By Kiara Doyal, The Seattle Medium
Last week, the Washington State Department of Commerce announced the awarding of $39.8 million in grants to 19 organizations and institutions that provide financial support to communities through the Community Reinvestment Project (CRP). This community-designed initiative aims to uplift those disproportionately impacted by the war on drugs and foster equitable economic development.
Commerce Director Mike Fong says that the initiative will support the four key pillars of the project—reentry legal services, violence prevention, economic opportunity, and equitable development—and will promote economic growth, wealth, and the long-term financial goals of the impacted communities.
“Access to capital opens doors to economic opportunity and generational wealth-building, but many communities face historic and systemic barriers,” said Fong. “We are proud to stand with community partners throughout the state who are promoting equitable access to financial resources that help individuals, families, and businesses get ahead and grow.”
“Let’s put these dollars to work around the four pillars of reentry legal services, support violence prevention, economic opportunity, and equitable economic development in community,” Fong added.
With nearly $40 million in funding, he hopes the program will drive tangible progress in areas like first-time homeownership and overall homeownership rates.
“Our hope is to take the lessons learned and apply them to other areas of our work, because we really think this is the empowerment and the partnership that we want to start seeing more of from our department going forward,” says Fong. “The challenges and the inequities in the working capital space are very real for BIPOC-owned businesses, and it’s time to really be intentional about how we can lift up community and be able to find creative ways to leverage different potential revenue sources and capital revenue streams, to be able to get those resources in people’s hands so that we can really thrive, create jobs, and build community.”
This latest investment funds two CRP programs: the Loan Guarantee Program and Blended Capital Investments.
The Loan Guarantee Program is a pool of resources that provides funding and loan loss reserves to lenders across the state, including Community Development Financial Institutions (CDFIs), local municipalities, and non-profit organizations. These organizations can then offer financing and financial services to underserved communities, small businesses, and startups that traditional banks often overlook.
The Blended Capital Enhancements program aims to assist people in securing and building assets. The program will help fund programs that make it easier for people to buy or expand a home, commercial property, business asset, or vehicle; reduce debt; build credit; save more using matching funds; and obtain other financial support and services.
Darryl Smith, Executive Director of HomeSight, a non-profit organization invested in helping community members purchase homes, said that racial disparities in homeownership weren’t created by accident, and it won’t be fixed by accident. He believes that Commerce’s efforts to support intentional solutions to a deeply rooted inequity in homeownership through this program will help close the racial wealth gaps that exist in homeownership.
“Commerce’s investment will expand the scope for Black and BIPOC developers, through Field Order 15, which is an innovative strategy to lower barriers for our builders who are invested in the goal of improving homeownership rates for the BIPOC community,” says Smith. “Launched in January, this program provides upfront grant money, eligibility for low-interest loans, and technical support for Black developers who are building affordable homes in the communities that are most needed.”
Smith highlighted two major problems that impact the homeownership rates of Black people in Western Washington—the short supply of housing and the lack of Black developers working in the community.
“There is an incredibly short supply of housing that disproportionately affects the BIPOC community; there are gigantic shortages, and that does nothing else but make it more difficult for people to purchase,” says Smith. “The second major problem, which is a really important point, is that we have an incredible lack of Black developers working in the community, and we need to improve that because we need to have their voices at the table.”
Mike Skinner, Executive Director with the Center for Inclusive Entrepreneurship (CIE), says that his organization will utilize the resources from Commerce to support their work in marginalized rural areas with BIPOC emerging entrepreneurs.
“Thanks to support from Commerce, we are grateful to launch our Matched Savings program, which provides $4,500 seed grants along with free training and technical assistance to help emerging entrepreneurs get their business started,” said Skinner.
Reggie Brown with Rudolph Homes describes the funding from Commerce as unprecedented and is thankful for the State of Washington for having the courage to do something about racial equity.
“A special thank you to Commerce for listening and executing a great plan. This is a historical moment for us all,” said Brown. “We believe that we have a fantastic strategy for these funds, and that it will have an immediate impact in our communities and all over.”
When asked about what success for the program looks like, Fong responded, “When we start seeing the disparities across the board not just move but lead to outcomes for future generations that are entirely different than what we are seeing now, that is success,” Fong said.
“When there is commitment, momentum, and collaboration like we have, you can really accelerate that timeline. We are holding ourselves accountable and now recognizing that this work is really at the heart of what we’re trying to do, because, truth be told, making headway, whether it’s in homeownership or through the Black Home Initiative, ultimately, it is going to lead to better outcomes across the board for all our communities,” Fong concluded.