end of this article.

Throughout his book, he follows history and builds up to modern day trends – from educational institutions, the healthcare industry and the chase for attracting millennials. As we consider the affordable housing issues looming over America, the cost of development rises, and property values drive up the cost of living. Once millennials are attracted to the growing cities, where does this first-time homebuyer live? 

The National Community Reinvestment Coalition (NCRC) is working with advocates across the nation to raise awareness of the importance of improving access to affordable homeownership. NCRC states, “As a wave of millennials reach the median first-time homebuyer age of 30, they are confronted with a critical shortage nationwide in the number of homes for sale, forcing many to become “involuntary renters” and delaying their ability to build wealth and community in homes of their own.” 

The Memphis Analysis

The racial gap to obtaining and maintaining wealth continues to be an issue for minorities not only across the country, but also right here in our city. Andre Perry, one of the panelists who spoke during the Shared Prosperity event, referenced one of the latest reports published through the Metropolitan Policy Program at Brookings titled, “The Devaluation of Assets in Black Neighborhoods.” The report offers comparable home values among black and white neighborhoods. While Memphis did not make it into the top 10 list of cities with the largest difference in home values, data showed that there is still room for improvement in our city.  

This year, the City of Memphis and Shelby County published an Analysis of Impediment for Fair Housing Choice. The report covers the following points in detail:

  • Increased chances for displacement, especially for residents who are disabled.
  • Low availability of affordable units in a range of sizes.
  • Lack of private investments in specific neighborhoods.
  • Low access to opportunities.
  • Unfavorable school quality.
  • Segregation persists. Contributing factors: Accessing capital for loans or subprime lending.
  • Minorities have trouble accessing jobs – even when they live in close proximity – due to skills and/or education mismatch.
  • Land use regulations and zoning ordinances affect the siting and types of houses.

How we can take action

With open discussions on the economic issues that continue to plague Memphis and cities across the country, we can work together to put policy in place that advocates for those who are underrepresented. 

We can urge regulators to release better information about community lending and investing.

This will help both lenders and proponents better understand what qualifies for Community Reinvestment Act (CRA) credit and where CRA investments are occurring. Banking institutions are still failing to identify how the level of their investments in local communities actually brings about change. It’s our responsibility to promote efforts for fair and transparent lending practices and hold lending institutions accountable. Modernization of policy will help these establishments take more responsibility for providing fair access to financial services, helping to meet the credit needs of entire communities.

We can urge legislators and local elected officials to address the affordable housing demands in Memphis.

This can be done by increasing funding to support home preservation (aging in place and modifications for senior/disabled persons) and home-building efforts. Hold landlords accountable for providing energy efficient housing that is universally-designed to accommodate all people. Provide funding to support increased development of multi-family housing that caters to multiple levels of income. Build the capacity of housing counselors to counter the demand of housing resources.

With more open discussions, and more action, we can do it.

Leslie Smith is the BLDG Memphis Advocacy & Engagement Program Manager

Notes —

Feature image from the Building Opportunity For All panel April 23, 2019. The entire panel discussion at the National Civil Rights Museum, Building Opportunity for All, can be viewed here.

From Alan Mallach’s “The Divided City”:

To be poor in an American city is to live a life of almost constant instability and uncertainty. Job insecurity, unreliable transportation and child care, unpredictable health costs, and, as Matthew Desmond has brilliantly depicted in his book Evicted, rents that vastly exceed what they can afford even for poor- quality housing, all play their part.

“The majority of poor families in Amer- ica spend over half their income on housing,” Desmond writes, “and at least one in four dedicates over 70 percent to paying the rent and keeping the lights on. Millions of Americans are evicted each year because they can’t make rent. In Milwaukee, a city of fewer than 105,000 renter households, landlords evict roughly 16,000 adults and children each year.” Those numbers don’t even take into account the thousands of “informal evictions,” foreclosures, condemnations, as well as only nominally voluntary moves one step ahead of the landlord or the housing inspector. Not surprisingly, in these cities the average length a renter stays in the same place is barely two years.

~Alan Mallach, The Divided City

More on Rothstein’s “The Color of Law”

The term “redlining” … comes from the development by the New Deal, by the federal government of maps of every metropolitan area in the country. And those maps were color-coded by first the Home Owners Loan Corp. and then the Federal Housing Administration and then adopted by the Veterans Administration, and these color codes were designed to indicate where it was safe to insure mortgages. And anywhere where African-Americans lived, anywhere where African-Americans lived nearby were colored red to indicate to appraisers that these neighborhoods were too risky to insure mortgages

. . .

It was in something called the Underwriting Manual of the Federal Housing Administration, which said that “incompatible racial groups should not be permitted to live in the same communities.” Meaning that loans to African-Americans could not be insured.

The Underwriting Manual of the Federal Housing Administration recommended that highways be a good way to separate African-American from white neighborhoods. So this was not a matter of law, it was a matter of government regulation, but it also wasn’t hidden, so it can’t be claimed that this was some kind of “de facto” situation. Regulations that are written in law and published … in the Underwriting Manual are as much a de jure unconstitutional expression of government policy as something written in law.

~Richard Rothstein, The Color of Law

For more, listen to Mr. Rothstein’s interview with Terry Gross on NPR’s Fresh Air.

Sharing is caring!

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.