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Mother Jones: PPP Lending Was Supposed to Help Small Businesses in Kansas City. That’s Not What Happened.

Mother Jones, April 25, 2021, PPP Lending Was Supposed to Help Small Businesses in Kansas City. That’s Not What Happened.

In Kansas City neighborhoods seared by decades of government-imposed racial discrimination, the Paycheck Protection Program’s forgivable loans arrived last year at lower rates than in the rest of the city. East Side areas “redlined” in the 1930s because Black people lived there—a federal decision that effectively blocked investment—received 17% fewer PPP loans than if they’d gotten an amount proportionate to their share of the city’s small employers.

So, what about that single ZIP code, 64108, that sits against the city’s western boundary but was also largely graded D and had a recorded number of Black residents at the time? All but a small piece is west of Troost Avenue, which became the city’s de facto racial dividing line, and it’s had a different trajectory than the East Side—with far easier access to lending, including the PPP.

The National Community Reinvestment Coalition’s Bruce Mitchell, Jason Richardson and Jad Edlebi offered feedback and advice at various stages of the analysis

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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