Report Reveals Lack of Investment in Baltimore’s African-American Communities

Posted March 9, 2019
By the Annie E. Casey Foundation
A city block in Baltimore

Credit: Doug Kapustin for the Casey Foundation

In Bal­ti­more City, pre­dom­i­nant­ly white neigh­bor­hoods receive near­ly four times the invest­ment of those that are major­i­ty black, accord­ing to a new report from the Urban Insti­tute that was fund­ed by the Annie E. Casey Foun­da­tion. The organization’s find­ings fur­ther empha­size the strong con­nec­tion between race, place and oppor­tu­ni­ty that exists in the city.

The flow of invest­ment in a com­mu­ni­ty is a sign of its health and vital­i­ty, as it impacts the resources and ameni­ties avail­able to res­i­dents. Neigh­bor­hoods in Baltimore’s so-called black but­ter­fly” — a shape that emerges when map­ping the city’s large­ly African-Amer­i­can com­mu­ni­ties against whiter ones — receive the least invest­ment, accord­ing to the report.

The ori­gins of these dis­par­i­ties can be traced to cen­tu­ry-old poli­cies that sought to con­fine African-Amer­i­can res­i­dents to less desir­able neigh­bor­hoods, includ­ing racial hous­ing covenants and redlin­ing practices.

Racial divi­sions this stark are not inevitable,” say the report’s authors. They are still felt today in part because of the enor­mous effort that went into cir­cum­scrib­ing oppor­tu­ni­ty by race and geography.”

Zero­ing in on invest­ment, researchers found that the lega­cy of those dis­crim­i­na­to­ry poli­cies is evi­dent in numer­ous ways:

  • The aver­age vol­ume of loans per own­er-occu­pied hous­ing unit in pre­dom­i­nant­ly white ver­sus pre­dom­i­nant­ly black neigh­bor­hoods is $160,448 and $68,133, respec­tive­ly — a sign that whiter com­mu­ni­ties have much bet­ter access to cap­i­tal and that prop­er­ties there are assessed at high­er values.
  • Baltimore’s large­ly black com­mu­ni­ties see only $8,085 in com­mer­cial loans per house­hold. That num­ber is more than five times larg­er in whiter com­mu­ni­ties: $41,053 per house­hold. Sim­i­lar­ly, small-busi­ness lend­ing is only $2,336 per house­hold in African Amer­i­can neigh­bor­hoods, com­pared to $11,442 per house­hold in pre­dom­i­nate­ly white com­mu­ni­ties. Com­mer­cial and small-busi­ness lend­ing is a proxy for eco­nom­ic activ­i­ty and vibrancy.
  • Whiter Bal­ti­more neigh­bor­hoods also have more per­mits for build­ing and rehab­bing res­i­den­tial and com­mer­cial prop­er­ties, as well for demo­li­tions. Upgrades made to prop­er­ties of all types lead to high­er home-sale prices for peo­ple in most­ly white neigh­bor­hoods com­pared to large­ly black ones.

While pub­lic invest­ment and mis­sion lend­ing are spread much more equi­tably across the city, they rep­re­sent a frac­tion of over­all invest­ment. This indi­cates a need for a greater pub­lic and phil­an­thropic com­mit­ments to help spur invest­ment in Baltimore’s under­served com­mu­ni­ties, the report says.

All fam­i­lies, no mat­ter their back­ground or where they grow up, should have the oppor­tu­ni­ty to thrive,” says Tomi Hiers, vice pres­i­dent of the Casey Foundation’s Cen­ter for Civic Sites and Com­mu­ni­ty Change. These find­ings are inform­ing our invest­ments, and we hope oth­ers will use them, too, to ensure more equi­table com­mit­ments are made in Baltimore’s low-income neigh­bor­hoods and com­mu­ni­ties of color.”

Learn more about the Foundation’s strate­gies to fos­ter equi­table out­comes in Baltimore

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