Gentrification Pros and Cons: A Double-Edged Sword

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Key Takeaways:
  • Gentrification is a hotly debated topic between proponents and opponents because of its pros and cons.
  • Some of the benefits of gentrification include reduced crime rates, improved infrastructure and economic growth.
  • Some of the cons of gentrification include displacement, cultural erasure and a spike in the cost of living, especially for underserved communities.

Whether you live in a rural or urban area, you have likely heard of the term “gentrification.” Simply put, gentrification is the process of upgrading an older, usually low-income neighborhood, which typically results in higher costs of living and resident displacement.

However, gentrification is a complicated topic. It is true that gentrification can provide new opportunities and jobs as buildings are renovated and new stores pop up. But it is also evident that gentrification imposes significant costs on the original inhabitants of the neighborhood.

As a result, this topic is hotly debated among developers, social justice groups and others. Ahead, we discuss what gentrification is in more depth and the pros and cons of gentrification.

Gentrification Defined

Gentrification is defined as a profit-driven change in the socioeconomic and racial demographics of a low-income neighborhood. Many factors contribute to gentrification. One is the rapid influx of capital or job growth into a city that causes a quick increase in population. A tight housing market is often one of the first signs of gentrification, as middle- and upper-class people move into the city in large numbers.

However, the reason why gentrification occurs is not always organic. Targeted public-sector policies that offer incentives to middle- and high-income families to move into distressed neighborhoods, often in cities, can cause gentrification.

The Pros and Cons of Gentrification

Gentrification, like any significant change in a region, carries both advantages and disadvantages. On the positive side, gentrification can help enhance property values and attract new businesses and employment opportunities to a community.

However, gentrification can also cause significant negative consequences. For example, gentrification often causes displacement of underrepresented communities because it increases the cost of living. The following outlines the common pros and cons of gentrification.

16 Pros of Gentrification

There are several benefits of gentrification, including an influx of stores and shops that create economic opportunities. This positive change can help bring much-needed capital, goods and services to a low-income area.

Another positive effect of gentrification is that it can help boost the value of homes. Below, we explore several benefits of gentrification.

1. Neighborhood Revitalization

Neighborhood revitalization is the alteration of a neighborhood in a way that improves the quality of life of its residents. By bringing in new shops and stores, neighborhoods that were previously afflicted with empty storefronts become filled with coffee shops, clothing stores or other brick-and-mortar outposts for critical goods and services. These new businesses can revitalize a neighborhood and infuse new life and resources into a declining or poor area.

2. Increased Property Values

A significant advantage of gentrification is increased property values. This change is especially favorable for those who can sell their homes for a high price. When an area goes through gentrification, older buildings are updated, which causes property values to rise. As property values increase, higher-income residents are more likely to move into the area, which causes values to grow even higher. Those who sell their homes as prices rise are able to build more wealth. Gentrification can also increase local tax revenue, since property taxes rise with the property value.

3. Economic Growth

Gentrification can boost economic growth because the influx of residential development and stores often spurs new job opportunities. For example, building new or renovating existing buildings creates a need for construction workers, and opening new restaurants or stores increases the demand for associates. All these new businesses create an influx of jobs and a boost to economic growth from patrons spending time and money at the new establishments.

4. Enhanced Infrastructure

Gentrification can lead to an improved neighborhood or city infrastructure, including new buildings, roads and sidewalks. These improvements can create a cleaner and more modern neighborhood. Other community issues like potholes or unsafe and inaccessible walking areas are often addressed to make better living conditions for the public.

5. Reduced Crime Rates

A neighborhood with low crime rates provides its inhabitants with a sense of relief and calm. While it is not always guaranteed, some studies show that gentrification can reduce crime rates and improve public safety. For example, a study from MIT released in 2017 shows that after gentrification took over rent-controlled housing in Cambridge, MA, crime dropped 16%. Additionally, the study indicates that gentrification increased economic prosperity in the city.

This reduction in crime can result from a number of factors, such as people and businesses investing more in community and public safety. The investment helps encourage people to move to a new area because they often feel the community cares about them and has ensured their safety. Adding increased presence of public safety officers can reduce crime rates and make the overall neighborhood safer.

However, it is critical to acknowledge that gentrification does not necessarily erase crime. In some cases, gentrification can lead to crime displacement or the relocation of crime to another area.

6. Diverse Dining and Entertainment Options

As gentrification takes over a low-income neighborhood, locals will see a variety of new restaurants and stores open. This can offer locals new shopping, entertainment and hangout options for residents. Additionally, the neighborhood that existed there before can influence the restaurants and stores, which can help diversify them. As the new businesses attract more visitors, businesses can adjust their offerings to help them earn more revenue, which can help the local economy grow.

7. Environmental Improvements

While gentrification may bring new trendy storefronts and restaurants, it can also lead to the addition of green amenities. Green amenities can be community gardens, parks and the use of energy-efficient building materials. These types of additions help improve the curb appeal of the neighborhood and create a healthier environment for inhabitants.

8. Preservation of Historic Architecture

Gentrification does not always lead to the demolition of every building in a neighborhood. When done thoughtfully, developers and city planners who are renovating a low-income area sometimes restore old homes and seek to highlight their beauty. Preserving the historic areas and architecture in a neighborhood undergoing gentrification is an important step in keeping the original essence of a neighborhood vibrant and alive.

9. Increased Community Pride

Increasing the value of an area’s property, cleanliness and safety can help boost the pride of its inhabitants. This sense of pride is not always the direct result of gentrification, but it can be an added benefit of the change. Of course, all people should be able to be proud of their communities, no matter how wealthy or aesthetically pleasing they are to outsiders.

10. Social Mix and Interaction

In some cases, gentrification can help foster a healthy mix of inhabitants and visitors from different socioeconomic backgrounds. The development of new buildings and amenities in gentrified areas can attract individuals from middle- or high-income communities to visit and relocate to previously low-income areas. This can help develop a mixed-income area, which can help strengthen a community as a whole, socially and economically.

11. Attraction of Talent and Creativity

Gentrification can help create opportunities for business owners to open new shops, such as grocery stores, coffee shops, yoga studios or restaurants. The establishment of new businesses can attract new talent looking for work. This change can cultivate talent, creativity and community more broadly.

12. Better Education Opportunities

As a government invests in an area, it is often more likely to fund better public school systems or create new private educational centers. This can help create more educational opportunities for residents and draw others into the city to either benefit from the education or help foster new educational ideas.

13. Improved Public Transportation

As gentrification impacts an area, transportation may expand. Having easy access to different types of transportation can make an area more valuable, since residents often seek to live in an area that makes their commute easier.

14. More Access to Healthcare Facilities

When a neighborhood is developed, it can also lead to new healthcare facilities that were not once previously available. Bringing in these facilities can create more access to healthcare and draw more qualified medical professionals.

15. Positive Perception and Image

New stores, restaurants and housing in a neighborhood can attract new residents and visitors. Clean and safe streets create an upscale image that a neighborhood may have lacked before gentrification occurred. Overall, improving the public image and appearance of a neighborhood can help improve community morale and living conditions.

16. Increased Property Tax Revenue

Local governments get most of their funds for public services from property taxes. As properties gain value, taxes rise and create more government revenue that goes back into improving the community.

16 Cons of Gentrification

Although gentrification has the potential to help improve neighborhoods and increase economic growth, it can also have negative ramifications that warrant consideration. For example, a significant influx of middle- or high-class residents can cause the local cost of living to rise, which can cause displacement. When the original inhabitants and business owners of an area are forced to move, it can lead to cultural erasure. Ahead, we dive into different negative effects of gentrification.

1. Displacement of Long-Term Residents

Displacement is one of the biggest cons of gentrification. While new developments or renovations to a low-income neighborhood may seem positive, they can cause the local cost of living to skyrocket. As a result, this can affect an area’s original residents and business owners and price them out. That is why opponents of gentrification commonly argue that this process caters to high-income residents over low-income, which can promote inequity.

2. Loss of Affordable Housing

In some cases, developers and city planners demolish affordable housing complexes to make room for new developments. Even if an affordable housing complex is not knocked down, landlords of affordable housing units may raise the rent to a point where low-income residents are priced out.

3. Increased Cost of Living

Since gentrification often leads to a higher cost of living, both luxury buildings and trendy stores result in higher costs for housing and food. Even if the original residents of an area can afford housing, the overall cost of living often rises too much for them to remain in the community.

4. Socioeconomic Disparities

While gentrification may seem to provide opportunities for low- and middle-class communities to live together, it can often create or inflame socioeconomic disparities. Gentrification can cause this by driving up property values or rent, which commonly forces low-income residents to move out or face more financial burdens. Additionally, as wealthier residents move in, local businesses may adjust their offerings and increase their prices, which can cause a loss of resources. As low-income residents are displaced and lose more resources, it increases inequity.

5. Cultural Erosion

Gentrification can cause cultural erosion by stripping low-income residents of their foods, stores and traditions. For example, a grocery store may replace the traditional and unique food establishments of the original residents. Also, taking down historical buildings and putting up skyscrapers can erode the neighborhood’s culture and character.

6. Loss of Small Businesses

Gentrification can decimate small businesses. Chain stores are often brought in to appeal to the masses. As a result, local mom-and-pop shops often fall by the wayside with gentrification, many of them often run by underserved or underrepresented community members.

7. Reduced Diversity

Gentrification typically occurs in low-income areas that, due to systemic inequities, are commonly home to Black and Latino Americans. Oftentimes, as neighborhoods change, they attract white middle- and high-class residents. As the areas start to cater to their new residents, they become too expensive for their original inhabitants, which forces them to move away. Ultimately, this causes the area to become less diverse.

This process makes it impossible for residents of underserved communities to stay in their own neighborhoods, compelling them to move into poorer areas or become homeless.

8. Disruption of Social Networks

Gentrification can disrupt social networks by creating turnover in neighborhoods. What used to be a community full of residents who hoped to stay forever can change to a transient pool of young professionals who come and go as costs fluctuate. This process results in social networks falling apart and creates more isolated living environments.

9. Increased Homelessness

As aforementioned, gentrification can increase homelessness by displacing low-income residents. To create new developments, old buildings are commonly demolished. This process forces residents out of the neighborhood and often into homelessness.

10. Strain on Public Services

Gentrification can strain public services. For example, the rise in homelessness as a result of gentrification requires more services like shelters. As more people are displaced and need help from the government, more resources are required that a city or state may not have available.

11. Loss of Green Spaces

While gentrification can create new green spaces, in some cases, it can lead to a loss of small gardens. In sum, gentrification can remap and remake the entire neighborhood, including its original green space. This process can result in more buildings and fewer traditional green areas.

12. Reduced Community Cohesion

When a neighborhood gentrifies, community cohesion often diminishes. Residents must deal with an abundance of change that they might not handle well, causing a disruption to some residents’ everyday living and cohesiveness.

13. Gentrification-Induced Stress

Gentrification can stress the current residents. Facing the potential or actual loss of their homes, residents’ mental health can be negatively impacted. Even if they can remain in the neighborhood, the increased financial burdens arising from higher costs can cause original residents substantial stress.

14. Negative Impact on Schools

While gentrification can have a positive impact on the school system, it can also negatively impact local public schools. For example, a 2021 study from Housing Matters found that families moving into gentrified neighborhoods tend to opt out of public schools. This decision can leave public schools with limited enrollment and reduced resources.

15. Loss of Historical Character

Gentrification often promotes the idea that newer is better. As a result of the push to replace old buildings, the historical character of the neighborhood is sometimes lost. Historical architecture can be leveled and not given proper reverence.

16. Strain on Transportation

Sometimes, gentrification can have a positive impact on transportation. But that is not always the case. People who move into gentrified areas usually commute for work and pleasure. As these areas draw in more residents, developers must create or update public transit to these neighborhoods. This process can put a strain on public transportation development because of an increase in projects to complete.

The Bottom Line

Gentrification can benefit some, while it causes long-lasting negative impacts on others. Typically, communities that are negatively impacted are historically marginalized, low-income and diverse communities. There are several examples of gentrification, and no one example is the same, which contributes to the variety of pros and cons of gentrification.

Follow Robert F. Smith on LinkedIn to learn more about gentrification and other related topics.

Across our Communities

MBE Entrepreneurship & Supplier Diversity

1. Provide technical expertise: offer subject matter and technical expertise to catalyze and support community initiatives 

E.g., tax/accounting experts to help MBEs file taxes

E.g., business experts to help MBEs better access capital and craft business plans to scale their teams and operations

Access to Capital (CDFI/MDI)

2. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years

Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years

Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

Education/HBCU & Workforce Development

3. Offer more paid internships: signup onto InternX and offer 25+ additional paid internships per year to HBCU/Black students 

Digital Access

4. Issue digital access equality bonds: issue equality progress bonds and invest proceeds into SCI’s digital access initiatives

5. Fund HBCU campus-wide internet – up to $50M in donations or in-kind: Partner with the Student Freedom Initiative to deliver campus-wide high-speed internet at ~10 HBCUs across SCI regions

Advocacy

6. Be an advocate for SCI priorities: engage federal and state agencies to drive policy and funding improvements to better support SCI’s near-term priorities

E.g., Engage the Small Business Administration and Minority Business Development Agency to increase technical assistance programs and annual spend to better support Minority Business Enterprises (MBEs) with capital and scaling needs

E.g., Ask the Federal Communications Commission (FCC) to include multi-dwelling unit connectivity in its new broadband connectivity maps and ask the National Telecommunications and Information Administration (NTIA) to allow non-FCC data in state broadband plans to unlock ~$285M in potential government broadband funding for 5 SCI regions

Directly Fund SCI

7. Invest directly into SCI (coming soon): provide funding for SCI to pool and invest in community initiatives that are most well-positioned for funding and can drive direct community impact.

Memphis, Tennessee

Lead community organization: The Collective Blueprint

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Scale technical assistance – $15M: fund* to expand technical assistance through business coaches and wrap-around services for 500+ MBEs over 5 years to help them scale from <$1M to $5M+ in annual revenue

2. Standup MBE fund – $15M: standup/scale MBE fund* to offer more flexible access to capital arrangements 400-500 MBEs over 5 years

 * Lead organization: The Collective Blueprint; Contributing local organizations for community strategy include (but not limited to): Community Unlimited, Women’s Business Center South, Epicenter, others

Estimated impact (of all initiatives): 2.3x increase in MBE value & 20K+ new jobs, boosting Black community’s net worth by ~$3B+

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

3. Provide loan guarantees – $15M: create a fund* to provide 80% loan guarantees over 5 years to encourage lender participation and inject more capital into the community

4. Conduct advocacy: ask US Treasury & Tennessee State to allow Tennessee CDFIs/MDIs to retain SSBCI capital & offer loan guarantees to boost loan issuance

5. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs** over 5 years modernize their core systems, hire and train staff, expand marketing and standup a SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

  • Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years
  • Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years
  • Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* Leading organizations for community strategy include (but not limited to): Community LIFT, Memphis CDFI Network, etc.

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: Community Unlimited, Hope Credit Union, River City Capital, United Housing Inc, etc.

Estimated impact (of all initiatives): ~$330M+ in additional loans per year to support ~30K+ MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

6. Standup training hub – $30M: fund* the establishment a world-class training hub that offers certificate-granting STEM and innovation programs in advanced manufacturing, health care, etc. to 10K+ youths

7. Fund SFI program – $7M: fund the Student Freedom Initiative’s Income Contingent Alternative to Parent Plus to support ~15 Black STEM students per year forever at 4 HBCUs**

* Lead organization: The Collective Blueprint; Contributing local organizations for community strategy include (but not limited to): Greater Memphis Chamber and Workforce Midsouth

** Minority Serving Institutions / HBCUs with STEM programs being considered: Le Moyne-Owen, Baptist Memorial, University of Memphis, Rust College

Estimated impact (of all initiatives): 8K+ additional college graduates and 10K workers with high-paying wages to drive ~$1B+ in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

8. Accelerate digital access initiatives – $75M: partner with local orgs* to invest in setting up internet connections / installing hotspots, offering laptops and supporting adoption (through government subsidy technical assistance and digital literacy) to connect ~135K homes to high-speed internet in the Memphis region

9. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~135K unconnected households 

 * Lead organization: The Collective Blueprint; Contributing local organizations for community strategy include (but not limited to): CodeCrew

Estimated impact (of all initiatives): ~135K households connected to high-speed internet to unlock ~$2B+ in economic potential

Houston, Texas

Lead community organization: Greater Houston Partnership

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Scale team – ~$3M: hire 3-4 FTEs over 5 years for One Houston Together* to help companies increase MBE spend from ~2% to 5-10%+ as well as BIPOC workforce advancement and BIPOC board representation 

2. Increase MBE certification and scale technical assistance – ~$2M: partner with One Houston Together* and the Houston Minority Supplier Development Council (HSMDC)** to certify additional MBEs, develop Minority Business Finder database tool and provide resources and services to help local MBEs scale and participate in Pathways to Excellence program

3. Commit to increase racial diversity in supply chain and procurement: increase MBE spend in Greater Houston region* to 5-10%+

* One Houston Together serves as lead (please contact if you are interested in funding these initiatives)

** Houston Minority Supplier Development Council (HSMDC) serves as a partner organization (please contact if you are interested in learning more about this initiative)

Estimated impact (of all initiatives): 2.5x increase in MBE value & ~55K new jobs, boosting Black community’s net worth by ~$12B 

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

4. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

  • Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years
  • Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years
  • Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: Unity National Bank, Unity Bank of Texas, PeopleFund, Houston Business Development Inc, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

5. Fund SFI program – $120M: fund the Student Freedom Initiative’s Income Contingent Alternative to Parent Plus* to support ~1.2K Black STEM students per year forever at 7 HBCUs**

* Student Freedom Initiative serves as lead (main contact if you are interested in learning more and funding this initiative)

** Minority Serving Institutions / HBCUs with STEM programs being considered: Texas Southern University, University of Houston, Prairie View A&M University, Houston Baptist University, University of Houston-Clear Lake, University of Houston-Downtown, University of St Thomas.  

Estimated impact (of all initiatives): 5K+ additional college grads & ~600 workers with senior exec positions / high-paying wages to drive ~$0.2B in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

6. Accelerate SCI’s digital access initiatives – up to $80M in donations or in-kind: invest in setting up internet connections / hotspots, offer laptops/Chromebooks and support adoption (through government subsidy technical assistance and digital literacy) to connect ~145K homes to high-speed internet in the Houston region*

7. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~145K unconnected households 

* Community organization(s) being identified 

Estimated impact (of all initiatives): ~145K households connected to high-speed internet to unlock ~$3B in economic potential

Greater New Orleans, Louisiana

Lead community organization: Urban League of Louisiana

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Scale Black Business Works Fund – $10M: grow the Urban League of Louisiana’s Black Business Works Fund to support ~3K-4K MBEs over 5 years with emergency working capital needs to support/sustain ~$1B+ in annual revenues

2. Scale technical assistance – $20M: fund the Urban League of Louisiana, New Orleans Business Alliance, Thrive New Orleans and Propellor to scale bookkeeping, B2C payment, marketing support & subsidized rent to scale 200+ MBEs from <$1M to $5M+ in annual revenue

Estimated impact (of all initiatives): 2.5x increase in MBE value & 8K+ new jobs, boosting Black community’s net worth by ~$2B+

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

3. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT teams to conduct needs diagnostic, implement tech solution & provide technical assistance

  • Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years
  • Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years
  • Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: New Orleans Business Alliance (community convener), Liberty, TruFund, LiftFund, NewCorp, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

4. Subsidize internships & apprenticeships – $40M: fund the New Orleans Youth Alliance, YouthForce NOLA and the Urban League of Louisiana to place and help subsidize apprenticeships, internships and other work-based learning experiences for ~20K young adults in high-pay sectors (e.g., energy)

5. Fund SFI program – $12M: fund the Student Freedom Initiative’s Income Contingent Alternative to Parent Plus to support ~120 Black STEM students per year forever at 3 HBCUs*

* Minority Serving Institutions / HBCUs being considered: Dillard University, Southern University – New Orleans and Xavier University of Louisiana

6. Scale career prep – ~$10M: scale the New Orleans Youth Alliance and YouthForce NOLA with 15-20 coaches over 5 years to equip ~20K young adults with skills for high-paying industries, job search & prep and subsidized transportation

Estimated impact (of all initiatives): ~2K additional college graduates and ~20K workers with high-paying wages to drive ~$1B in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

7. Accelerate SCI’s digital access initiatives – up to $35M in donations or in-kind: partner with New Orleans’s Office of Information Technology & Innovation and Education SuperHighway to invest in setting up internet connections / hotspots, offering laptops/Chromebook and supporting adoption (through government subsidy technical assistance and digital literacy) to connect ~55K homes to high-speed internet in Greater New Orleans region

8. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~55K unconnected households

Estimated impact (of all initiatives): 55K households connected to high-speed internet to unlock ~$1B in economic potential

Charlotte, North Carolina

Lead community organization: Charlotte Regional Business Alliance

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Offer in-kind FTEs: provide 2-5 in-kind FTEs to the Charlotte Regional Business Alliance (CRBA) over 5 years to convene corporate partners, assess their MBE spend, develop pipeline to increase MBE spend to 5-10%+

2. Offer technical assistance expertise: partner with the Charlotte Regional Business Alliance (CRBA) to advise/mentor ~200 MBEs on capital/loan access to help them scale from <$10M to $50M+

3. Commit to supplier diversity: increase MBE spend in Charlotte region to 5-10%+

Estimated impact (of all initiatives): 3x increase in MBE value & ~13K new jobs, boosting Black community’s net worth by ~$2B+

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

4. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance; in-kind experts to also help build out the MBE ecosystem through CDFIs/MDIs, market CDFI/MDI offerings and programs and help draft final loan agreements to qualify borrowers between investment fund(s) and CDFIs/MDIs

* CDFIs/MDIs being considered (examples and not exhaustive): Security Federal Bank, Institute / North Carolina Community Development Initiative, Sequoyah Fund Inc, Self-Help Credit Union, BEFCOR, Aspire Community Capital, etc.

  • Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years
  • Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years
  • Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: Security Federal Bank, Institute / North Carolina Community Development Initiative, Sequoyah Fund Inc, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

5. Fund SFI program – up to $10M: fund the Student Freedom Initiative’s HELPS program to support ~1.5K+ students per year at HBCUs* with emergency expenses – e.g., unexpected health costs, late rent payments, etc.

* Minority Serving Institutions / HBCUs in Charlotte that are being considered: Johnson C. Smith University, Johnson & Wales University – Charlotte, Charlotte Christian College

6. Provide in-kind staff: offer 2-5 FTEs to the Charlotte Regional Business Alliance (CRBA)over 5 years to track Black-/Brown-executive representation, convene corporate partners to develop executive pipeline and hiring plans and support corporate partners to increase representation from ~10% to 30%+

Estimated impact (of all initiatives): 2.5K+ additional college graduates and 2.5K workers with high-paying wages to drive ~$0.2B in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

7. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~35K unconnected households

Estimated impact (of all initiatives): ~35K households get connected to high-speed internet to unlock ~$700M in economic potential for Charlotte

Birmingham, Alabama

Lead community organization: Prosper Birmingham

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Fund startups and give access to investor network – $70M: grow the Prosper Health Tech Fund – powered by Gener8tor – and offer venture capital technical assistance to scale 50+ startups from <$1M to $5M+ in annual revenue; near-term priority is to secure $4M in venture investment by end of May 2022

2. Fund technical assistance – $25M: fund Prosper Birmingham, Magic City Match, and Birmingham Business Alliance to establish/expand business advisory programs, renovate and subsidize retail/office space for MBEs and scale coaches & support services (e.g., digital footprint, B2C platforms, accounting & bookkeeping, recruitment, etc.) to help 100+ MBEs scale from <$1M to $5M+ in annual revenue

Estimated impact (of all initiatives): 3x increase in annual MBE revenue & 8K+ new jobs, boosting Black community’s net worth by ~$2B+

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

3. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

  • Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years
  • Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years
  • Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: First Bancshares, Commonwealth National Bank, TruFund, Sabre Finance, Bronze Valley, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

4. Fund scholarships and hire coaches – ~$35M: scale Birmingham Promise fund to financially support 200-250 students per year over 4 years to increase college retention and graduation rates

5. Fund endowment – $2M: support 50 University of Alabama at Birmingham college students per year with housing to reduce their financial burden and increase college retention and graduation rates

Estimated impact (of all initiatives): 6.5K+ additional college graduates & 35K workers with high-paying wages to drive ~$1.2B in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

6. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~35K unconnected households

Estimated impact (of all initiatives): 48K households get connected to high-speed internet to unlock ~$700M in economic potential for Jefferson County

Birmingham, Alabama

Lead community organization: Prosper Birmingham

MBE Entrepreneurship & Supplier Diversity

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Fund startups and give access to investor network – $70M: grow the Prosper Health Tech Fund – powered by Gener8tor – and offer venture capital technical assistance to scale 50+ startups from <$1M to $5M+ in annual revenue; near-term priority is to secure $4M in venture investment by end of May 2022

2. Fund technical assistance – $25M: fund Prosper Birmingham, Magic City Match, and Birmingham Business Alliance to establish/expand business advisory programs, renovate and subsidize retail/office space for MBEs and scale coaches & support services (e.g., digital footprint, B2C platforms, accounting & bookkeeping, recruitment, etc.) to help 100+ MBEs scale from <$1M to $5M+ in annual revenue

Estimated impact (of all initiatives): 3x increase in annual MBE revenue & 8K+ new jobs, boosting Black community’s net worth by ~$2B+

Access to Capital (CDFI/MDI)

Our ambition:

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

3. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years

Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years

Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

* In partnership with National Bankers Association and Appalachian Community Capital; CDFIs/MDIs being considered include: First Bancshares, Commonwealth National Bank, TruFund, Sabre Finance, Bronze Valley, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

Education/HBCU & Workforce Development

Our ambition:

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

4. Fund scholarships and hire coaches – ~$35M: scale Birmingham Promise fund to financially support 200-250 students per year over 4 years to increase college retention and graduation rates

5. Fund endowment – $2M: support 50 University of Alabama at Birmingham college students per year with housing to reduce their financial burden and increase college retention and graduation rates

Estimated impact (of all initiatives): 6.5K+ additional college graduates & 35K workers with high-paying wages to drive ~$1.2B in economic growth

Digital Access

Our ambition:

Increase accessibility, affordability and adoption of high-speed Internet

6. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~35K unconnected households

Estimated impact (of all initiatives): 48K households get connected to high-speed internet to unlock ~$700M in economic potential for Jefferson County