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Evanston Is the First Municipality in the U.S. to Use Public Funds for Black Reparations — Here’s How it Works

Evanston is testing a revolutionary new reparations program designed to use cannabis sale tax dollars to help increase Black homeownership. —-

The systemic racism in real estate is well-documented — and its effects on people of color are real. This is especially true for Black people, who own a disproportionately low share of the homes in the U.S: For instance, consider that there’s a gap of nearly 30% between white and Black homeownership in America.

But what if there was something that could actually help reverse decades of damage? And what if that thing was … cannabis?

Those are questions that Evanston, Illinois, wants to answer with a revolutionary new program designed to use tax dollars generated from cannabis sales to help increase Black homeownership in the suburb. To be clear: Evanston is paying reparations, and pot is helping make it happen.

Here’s an introduction to Evanston’s ground-breaking reparations plan, and how it’s been working so far in the city where white homeownership is disproportionately high and the Black population has been diminishing.

An image of Northwestern University in Evanston to demonstrate recent reparation efforts.
Source: (hao chen / Unsplash)

Evanston’s diversity problem

Diversity in Evanston has long been recognized as a problem. The college town of about 74,000 residents, located 12 miles north of Chicago, is mostly white — and in the highest-home-value neighborhoods, it’s almost entirely white.

And the gap has only been growing in recent years: From 2000 to 2017, the Black population in Evanston decreased from 22.5% to 16.9% of the total population.

Locally, politicians and activists in Evanston had already recognized the issue and had been working on ideas for how to solve it.

“Our gaps were widening,” city alderman Robin Rue Simmons explained in an interview with The Guardian.

“I thought we were being delusional to continue in the same vein and believe we would bridge the gap.”

Bigger-picture housing inequality and the case for reparations

Now let’s step back and widen the frame for a moment. This is a nationwide problem — not limited just to Evanston. And the case for reparations has been gaining steam in recent years as part of scientific research, as well as in the larger cultural conversation.

In 2007, two Oregon State University professors published a study, “Housing Discrimination as a Basis for Black Reparations.” In it, they argued that historic housing and lending discrimination makes for a sound basis to consider Black reparations.

“Because of a number of policies and practices, particularly those of the federal government, many African Americans were unable to take advantage of the opportunity to buy a home on the favorable terms that were available to many white Americans,” the study noted.

Even when Black Americans could buy homes, these homes were less valuable and appreciated at lower rates, largely due to the same discriminatory policies and practices. All of this resulted in serious structural inequality in housing and the large wealth gap between Black and white households, and it in turn only further reinforced other aspects of racial inequality like access to schools.

Importantly, the study noted, the housing market won’t correct itself for this problem naturally over time. Therefore, the authors wrote, “Regardless of the specific measures that are taken, the essential point should be clear: Black reparations are called for, not just because of slavery but because of much more recent and very systematic injustices. Housing discrimination in the twentieth century forms an important part — though still only a part — of the case for Black reparations.”

An image of trees through blinds to demonstrate the importance of reparations in Evanston.
Source: (Adrien Olichon / Unsplash)

Evanston’s ground-breaking solution

Back to local politics in Evanston. In June 2019, the city council passed a resolution, 58-R-19, “affirming the city’s commitment to end structural racism and achieve racial equity.”

Next, a city equity and empowerment commission held community meetings to talk about reparations and gather input from the public. The commission summarized its findings from these meetings in a report for the city council, which created a subcommittee to start the planning.

By November of that year, the measure came to a vote at a meeting of the Evanston city council. While these types of meetings are often ho-hum affairs covering dry policy topics, this one came with a sense of history and pioneerism — and the measure passed nearly unanimously.

The vote was eight to one in favor of “A Resolution Establishing a City of Evanston Funding Source Devoted to Local Reparations.” In so voting, Evanston became the first municipality in the country to pledge public money to reparations for Black residents.

The language specified how it would happen: “The Chief Financial Officer is hereby authorized to divert all adult use cannabis funds received by the Illinois Department of Revenue for sales of adult use cannabis to a separate fund in a City account for local reparations.”

As part of the city’s 2020 budget, Evanston created a reparations fund that would draw tax revenue from adult recreational cannabis sales — up to $10 million. Members of the public are also invited to make a donation into the fund.

In February 2020, the reparations subcommittee met to discuss the history and possible solutions to housing and redlining in Evanston. Minutes show the meeting presented stark data on the state of housing in Black America.

For instance, Blacks have a 31.14% denial rate for mortgages; this population represents 14.6% of the U.S., but only receives 6% of new mortgages nationwide. In Chicago, of 13,190 Black applications for homeownership, only 5,200 were approved.

By the way, Black access to real estate is not only limited in terms of homeownership, but also in terms of professional access within the industry: According to research by Deloitte, fewer than 6% of active real estate agents and brokers identify as Black, compared with more than 11% of the population.

To address this, HomeLight recently announced a partnership with the National Association of Real Estate Brokers (NAREB) to launch the Black Real Estate Agent Program, an effort geared at making the industry more inclusive while helping Black real estate agents get started — and thrive — in the business.

Rolling out the reparations program

At the February 2020 meeting, Mark Edward Alston, owner of Skyway Realty and Alston & Associates Mortgage Company, and a public policy strategist in the areas of housing and finance, outlined suggestions for needed remedies. Among them, he suggested the reparations fund starts a grant of $10,000 to $15,000 for homeowners and homebuyers in Evanston, particularly in its 5th ward. They should receive down payment assistance in the form of a grant, he said.

Months later, in August 2020, a subcommittee appointed by the city council recommended that the council approve the use of $400,000 from the fund for housing assistance programs meant to benefit 16 households. The money would provide housing assistance for Black residents who were discriminated against by the city, or whose ancestors were discriminated against by the city in the years between 1900 and 1969.

What now?

At a meeting in November, Alderman Ann Rainey explained that the city expects to collect $1 million in the fund within its first year, both through cannabis sales as well as personal donations.

She also said the city plans to develop a committee to review eligibility and determine funding. So these are important steps forward, the city council agrees — but there’s plenty of work to be done.

“Everyone is frustrated,” said Rue Simmons, as cited in Evanston daily news pub The Daily Northwestern. “This program is overdue. It’s not enough. I’m hearing all of that and I am completely agreeing, but I just have to say how proud I am that we are making these steps towards repair.”

Header Image Source: (Matthew Henry / Burst)

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