The frustration of trying to invest in my hometown

B) Markets aren't perfect

C) You have to fight against, or change the influence of (through, say, commentary in the media), the government's funding and regulation.

>Are the shareholders mostly white? It's my understanding that most large investors are pension funds, insurance companies and the like, not individuals.

Who owns and benefits from the funds?

* In my hometown, racism would have nothing to do with it. The math doesn't work out for the investment, he was denied, case closed.

* In my current town, racism has everything to do with it. We've set up structural barriers to success, which correlate strongly with race. We have a moral duty to remove those barriers.

The difference comes down to different definitions of the word 'racism.'

It's not a question of precision either. Just as the same sound might mean something different in Italian than in English, the same word will mean something different in Seattle than in Alabama. The differences tend to be more subtle, so people don't recognize that they're talking about completely different things. That goes for a lot of words ("white supremacy" especially).

The high-level problem, though, is if we did invest in lower-income communities in the way the author describes, we'd be wealthier as a nation as a whole. Individual investments might not come out ahead (so private banks wouldn't necessarily want to finance that), but the net wealth generated in the community would more than make up for the new risk. If the federal government ran banks, even human element aside and just looking at likely expected impact on taxes, those loans would make sense. That's a problem it makes sense to fix. And the article gets back into reparations. Even if we did come out behind, morally, those risks would probably make sense too -- the multiplier of a loan like this which might be defaulted on is far greater than hand-outs. If nothing else, we've improved a few buildings and a community. But I don't think we would come out behind. Even back-of-the-envelope numbers place us well ahead.

Go to your city hall or their website and see if they have an organizational chart. For some of us one thing will overwhelmingly stick out. For others it's just business as usual.

> the municipality got rich on a boom of local industry 0-70yr ago and could afford to drive them out

This did not happen. Local industry collapsed and ushered in slumlords. City living has only started trending up within the last 2 decades.

Banks still rely on an outdated, and I would say racist, method of property valuation called "comps". The value of the property around you determines the value of the property you are buying. If you are trying to rehabilitate a distressed neighborhood you can't use that method. You'll end up with situations like this. Needing hundreds of thousands of dollars in loans meanwhile the buildings around you are valued at $0.

Of course you don't have to take my word for it. HUD has a whole enforcement arm targeting racial discrimination in banking [0].

[0] https://en.wikipedia.org/wiki/Redlining#Court_system

https://themargins.substack.com/p/zirp-explains-the-world

> Treasury investors shift to corporate debt. Public equity hedge funds shift to late-stage private equity. Late-stage private equity shifts to mid-stage, mid-stage to early stage. Seed rounds become bigger. Angel investors become a thing. Unicorns, unicorns, and more unicorns. Ashton Kutcher.

> And that's how we end up where we are. In the past, if somewhat risky corporate debt got you 10%. It now gets you 7% (I'm making up numbers here) so you start taking meetings with late-stage growth companies. The Saudi SWF wants to modernize their economy, but they are also looking to achieve returns once found in public equities, so they have to get creative. Blackrock gets jealous of KKR who gets jealous of a16z who gets jealous of YC. There is just so much money looking to do so many new, riskier things.

> And again, that's exactly how it's supposed to work. Cutting interest rates spurs demand and risk-taking.

> When that much money finds its way into places not used to that much money, weird things happen. It's how we got to Community-Adjusted EBITDA and sleep economies. You don't create a ridesharing service, but a service that oddly loses money on every ride with a promise to figure out some future business [Tough, but fair -Can]. The distortions live at the valuation level, but also the communications and expectations level. Things just get weird.

In which case, why opt for risky profit-less startups, and not attempts to revitalize local communities? It’s almost as if these cost-benefit analyses are skewed with built-in cultural biases and expectations.