Chicago: Violence & Wealth
The issues of violence and wealth disparities are deeply linked in Chicago. Several proposed mega-developments in the city suggest the possibility of revitalizing the overall city economy even while city leaders at the Civic Committee and elsewhere are working to expand Community Violence Interrupters (CVI) work knowing that in order for our city to flourish, violence must come down, while opportunity and prosperity must expand. For our city to flourish, we must pay attention to the racial wealth inequities, where they come from and what we can do about them.
As the recent study “Color of Wealth in Chicago” makes clear, the persistent disparity in Black wealth has deep roots in specific policy decisions that have systematically marginalized African Americans. Historically, policies like redlining and discriminatory lending practices created significant barriers to Black homeownership and wealth accumulation. For instance, the Federal Housing Administration's policies in the mid-20th century denied African Americans access to affordable mortgages, effectively segregating neighborhoods and denying Black families the opportunity to build equity through homeownership.
In Chicago, the legacy of these policies continues to manifest. The "Color of Wealth in Chicago" report highlights that the median net worth of White families is $210,000, compared to virtually no wealth for the typical Black family. This disparity is not merely a result of income differences but stems from a lack of access to wealth-building tools like affordable credit and homeownership opportunities. Payday lenders prey on this lack of access, offering high-interest loans that can trap individuals and families in cycles of debt.
To address these disparities, we must develop tangible, actionable strategies. First, creating alternatives to payday lenders is crucial. Community-based financial institutions can provide low-interest loans and financial education, helping individuals avoid predatory lenders. Programs that provide financial counseling with low interest loans have shown promising results.
Additionally, tools to actively build credit, such as credit-building loans and secured credit cards, can help individuals improve their credit scores, making them eligible for traditional financial products. Financial literacy programs can empower individuals with the knowledge to make informed decisions, but these programs are too often offered in a vacuum. Alternatively, when the financial literacy is attached to the desire to eliminate a financial crisis, start a small business, or become a homeowner, they have significantly higher take up rates and overall success.
Finally, promoting affordable homeownership is essential. Initiatives such as United Power’s Reclaiming Chicago offer down payment assistance and access to fair mortgages. Additionally, by focusing these efforts at a community level, they can build wealth and stabilize communities. supporting policies, organizations and tools that provide equitable access to home loans and real estate, we can help create pathways to generational wealth for in Chicago.
Addressing Black wealth disparity requires a multifaceted approach. By implementing strategies that provide alternatives to payday lenders, build credit, and promote homeownership, Chicago can take meaningful steps toward economic equity and empowerment.
We are in the debt of the Chicago Community Trust, the Kresge Foundation, the Polk Bros Foundation, the JPM Chase Foundation for supporting the Institute on Race, Power and Political Economy for the funding and production of this study.
