FACT SHEET: Delivering on Tulsa Commitments to Build Black Wealth
One year ago, commemorating the centennial of the Tulsa Race Massacre, President Biden announced two expanded efforts to help Black families and communities build wealth through homeownership and entrepreneurship.
- Launched a first-of-its-kind interagency initiative to address inequity in home appraisals, charged with identifying and utilizing the levers at the federal government’s disposal to root out discrimination in the appraisal and homebuying process.
- Announced a goal of increasing the share of federal contracts going to small disadvantaged businesses (SDBs), including Black- and brown-owned small businesses, by 50 percent by 2025.
Since then, the Biden-Harris Administration has taken swift action:
Rooting out bias in the home appraisal process
Homeownership is the primary contributor to building wealth for Black and brown households, but bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap.
In March, the Biden-Harris Administration released the PAVE Action Plan, which, once enacted, will represent the most wide-ranging set of reforms ever put forward to advance equity in the home appraisal process. The Action Plan details a set of more than 20 commitments and actions across all stages of the home appraisal process, including making the appraisal industry more accountable; empowering consumers with critical information and assistance if they receive a valuation that is lower than expected; preventing algorithmic bias in home valuation; cultivating an appraiser profession that is well-trained and looks like the communities it serves; and leveraging federal data and expertise to inform policy, practice, and research on appraisal bias. You can read the PAVE Action Plan here.
Advancing equity in federal procurement
Increasing federal spending with underserved businesses not only helps more Americans realize their entrepreneurial dreams, but also narrows persistent wealth disparities. According to an analysis from the White House Council of Economic Advisers, differences in business ownership account for 20 percent of the wealth gap between average white and Black households.
Recognizing this historic opportunity, the Biden-Harris Administration adopted a bold set of reforms to meet the President’s target of increasing the share of federal contracts to SDBs and increase opportunity for all underserved businesses. These actions include:
- For the first time, asking agencies to increase their goals so that governmentwide spending in FY22 results in 11 percent of contracting dollars being awarded to small disadvantaged businesses, up from the current statutory goal of 5 percent
- Releasing, for the first time, disaggregated data of federal contracting spend by race/ethnicity of business owner, a powerful transparency and management tool
- Implementing major changes to the federal government’s use of “category management” to boost contracting opportunities for underserved small businesses
- Increasing the number of new entrants to the federal marketplace and reversing declines in the small business supplier base.