By Robert J. Hansen | OBSERVER Staff Writer
Sacramento took a giant step towards addressing historic discrimination aimed at Black residents when city officials last week revealed a comprehensive blueprint that provides programs and policies aimed at reducing the Black wealth gap.
Community Engagement Manager Lynette Hall said the blueprint is not merely a plan, but a promise and commitment to repair systemic and intentional harm that has kept Black people from employment and homeownership in Sacramento.
“We focused on the things that ensure generational wealth because Black residents deserve a piece of the American dream too,” Hall told a crowd of about 100 people at the Black owned Our Place Events Space and Kitchen in Old Sacramento.
The city in 2023 received a grant from the Cities for Financial Empowerment Fund through the CityStart Initiative to address the Black wealth gap. While recognizing broader historical injustices affecting various underserved communities, this project focuses specifically on the Black community due to the funding’s scope.
Hall said Sacramento is the first among the cohort of cities that partnered with the Cities for Financial Empowerment Fund to specifically focus on empowering Black residents.
In partnership with local stakeholders, the city identified three priority areas – housing, banking access, and workforce development – for targeted programs and strategies aimed at reducing the wealth gap.
The proposed blueprint outlines potential initiatives for both the city and local partners to implement. However, these strategies have not yet undergone legal review and may include programs subject to legal challenges. Future implementation will ensure legal compliance.
Mayor Kevin McCarty said Sacramento will not continue to thrive unless all its residents can access and create wealth. “We must address the effects of past discrimination, dismantle personal and institutional discrimination, and identify other avenues of wealth creation for Black residents,” McCarty said.
He added that the blueprint is just a starting point for addressing the Black wealth gap and that closing the gap requires a broad range of innovative and ambitious initiatives and long-term policy solutions.
For generations, Black Americans were denied access to opportunities to build wealth, leading to the nation’s wealth inequality.
Nationally, Black household median wealth is $44,000 while white households have $200,000 more. The gap in mean wealth – $ 1.15 million – is even higher.
Federal policies such as the Servicemen’s Readjustment Act of 1944, otherwise known as the GI Bill, created an explosion of white wealth and suburbanization while locking Black families out of the biggest wealth-building opportunity in American history.
But historical policies and practices compounded the Black wealth gap locally, too. The construction of freeways through predominantly Black neighborhoods during the 1950s and 1960s mirrored a national pattern of infrastructure development that disproportionately displaced communities of color, which resulted in the destruction of thousands of homes and businesses in Sacramento’s Black neighborhoods and the loss of generational wealth to property destruction.
In 2012, Wells Fargo agreed to a $175 million settlement with the U.S. Department of Justice after being accused of discriminatory lending practices in several cities, including Sacramento. The complaint alleged Wells Fargo exacerbated foreclosures in Black and Latino neighborhoods, lowered property values, and destabilized communities, which contributed to the modern racial wealth gap.
Assistant City Manager Michael Jasso, who also serves as the city’s director of innovation and economic development, said state laws such as Proposition 209, which set property tax rates, and federal regulations make it difficult to address racial economic inequality without legal challenges.
Despite that, Jasso is committed to the work that the city and its partners aim to achieve.
“We cannot continue to ignore these deep inequities. The prosperity of our city is directly tied to the prosperity of all its residents,” Jasso said. “We must dismantle the barriers that have historically kept Black residents from accessing wealth and create new pathways to financial empowerment and generational wealth.”
Leaders in banking, workforce development and housing development are encouraged to work with the city in achieving the goal of closing the Black wealth gap.
“Let me be clear: the Black wealth gap didn’t happen by mistake, so it won’t be fixed by chance,” Hall said.