Report: Investment in Baltimore Uneven by Race

Posted August 6, 2020
By the Annie E. Casey Foundation
East Baltimore

Invest­ment in Bal­ti­more is high­ly con­cen­trat­ed in ways that rein­force his­toric racial and eco­nom­ic inequal­i­ty, accord­ing to a new report from the Urban Insti­tute fund­ed by the Annie E. Casey Foun­da­tion. How­ev­er, one major com­mu­ni­ty devel­op­ment project has boost­ed cap­i­tal flow­ing into one large­ly Black com­mu­ni­ty in the city’s east side, accord­ing to the analysis.

Neigh­bor­hood Invest­ment Flows Into Bal­ti­more com­pares pri­vate, pub­lic and phil­an­thropic dol­lars flow­ing into the city’s neigh­bor­hoods from 20042016, find­ing that pre­dom­i­nant­ly Black com­mu­ni­ties receive far less invest­ment than neigh­bor­hoods that are large­ly white.

The find­ings are sim­i­lar to those released in a 2019 Urban Insti­tute report, The Black But­ter­fly, which ana­lyzed city invest­ment data over five years. Both reports note that Baltimore’s dis­par­i­ties in invest­ment can be traced to cen­tu­ry-old poli­cies that con­fined Black res­i­dents to less desir­able neigh­bor­hoods, includ­ing racial hous­ing covenants and redlin­ing practices.

With less access to cap­i­tal, Baltimore’s Black res­i­dents are sti­fled in their abil­i­ties to become entre­pre­neurs and home­own­ers, which lim­its their oppor­tu­ni­ties to build wealth and assets,” says Kim­ber­ly Spring, direc­tor of research and eval­u­a­tion at the Casey Foun­da­tion. This sit­u­a­tion acts to rein­force racial seg­re­ga­tion and inequal­i­ty and affects the resources and ameni­ties avail­able to Black communities.”

From 20042016, house­holds in neigh­bor­hoods where res­i­dents are pre­dom­i­nant­ly white received, on aver­age, three times more invest­ment per year than those in com­mu­ni­ties that were more than 85 per­cent Black — or $26,500 per house­hold com­pared to $8,160, accord­ing to the report.

Bro­ken down over that same peri­od, per house­hold, major­i­ty white neigh­bor­hoods received each year:

  • sev­en times more in small busi­ness loans than did large­ly Black communities;
  • four times more in com­mer­cial real-estate loans;
  • three times more invest­ment in con­struc­tion, demo­li­tion and prop­er­ty reha­bil­i­ta­tion; and
  • two times the amount for loans for mul­ti­fam­i­ly hous­es and three times as much for sin­gle-fam­i­ly homes.

Though pub­lic spend­ing and mis­sion-dri­ven lend­ing are spread much more equi­tably across the city, they rep­re­sent just a frac­tion of over­all invest­ment — indi­cat­ing a need for greater gov­ern­ment and phil­an­thropic com­mit­ments to help spur larg­er flows of cap­i­tal into Black com­mu­ni­ties, the report says.

We hope that lead­ers in Baltimore’s pri­vate, pub­lic and phil­an­thropic sec­tors take these find­ings seri­ous­ly,” says Tal­ib Horne, direc­tor of Casey’s Bal­ti­more Civic Site. Greater com­mit­ments are need­ed from each sec­tor to ensure that equi­table invest­ment can be achieved.”

Horne adds: The cur­rent pub­lic health cri­sis and the eco­nom­ic hard­ships it’s pro­duced only make this a more urgent priority.”

East Bal­ti­more project boosts investment

The report also breaks down invest­ment relat­ed to the East Bal­ti­more Devel­op­ment Ini­tia­tive. The ongo­ing project, which Casey sup­ports, launched in the ear­ly 2000s and was meant to trans­form a dis­tressed, large­ly Black area north of the Johns Hop­kins Med­ical Cam­pus into a vibrant, mixed-income com­mu­ni­ty with safe, afford­able hous­ing, job oppor­tu­ni­ties and oth­er amenities. 

The 88-acre project area has received more than $1 bil­lion in over­all invest­ment from mul­ti­ple sources and for var­i­ous pur­pos­es, the report notes. Among oth­er things, that includes:

  • $385 mil­lion for the devel­op­ment of health, research and aca­d­e­m­ic facil­i­ties, such as lab space for the Mary­land Depart­ment of Health and a 278,000-square-foot life sci­ences research build­ing affil­i­at­ed with the Johns Hop­kins Med­ical Campus;
  • $121 mil­lion in infra­struc­ture, park­ing and pub­lic spaces and parks, includ­ing Eager Park, a 5.5‑acre, three-block-long green space with a pavil­ion, amphithe­ater and playground; 
  • $81 mil­lion for sin­gle-fam­i­ly hous­es and rental units, with approx­i­mate­ly two-thirds being afford­able hous­ing and the remain­ing mar­ket-rate; and
  • $57 mil­lion for Hen­der­son-Hop­kins, a new K–8 com­mu­ni­ty school and its ear­ly child­hood edu­ca­tion center.

Because of the new devel­op­ment, the area has seen far more invest­ment than oth­er city com­mu­ni­ties in con­struc­tion, reha­bil­i­ta­tion and demo­li­tion activ­i­ties, as well as com­mer­cial real-estate lend­ing, pub­lic sec­tor invest­ment and mis­sion-dri­ven loans. Still, the report notes that lend­ing for small busi­ness­es and sin­gle-fam­i­ly homes lags behind oth­er areas of the city — a sign that larg­er invest­ments have yet to pro­duce wider eco­nom­ic oppor­tu­ni­ties to sus­tain a mixed-income community.

The East Bal­ti­more Devel­op­ment Ini­tia­tive has had many bright spots and we hope that fur­ther oppor­tu­ni­ties are pre­sent­ed to give com­mu­ni­ty res­i­dents in and around the project area the abil­i­ty to thrive and build fam­i­ly and com­mu­ni­ty wealth,” says Thomasi­na Hiers, vice pres­i­dent of Casey’s Cen­ter for Civic Sites and Com­mu­ni­ty Change. Through this project, we’ve learned much about the com­plex­i­ties involved in spurring large-scale, placed-based com­mu­ni­ty change — and we believe pol­i­cy­mak­ers, pri­vate investors and phil­an­thropic fun­ders across the nation can also learn from the initiative’s history.” 

Learn more about invest­ments relat­ed to the East Bal­ti­more Revi­tal­iza­tion Initiative

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