A year ago, to commemorate 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, tasked with identifying and utilizing the levers available to the federal government to eradicate discrimination in the appraisal process and buying a house.
- Announced a goal to increase the share of federal contracts going to disadvantaged small businesses (SDBs), including black and brown-owned small businesses, by 50% by 2025.
Since then, the Biden-Harris administration has taken swift action:
Eradicate Bias in the Home Appraisal Process
Homeownership is the biggest contributor to wealth creation 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. ownership, thereby contributing to the already sprawling racial wealth gap.
In March, the Biden-Harris administration released the PAVE Action Plan, which when enacted will represent the most sweeping set of reforms ever proposed to advance fairness in the housing assessment process. The action plan details a set of more than 20 commitments and actions at all stages of the home appraisal process, including making the appraisal industry more accountable; give consumers essential information and assistance if they receive a lower-than-expectation rating; prevent algorithmic biases in the evaluation of houses; cultivating a well-educated appraisal profession that is reflective of the communities it serves; and leverage federal data and expertise to inform policy, practice and research on evaluation bias. You can read the PAVE action plan here.
Advancing Fairness in Federal Procurement
Increased federal spending on underserved businesses not only helps more Americans achieve their entrepreneurial dreams, but also reduces persistent wealth disparities. According to an analysis by the White House Council of Economic Advisers, differences in business ownership account for 20% of the wealth gap between average white and black households.
Recognizing this historic opportunity, the Biden-Harris administration passed a bold set of reforms to achieve the president’s goal of increasing the share of federal contracts to SDBs and increasing opportunity for all underserved businesses. These actions include:
- For the first time, directing agencies to increase targets so that government-wide spending in FY22 results in 11% of contract dollars being allocated to disadvantaged small businesses, versus the current statutory target of 5%
- Release, for the first time, disaggregated data on federal contract spending by race/ethnicity of business owner, a powerful tool for transparency and management
- Implement major changes to the federal government’s use of “category management” to boost contracting opportunities for underserved small businesses
- Increase the number of new entrants into the federal market and reverse the decline of the small business supplier base.