Research Suggests Tactics to Leverage Private and Philanthropic Racial Equity Commitments for Community Development Finance

Date Published: 
January 12th, 2022

Urban Institute (UI) recently reported that between June 2020 and May 2021, the private and philanthropic sectors have made at least $215 billion in racial equity commitments, with likely more than half going to community development activities and investments. According to the research, the types of organizations and interventions that were targeted for racial equity commitments were wide-ranging and reflect a broad view of priorities, including increased investments in strategies that expand housing affordability and accessibility, support for minority depository institutions (MDIs), community development financial institutions (CDFIs), and investments in businesses owned by people of color. UI highlights 11 solutions that can strengthen the effectiveness of these new community development finance investments:

  • Provide more equity and grants.
  • Lending capital should be low-cost and patient.
  • Build, strengthen, and modernize institutional infrastructure.
  • Strengthen resources for disinvested communities and preservation activity without raising the risk of displacement.
  • Build ownership.
  • Prioritize community voices.
  • Maximize opportunities through the housing finance system’s secondary markets.
  • Create a new, vibrant secondary market for non-housing, mission-based community development loans.
  • Create insurance vehicles that fill critical voids.
  • Invigorate and retarget consumer subsidies.
  • Improve mechanisms for accountability and transparency.  
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