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3 measures Biden is introducing to help close racial wealth gap

"Home appraisals are one of many parts of the real estate market that perpetuate racial inequality."

U.S. President Joe Biden delivers remarks before a ceasefire agreed by Israel and Hamas was to go into effect, during a brief appearance in the Cross Hall at the White House in Washington, May 20, 2021.
Jonathan Ernst | Reuters

As a candidate, President Joe Biden promised to address the growing racial wealth gap. On Tuesday, he will announce new initiatives aimed at addressing equity in housing and small business.

Biden's announcement comes on the heels of his visit to Tulsa, Oklahoma's Greenwood neighborhood on the 100th anniversary of the Tulsa race massacre, one of the deadliest incidents of racial violence in U.S. history.

The racial wealth gap has been a persistent problem: The median Black family has just 10% of the wealth of the median white family, Black Americans are more than twice as likely as white Americans to be poor, and the Black unemployment rate is almost double the rate of that for whites.

Biden's racial wealth gap efforts focus on three initiatives:

  1. Eliminating inequality in home appraisals. The U.S. Department of Housing and Urban Development will take steps to eliminate discrimination in home appraisals. "Home appraisals are one of many parts of the real estate market that perpetuate racial inequality," Aaron Klein, a fellow at the Brookings Institution, said via email. "Home appraisers give estimates that have huge impacts with too little accountability for their rationale."

    By the White House's estimates, homes in majority Black neighborhoods "are often valued at tens of thousands of dollars less than comparable homes in similar, majority white communities," a disparity that contributes to the racial wealth gap.
  2. Strengthening Fair Housing Act rules. The HUD will more vigorously enforce the Fair Housing Act, reversing Trump-era policies that weakened protections afforded by the law.
  3. Increasing federal contracts for small businesses. The administration will increase the share of federal contracts going to small, disadvantaged businesses by over 50% in the next five years. This could mean an additional $100 billion in federal contracts during these five years, officials said.

Neither student debt forgiveness nor reparations to the descendants of slaves are included in Biden's latest initiatives.

Black experts: What's missing from the conversation around the racial wealth gap

Video by Courtney Stith

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Markets were mixed Tuesday morning.

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Words you've heard: home appraisal 

A home appraisal is a professional assessment of the value of a home. A qualified appraiser uses tools including a visual inspection, plus info on market trends and recent sales of comparable properties to determine appraisal value during a property purchase, sale, or refinancing. 

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

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