Wealth is more than just assets. It’s opportunity. It’s equitable access to traditional financial banking and credit. It’s education. It’s fair housing practices. The panelists for our Wealth Gap Roundtable have spent their life’s work trying to help solve for and bridge the wealth gap in America. We’re thrilled to have these three panelists in conversation:
Monique King-Viehland, Associate Vice President, Metropolitan Housing and Communities Policy Center at the Urban Institute, where she leads work on racial equity and housing justice.
Lisa Mensah, President and CEO at Opportunity Finance Network, one of the nation’s leading networks of Community Development Financial Institutions.
Here, the three discuss how the wealth gap is present in their work, potential solutions, and some positive changes they have witnessed.
King-Viehland: In the recovery that followed the great recession, we became increasingly alarmed to see the Black homeownership continue to decline and not rebound—falling more than five percentage points. So in 2018, the Black white homeownership gap reached 30.5 percentage points nationwide, its highest level in 50 years.
So if you think about it, that means that today the Black white homeownership gap is larger than it was when the Fair Housing Act was passed in 1968. The median white household holds eight times the wealth of the typical Black family and five times the wealth of the typical Latino family. These homeownership gaps contribute to greater instability and insecurity for households of color. Which means that we are less able to pass on wealth to future generations today; and we are more vulnerable to shock events and less able to recover from catastrophe.
Mensah: The work of CDFIs is really fundamental about closing those gaps. We are the hands and feet at work—we exist to help close those gaps. CDFIs fight wealth gaps at both the household level and the community level, lending money and bringing their expertise to some of the poorest communities in this country.
Part of this fight for the wealth divide is what do we own? What properties do we own and what advances communities? I love to think of CDFIs as really in the business to fight against these cavernous gaps that have held too many Americans back. And we do it with these boring tools: lending and assistance.
We’re really all about closing gaps, getting people moving forward, and moving people up the ladder.
Tubbs: My work sits at the intersection of policy and narrative. On the policy front, understanding that this racial wealth gap isn’t an act of God—it didn’t just happen. It’s not about people’s effort or ability, but literal government policies and laws—starting with land theft and 42 years of human trafficking—that have created the outcomes we see.
On the narrative side, part of the wealth gap is really telling that story. What is so intoxicating about our country is that we sell the story of opportunity that’s more real in theory than actuality. And because of that story, people think “well, wow, the racial wealth gap is because Black people are lazy, or because Latino people aren’t as smart, because women don’t want to work.”
I view my role in government to show it’s not just up to think tanks. It’s not just up to non-government institutions. Government has the tools—and the responsibility to, at the very least, rectify the harms it has caused. When we talk about redlining or who has been left out of entitlement programs like the GI Bill, the New Deal. It’s documented; there are literal policy reasons for these outcomes.
I’m trying to push government leaders to see that as our responsibility to not just depend on our good friends in the think tank and the lending space, but it is on us as government actors to create the regulatory framework to make their work go further. And also to make the public aware that this is not just a problem, but a problem worth solving.
King-Viehland: I’m not even sure that people necessarily connect the dots as much as they should. Michael’s point about when you don’t connect the dots, people see this as an individualized issue. It’s a Black person’s issue. It’s a Latino family’s issue. The fact is, racial disparities in homeownership and housing wealth are a result of current economic and demographic differences that are a byproduct of past discriminatory housing policies and deliberate actions by multiple market players, including then the federal government.
The era of explicit discrimination in the housing market, implicit discrimination that continued even after the passage of the Fair Housing Act, the tight credit market we see today that makes it hard for families of color to access mortgage markets, and the lack of affordable housing makes it harder for families of color to buy homes and build wealth. It’s important to ground ourselves in the understanding of how we got here, because it’s important to understand and frame the barriers as systemic issues rather than individualized issues. That’s part of the narrative too, because I don’t think that people always connect the dots. This is not a new phenomenon. It’s an outgrowth of previous actions and systemic issues.
Mensah: You inspire me to think about people grappling with this as a problem. I’ve been fortunate to work in a lot of rural areas. And what I find interesting is that there’s a shorter distance to the “we have to do something here” challenge in these rural communities.
It’s more obvious when people are writing your communities off as unsolvable. The very parts of the country where we see deep and persistent poverty, I found some great receptivity to actually fixing stuff. Because it’s so obvious, everybody’s hurt. If you don’t have high speed broadband, everybody’s hurt. If you haven’t built any new housing, everybody’s hurt. You really have had so much job loss from traditional industries.
I’ve seen some glimmers of hope from some of our rural areas; where we don’t always expect to see an embrace of a narrative of wealth divides. But it makes sense to people that we’ve held ourselves back, this fact of not investing deeper in the economy isn’t getting anybody any further. When people do love home, do love their communities, and may want to be near grandparents—there is some receptivity to fixing this old wealth gap.
We are not very good historians as Americans. But I have seen some interest in this narrative of “let’s do something before it goes down badly for all of us.”
Tubbs: To your point, Lisa, that has to be the narrative. This narrative of reciprocity and mutual neutrality. The fact that we have such persistent gaps makes us all less safe, makes us all less wealthy. I totally agree with that point that in terms of how do we get the rest of the country to be like the rural communities you’ve seen this work in? Particularly when we look at the fact that in 30 years, the majority of people in this country will be people on the adverse end of a racial wealth gap.
Part of the guaranteed income program we implemented when I was mayor stemmed from understanding that in municipal governments, every problem we talked about was really a poverty issue. We would have conversations about violence or conversations about homelessness and housing insecurity. We would have conversations about educational attainment. At the root of it all was certain neighborhoods were high in poverty and low in opportunity.
As a mayor you control land use and policing—and that’s really about it that makes a difference on these structural issues. So we said, let’s at least have a conversation about how we might solve for poverty. We saw that even a little bit of cash could unlock people’s ability to do. To provide. To pay for childcare, so they could go to work. To pay for transportation. And also, in doing that work, it more clearly elucidated the difference between income and wealth.
A basic income or guaranteed income is a good first step. But that can’t be the end-all be-all. Income and wealth are very different things. I think income is a first step into a broader conversation about wealth and assets.You don’t want to be on a guaranteed income and then have your kids be on guaranteed income, that’s not success right? People need the income, people need the floor; but we need to make sure the conversation doesn’t stop there.
That’s why so much of my work now is guaranteed income and. Guaranteed income and baby bonds. Guaranteed income and home ownership. Everyone deserves the basics. I don’t think anyone wants just the basics; I think people are entitled to more and that we have the tools and resources to at least get folks on the pipeline to that.
Mensah: You mentioned regulation and the narrative that government can’t move. What we’ve seen in this pandemic is the other leg of the stool the government can move, which is big dollars and our own Marshall Plans. And we started to see that. Government finally moved $3 billion to loan funds, $1.75 billion of that designated to come soon in a minority lending program. These were equity grants, serious equity capital in our banking sector.
This is what we’ve been missing: a sense that we’re going to treat seriously, with our public purse, the gaping needs for wealth we have. We have institutions like mine that have been around for 40 years, trying to help people crawl out of the gap. We haven’t had serious partners from either the private or public sector to really come with dollars beyond the pilot programs. All of this became more real and we didn’t sound too crazy when we were saying this a big job here, and it needs more serious sustained investments of public and private dollars.
King-Viehland: You don’t sound crazy to me, Lisa! I want to go back to Michael talking about “the and.” For me, it’s homeownership and. There are other ways outside of homeownership to think about wealth building. And I say that because it concerns me when I look at the numbers. Housing equity makes up nearly 60% of the total net worth for Black homeowners compared with 43% of total net worth for white homeowners. So simply put, homeownership is playing a bigger role for creating wealth for Black families than it does for white families. And yet Black and Hispanic homeowners often own lower valued homes and have less equity relative to white homeowners because of things like appraisal bias.
So I want us thinking about not always putting our eggs into one basket. I want us thinking about baby bonds, I want us thinking about investments, I want us thinking about wealth building and closing the wealth gap as a larger strategy. That, of course, includes homeownership, which is so critical—housing equity is still a critical component to wealth building in this country. But I hope we’re taking the homeownership and approach. Because things like appraisal bias, which I just experienced personally for myself, is really, really frustrating. I want to be thinking about wealth as bigger than this house that we call home.
Tubbs: I love it. Drop the mic.
For all the craziness happening in the world today, I do think a lot of stuff that the Biden-Harris administration has begun to do, particularly around the appraisal bias you mentioned Monique, is good. It seems like they’re really looking at HUD being about wealth building and really addressing the systemic factors from appraisal bias. So that’s the first step.
But of course, I am very bullish on baby bonds, because it really is a tool that is universal. But even in its targeting universalism it can significantly reduce the racial wealth gap in one generation. I just don’t get why everyone’s not super excited about that.
It’s also been interesting listening to the conversation happening in this country around reparations, because a lot of the ideas that come out of these reparation commissions are things that seem more focused on the wealth gap. I’ve been really thinking about down payment assistance. Focus on people who, for a variety of reasons, have had homes devalued or have been redlined. We don’t want housing to be the only driver of wealth, but it is a driver of wealth—how do we make sure people have access to that one lever driving wealth?
Mensah: Many minority Americans are overweighted in housing assets, if they’re lucky enough to have any of that equity. But no one’s walking away from that. So it has to be on our menu. I love Monique’s point that we can’t over emphasize only homeownership. But many CDFIs, if they were equipped, could reach deep into those communities and help more people get on this ladder.
I think what’s always been powerful about the baby bonds is it speaks to the other side of wealth: retirement wealth and long term wealth. It speaks to the ease of building wealth without thinking about it. It isn’t that you have to wake up every day and think “where’s my dollar go?” We need more “set it and forget it.” The type of contributions that could come in every year from the tax code without you having to think about it. That’s the way a lot of wealth is built. It’s automatic, it’s simplified, and it’s also in the financial sector’s interest to build those accounts—because the more people that are in it, that’s a benefit to the wealth industry.
Which is why I love the side of baby bonds that talks about permanent and easy on ramps into real financial markets, democratizing participation.
King-Viehland: Michael mentioned PAVE (HUD’s Interagency Task Force on Property Appraisal and Valuation Equity). They just released a comprehensive action plan that for me feels like a major step towards identifying some actual concrete measures that can ensure that appraisal processes are more fair, more transparent, and more reliable. I think it has the potential to be transformational.
And I will tell you one thing that gave me hope. HUD Secretary Marcia Fudge during remarks that she gave at the National Low Income Housing Coalition Policy Forum, I wrote down the quote, because I wanted to share it with you all. She said, “If we are to fully achieve justice in housing, we must fully accept what that means, justice in housing is everyone realizing the fundamental truth—housing is a human right.”
Until that moment, no sitting HUD Secretary had ever said such a thing. As someone who has been in this work for more than two decades, I don’t even have adequate words to explain how powerful that was to be on that virtual call and hear her say that “housing is a human right.” It’s giving me hope as someone who’s been in this work for far too long. It’s giving me hope as a Black woman who faced housing instability challenges as a child. And it’s giving me hope as a mother of two children—real hope. That’s what I want to leave you with today.
Mensah: This conversation gives me hope. But I think that watching George Floyd murdered in front of our eyes and watching too many zoom funerals during the pandemic, particularly in minority communities, was just a deep, low point for me explaining to my African American kids what their role could be in a time of deep racism and deep inequity. It’s really tough as a mother and as a person who does this work professionally.
But I’m very hopeful for the scale of the solutions that I think we began to see. Of course, we’ve got private sector commitments; they’re not all going to be sustained and they may not all come to fruition, but they gave us an opening to go talk to some of the most successful companies in the world. When both sides of the aisle came together for Cares Act funding and got serious about closing gaps—we waited decades for this. So in a moment of deep pain and hopelessness, I saw some action. I saw the conversation change. And I saw the solution makers that I respect in community development financial institutions come to the front—and leaders embrace us at the highest levels.
Tubbs: From where I sit being pessimistic would be such a luxury. I’ve been very privileged and blessed myself. So it would be easy to say all is hopeless—because I know my kids are going to eat tonight, regardless of if I feel hopeful or not. But I think for the people I serve and the people that motivate the work that we do, the fact that they wake up every single day, thinking, “it’s going to be a little bit better, if not for me, than for my children.” That gives me so much hope because it is so inspiring and moving for me when folks who have faced housing discrimination, who are facing housing insecurity, who are living paycheck-to-paycheck working two jobs are still hopeful that things could get better—and are counting on folks in power to do it. Their faith is what makes me the most hopeful.
This conversation has been edited and condensed for clarity.