Community reinvestment challenges in the age of gentrification: Pittsburgh, Pennsylvania as a case study for wide bank lending disparities

Abstract

Racially unequal home mortgage loan patterns are alive and well today with many financial institutions. Efforts to change these trends are difficult when few question the ‘reinvestment thesis’—an environment in which financial institutions are assumed to meet community needs, even when data suggest the opposite. In this article, we analyze thirteen years of financial institution lending data from 2007 to 2019 in Pittsburgh that show how the city’s African American neighborhoods are starved for private capital as vastly more loans and loan dollars were approved in white neighborhoods. Conversely, an analysis of public expenditures for affordable housing between 2010 and 2020 demonstrate the majority of government dollars went to minority neighborhoods. These data provide a partial explanation as to why Pittsburgh lost > 10,000 Black residents over the past decade. These wide disparities are a significant barrier to building African American wealth and present challenges to community development efforts.