Panel explores Minnesota’s glaring racial inequities

February 22, 2023 | By Abdi Mohamed

Clearing the hurdles to achieving Black wealth

The racial disparities between Minnesota’s Black and White residents have been widely reported and discussed, especially in recent years following the murder of George Floyd and the civil unrest that followed in the wake of his death. Homeownership, education, employment and health outcomes are just a few areas in which Black Minnesotans experience large disparities compared to their White counterparts. 

While many organizations and government agencies have highlighted the disenfranchisement of Black Minnesotans and put forth solutions to tackle the systemic racism that contributes to the disparities, many of these conversations have occurred in silos. 

In recognition of the interconnected role community organizations and elected officials have in providing a solution, U.S. Senator Tina Smith (D-MN) facilitated a panel on “Building Black Wealth” with local Black leaders in the banking, education, and community organizing sectors serving the Twin Cities and greater Minnesota. 

The panel discussion took place on February 10 at Metro State University. Among the panel participants were Northside Economic Opportunity Network (NEON) President Warren McLean; Vice Chancellor of Equity and Inclusion for Minnesota State Colleges and Universities Andriel Dees; Senior Vice President of First Independence Bank Damon Jenkins; Managing Director of Minnesota Business Coalition for Racial Equity (MBCRE) Tiffani Daniels; and African American Leadership Forum (AALF) CEO Adair Mosley. 

Senator Smith’s office released a press advisory ahead of the panel highlighting some of the challenges that Minnesota’s Black community is facing broadly. Only 25 percent of Black households in Minnesota own their home compared to 76 percent of White households. 

She co-sponsored the “Fair Access to Financial Services Act,” the “Choice in Affordable Housing Act,” and has led a bill to support Community Development Financial Institutions (CDFIs) to address gaps in economic opportunity. Additionally, she made recommendations to ensure systemic exclusion of communities of color is addressed through enhanced data collection and other measures in updating regulations in the Community Reinvestment Act. 

In her opening remarks, Senator Smith referred to the Urban Institute’s report that the Twin Cities has the worst Black-White homeownership gap in the country, which peaked in the 1950s. (See “Jim Crow of the North” article in Metro on pg. 2.) 

Currently, large real estate investors and associations have blocked access to affordable homes for many, but they have a long history of blocking members of the Black community. Just last year, Twin Cities real estate agents apologized for furthering the gap in homeownership between Black and White Minnesotans. 

Much of the panel’s discussions revolved around the issues of housing, job opportunities, transportation, and access to financial resources. Since many of these are deeply rooted issues caused by systemic racism, panelists called for structural solutions. 

Mosley suggested that the government could serve as a conduit for change as community organizations help channel those resources directly to the people in need. He pointed to organizations like NEON as an example of community resources that are able to uplift entrepreneurs to scale their businesses. 

“The unit of change is the neighborhood,” Mosley said. “We need those financial levers as well. We need the capital. We need to remove the structural barriers that exist in terms of accessing capital, particularly for Black entrepreneurs.”

Recent reports of business closures in North Minneapolis underlined the panel’s discussion of disenfranchisement as both Aldi and Walgreens have exited the North Side. This would now make Cub Foods the only location to provide both groceries and pharmacy needs in North Minneapolis. The panel pointed to this recent development as an example of how the disenfranchisement of the Black community has been an ongoing issue.  

“This disinvestment in Black communities is not just historic, it’s current. It’s still happening,” Senator Smith said.  

Daniels of Minnesota Business Coalition for Racial Equity MBCRE spoke about the relationship small business owners and entrepreneurs can have with larger businesses that would create a sustainable ecosystem. 

“There are a set of tall hurdles to clear for a business to be able to qualify to serve as a supplier for some of our large enterprises here,” she said. “A lot of times Black-owned businesses do not meet those hurdles, and so we need to talk about what’s in the way.”

McLean, whose work at NEON directly supports the development of Northside business owners, has seen what the recent closures of businesses has done to residents of the area, but said that with the right investment more businesses would be drawn to the area. 

“I think one of the things that we need to start with is investing in the Black community, investing in the indigenous [local] people there,” he said. “We keep going outside. And I think that even though Aldi and Walgreens are leaving, right down the block Satori Village is being built. 

“It’s a $60 million market-rate housing. When those people come in, they’re going to need a place to shop. Someone’s going to move in and take advantage of that opportunity.”

Following the panel, Senator Smith took questions from the press about her work in Washington aimed at providing avenues for the Black community to attain access to financial resources and eventually accumulate wealth. 

“I’ve been quite focused on the work we need to do to expand access to credit and to capital,” she said. “A few things that I’m working on in Washington are really informed by these community leaders and others in Minnesota, but also what I see is being successful in communities around the country.”

Among those things is how individuals at the grassroots level can leverage community development financial institutions. According to Senator Smith, it’s a strong strategy that must be expanded. 

Jenkins, senior vice president of the First Independence Bank, shared this point during the panel, stating that some of the barriers to accessing financing had to be reshaped to best serve communities that have historically been blocked from these resources. 

“As we think about the systemic inequalities that plague communities of color, we know it’s very intentional, and so we have to be just that intentional in changing it,” Jenkins said. 

Another area of Black wealth creation that Senator Smith is looking to highlight in Congress is housing and making it easier for Americans to enter the housing market. AALF’s Adair spoke about a crisis of big institutional investors buying up homes. 

“Not only are they not taking care of those homes, but they’re really pushing them out of the homeownership market,” Smith said. “There’s some good takeaways to go about that around the country, and I want to bring that back to Minnesota and also make sure that we’re holding these big institutional investors accountable.” 

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