Brian Rice in front of five of his buildings in Ensley, Alabama. Photo by Brian Rice courtesy BBC News.
BBC News investigates the story of engineer and entrepreneur Brian Rice, who wanted to invest in his hometown of Birmingham, Alabama. Despite having enough cash to purchase eight buildings and a solid credit score, Rice was unable to secure the financing he needed to redevelop the properties because of the majority black demographics of the area. He concluded, “The greatest challenge for African Americans is access to resources. If unfair banking is removed from my story, all of my eight historic buildings would be renovated and there would be thriving businesses in them that improve the community.”
The article quotes author and PBI Advisory Board member Prof. Mehrsa Baradaran, who says lawmakers should “consider a public banking system — akin to those in Europe or China” — as a key solution for racial economic inequality. Baradaran elaborates on this idea in a recently published NYU Law Review article titled “Closing the Racial Wealth Gap.”
The BBC News article continues:
“In Chicago, for every dollar banks loaned in the city’s white neighbourhoods in 2012-18, they invested just 12 cents in black neighbourhoods. And JP Morgan Chase lent 41 times more money in white areas than in black ones. … In 1863, when President Lincoln signed the Emancipation Proclamation, black Americans owned less than 1% of US total wealth. Nearly 160 years later, this number has barely budged. …
“While financial institutions and academics are trying to find ways of addressing racial economic inequality, in Birmingham, Brian Rice is still without funding for his development project.
“Rice explains: ‘They compared my eight historic properties to farmland 14 or so miles away, and they compared my buildings to an abandoned car wash. Nothing about my properties resembles those. … The reality is that African Americans have always been locked out of the access to capital from banks. In a lot of cases, they don’t own the buildings in their communities or they just have dilapidated ones that they can’t move forward with. It is pure frustration.’”