By Neal Richardson, Assistant Vice President, Assistant Director of Asset Management at U.S. Bancorp Community Development Corporation
Like asthma, sickle cell, and diabetes, poverty has been passed down for generations in the African-American community. Unlike physical illnesses, we have failed to fully diagnose and treat the generational poverty that has plagued our economy and created inequities in wealth that will take at least 228 years to be corrected, based on an August 2016 study conducted by the Institute for Policy Studies and the Corporation For Economic Development.
The American Dream is based on the premise that opportunity for success and upward social mobility are within reach through hard work and perseverance. However, many families fall short of realizing that dream when met with the challenges of generational poverty. Those challenges are disproportionately woven into the social, economic, and political fabric of many African-American communities.
The Cost of Disinvestment
In 1986, my parents were steered toward purchasing a home in the Lewis Place neighborhood in the west end of St. Louis City—which is 99 percent African-American and 1 percent White—and away from the adjacent, more affluent Central West End neighborhood, with a 70 percent White population.
My parents paid $55,000 for their home in 1986. By the time I entered college in 2005, my parents’ four-bedroom, two-bath home was appraised at $14,400. Average home values in Lewis Place are only one-quarter of those in the Central West End.
During this time period, vacancy rates nearly tripled in Lewis Place and several poorly performing schools closed thanks to disinvestment of resources in the neighborhood. As a result, my parents were not able to leverage their largest asset to assist with college tuition payments. The college debt I incurred delayed the purchase of my first home and still hinders the liquidity I have available to build assets for my daughter. Discriminatory steering led to my parents’ inability to build wealth and had a detrimental effect on my financial wherewithal.
American Dream versus American Reality
Based on a study conducted in April 2017 by MIT economist Peter Temin, escaping poverty requires almost 20 years with nearly nothing going wrong.
While I was blessed to avoid many of the pitfalls to “making it out the hood,” many of my neighborhood friends were not as fortunate. Most of them lived with a single parent working 16-hour shifts earning minimum wage, mostly due to lack of education and access to additional opportunities. Only 5 percent of the population in Lewis Place has a bachelor’s degree, compared to 67 percent in the adjacent Central West End.
While my friends’ parents stressed the importance of education and hard work, they did not perceive these ethics having a positive impact on their future. Their reality was that their moms were working extremely hard and still struggling to make subsidized rent payments to an absent landlord. To afford a two-bedroom apartment while earning $7.25 an hour, someone would have to work nearly three full-time jobs, putting in 112 hours per week every single week of the year. My neighborhood friends returned from school to empty homes and no support system. Often, drug dealers and others profiting from illegal activities are the only people that provide youth with support and an opportunity to earn money—which leads to a life of crime, resulting in incarceration or premature death. The cycle then continues for another generation.
Taking Action
Combating generational poverty starts with educating, training, and mentoring youth to become self-sufficient, productive members of society. Missouri State Representative Bruce Franks understands that challenge. In April 2017, he successfully sponsored an amendment to restore funding of $6 million toward the state’s youth summer jobs programs in St. Louis and Kansas City, expanding opportunity for 2,700 youths to be productive.
This is a step toward ending generational poverty. But it’s only one step, and generational poverty is a deeply entrenched and complex problem in America. To break the cycle, we need constituents to hold government officials accountable to implementing aggressive policies with clear intentions on racial equity.
There is no neutral ground here—even inaction is a form of action that reinforces disparate outcomes. You can play a role in perpetuating racism or work to reverse it. Fortunately, in St. Louis, many nonprofits, educational institutions, private corporations, neighborhood organizations, and government officials are working to reverse racism. A Regional Task Force comprised of a partnership between City Garden Montessori School, Crossroads College Preparatory School, Forward through Ferguson, and U.S. Bancorp Community Development Corporation, in collaboration with Crossroads Anti-Racism Organizing and Training, are hosting Anti-Bias/Anti-Racism workshops that are open to the public, focused on dismantling racism and building anti-racist multicultural diversity within institutions and communities.
Motivated by my personal struggles, experiences, and frustrations seeing generational poverty perpetuated in my own community, I co-founded, with Michael Woods, Dream Builders 4 Equity to teach at-risk youth about financial literacy and empowerment through real estate development and investment in low-income communities. Students learn the value of saving and investing and receive the opportunity to build wealth by attaining financial equity in homes to pay college expenses.
Poverty knows no bounds, and people of all races struggle against its consequences. Due to policies that have given others incentive to discriminate, however, black kids are four times more likely to be living in poverty. It is this generation’s responsibility to reverse the wrongs of our forefathers and create a better tomorrow for our descendants. As the great Nelson Mandela stated, “Poverty is not an accident. Like slavery, it is man-made, and can be removed by the actions of human beings.”
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Neal Richardson is a product of the Lewis Place neighborhood, located in the City of St. Louis.
Neal earned his Bachelor of Science in Business Administration and Master of Business Administration with an emphasis in Finance from Webster University.
Neal has over 10 years of experience in the real estate finance industry. In his current role as Assistant Director of New Market & Historic Tax Credit Investments at U.S. Bancorp Community Development Corporation, Neal leads a team that manages over 300 tax credit financing investments ranging from five to $50 million targeted for low-income communities.
His passion for improving the opportunities available to underprivileged youth and building stronger communities, coupled with his expertise in real estate finance, has motivated him to co-found Dream Builders 4 Equity. Dream Builders is a nonprofit organization that aims to build social equity through financial equity by teaching at-risk youth about real estate development and investing in low-income communities.
Neal is further involved in the broader issues of youth development and social justice as a member of the following organizations:
City Garden Montessori School – Interim Chair of the Coalition of Neighborhood Diversity and Housing Justice
Boys & Girls Club of Greater St. Louis – Friends Group
InspireSTL – Mentor
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Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.
