About This Project
In 2022, we joined the Bond Markets and Racial Equity Project, led by the Public Finance Initiative, in collaboration with other national partners to support governments and other stakeholders who want to leverage municipal bond markets as a catalyst for changing racially inequitable conditions. This website includes tools and other resources we created together throughout this program, and features strategies from select cities we’ve engaged with and worked with in this program. The project is supported by the Robert Wood Johnson Foundation, but the views expressed are those of program team members and participants.
Scorecard
The Municipal Bond Racial and Social Equity Scorecard is a technology tool designed for the program by the Urban Institute to help issuers and borrowers document, self-assess, and summarize the potential racial equity and social impacts of proposed bond issuances. The scorecard’s results can encourage issuances that promote racial and social equity, strengthen communities, and benefit residents.
Framework
Created by the Public Finance Initiative, the Framework on bond markets and racial equity makes clear how practicing and realizing racial equity can be achieved in different ways across the different phases of the bond issuance process, and supports issuers in articulating, benchmarking, and strengthening their practices, and optimizing key outcomes and intents.
City Summit Session
Bridging Racial Equity: Transforming Communities with Municipal Bonds
Join our panel discussion at City Summit, November 13-16 2024 in Tampa Bay, Florida, with cities from the Racial Equity and Bond Markets cohort, sharing their experiences in using finance to address racial inequities. The panel will highlight strategies from the Bond Markets & Equity framework, developed by the Public Finance Initiative. The program is supported by the Robert Wood Johnson Foundation, but the views expressed are those of program team members and speakers.
Research
Map Description
This map highlights the diverse range of cities that have participated in the Racial Equity and Bond Markets (REBM) program. These participants have engaged with the program through a variety of channels, including panel discussions at the NLC City Summit and NLC Congressional City Conference, NLCU courses, and involvement in webinars. Additionally, cities from the 2023 and 2024 REBM Cohorts of the program are represented here.
CitiesSpeak Articles
Prioritizing Racial Equity in Municipal Bond Markets
As the United States has reckoned with systemic racism in its cities, practitioners and policymakers have wondered how the $3.8 trillion municipal bond market addresses—or fails to address—race and equity. The municipal bond market is one of the largest pools of private investor capital flowing into America’s states and localities, shaping the character of the built environment and directly impacting the social determinants of health and equity in communities.
Key Practices for Advancing Racial Equity Frameworks in Municipal Bonds
Every year cities, towns and villages throughout the nation issue bonds to fund capital projects for affordable housing, water, sewer, education, sidewalk repairs, economic development, and other areas. As municipalities strive to make progress in addressing issues of racial equity among residents they often find themselves looking for new ways to integrate racial equity into their current practices, including when they access the capital markets. Integrating a racial equity lens to municipal bond investments that fund infrastructure at scale can potentially serve as a powerful intervention for historically underserved groups—especially residents of low-income communities and racially and ethnically diverse neighborhoods.
How City Leaders Are Using Public Finance for Racial Equity
Due to unprecedented federal investments through bills like the American Rescue Plan Act (ARPA), many city leaders started to center equity and racial equity in novel ways in their approach to federal aid, expenditure decisions, and public finance. Many cities and jurisdictions have also been using municipal bonds and other public finance tools to advance and accelerate equity outcomes. What’s unclear is: what practices and trends are emerging across the country?
Featured Cities
While we practiced Chatham House rules, the featured cities listed here allowed us to include their stories in our resources to share as examples for their peers.
Chandler, Arizona
The City of Chandler, Arizona, serves as an example of how models of community engagement can center equity in targeted ways to elevate the voices of residents in major infrastructure improvements. Most recently, the city’s volunteer committee supporting community engagement welcomed 49 participants representing diverse and unserved communities. The volunteers carried out community engagement processes that sought to include and integrate public feedback at these levels: the authorization of the bond measures, feedback for infrastructure projects, and targeted feedback on equity needs. Subcommittees engaged in the noted work were also tasked with going into neighborhoods around the city to generate a conversation around the capital projects under consideration and gathering feedback from Black, Latino, Asian, indigenous and other populations of color and residents who historically had low rates of participation and engagement.
Las Cruces, New Mexico
The City of Las Cruces, New Mexico integrates an equity lens to guide how they spend the investment earnings generated from bond proceeds. Often bond proceeds are kept in interest bearing accounts, pending their use on the project (i.e., during a construction period, etc. and subject to any restrictions under state law or the Internal Revenue Code provisions governing a bond issuance). The City of Las Cruces manages a competitive process where they enable residents and organizations to submit applications to be awarded funding for programs that address resident needs from investment earnings. In the past, Las Cruces has funded shelters for homeless teens, purchased properties to address affordable housing for residents, and other purposes that further the city’s values using investment earnings from bonds.
Athens, Ohio
Over the past three years the City of Athens, Georgia has made strides to expand an investment strategy that centers equity through different public finance strategies including via the use of Community Development Block Grant revolving loan funds to produce low-interest loans for women and minority-owned businesses. The city invests in incubating startups owned by minority and women entrepreneurs and other efforts.
Grand Prarie, Texas
The City of Grand Prairie, Texas adopted a Diversity, Inclusion, Justice and Equality Resolution establishing comprehensive Diversity, Inclusion, Justice, and Equality principles that set a foundation for the future development of programs and services designed to explore, understand, celebrate and embrace the differences across the city’s residents and to implement several programs to close racial equity gaps. Grand Prairie has also integrated equity practices to its procurement and contracting programs, with a targeted goal of increasing city contracts that are awarded to minority-owned businesses. The noted practices, when extended to infrastructure or public finance decision-making, can be meaningful foundations for creating a bond markets strategy that centers equality as a value.
Madison, Wisconsin
The City of Madison, Wisconsin’s Racial Equity & Social Justice Initiative via a resolution, established racial equity and social justice as core principles within the City. The city has trainings, tools, and teams to instill and operationalize these values across different areas of governance. Foundational to this work has been a host of trainings on racial equity delivered to staff and policy makers to help staff and policymakers incorporate racial equity in policy making, project development, budgeting, hiring and public participation. The city is also solidifying its Department Equity Teams to enhance equity in collaboration with Neighborhood Resource Teams and to stay abreast of the priorities of residents most impacted by racial inequities.
Racial Equity & Bond Markets Inaugural Cohort Cities
The inaugural cohort brought together government leaders to receive free technical assistance – a first-of-its-kind opportunity for municipalities and other bond issuers and borrowers who wanted to enhance how they center racial equity in a bond issuance.
Saint Paul, Minnesota
Saint Paul, Minnesota launched an innovative tree-planting program funded by an $18 million sustainability bond to address the equity disparities in tree canopy coverage between affluent and minority neighborhoods. This initiative, which aims to plant 13,000 trees while prioritizing communities of color, also includes job training for local youth in tree care. Recognized as a sustainability project of the year by Environmental Finance, the program underscores the city’s commitment to equitable tree distribution and environmental justice. To track and report the program’s impact, Saint Paul joined the cohort to create a robust framework for voluntary disclosure.
Atlanta, Georgia
Atlanta, Georgia has issued a $369 million social bond to fund improvements in parks, roads, and public amenities in low-income neighborhoods and communities of color, aiming to enhance the well-being of historically underserved residents. The bond issuance garnered national recognition. In our program, Atlanta began developing a strategy to use spatial data to measure and report on progress on racial equity outcomes to investors in the deal over the life of the bond issuance.
Chicago, Illinois
The City of Chicago, Illinois received a $1.887 billion allocation from the State and Local Fiscal Recovery Fund of the American Rescue Plan (“SLFRF”) to respond to the negative impacts of the COVID-19 pandemic. After engaging in extensive community engagement, the city of Chicago developed a recovery plan to guide the expenditure of its SLFRF allocation focused on making investments in the well-being of people, communities, and equitable economic recovery for neighborhoods hardest hit by the pandemic. To amplify the SLFRF federal funding opportunity, the City of Chicago issued a $660 million general obligation bond to raise additional funding to catalyze equity-based investments in the recovery plan. Many of the projects and strategies in the City of Chicago’s recovery plan are anchored in the racial justice principles identified by the City’s Office of Equity & Racial Justice, which seeks to advance institutional change that results in an equitable transformation in how the city does business, and strives to achieve equity. The City of Chicago joined our program to continue to receive support examining how to expand their equity focused strategies to new areas of public finance.
Bloomington, Minnesota
The City of Bloomington’s efforts to address racial equity and inclusion have a long history, with equity emerging as a strong theme in the strategic plan the city adopted as early as 2016, and with the hiring of a racial equity coordinator, among other efforts. At present, each city department has a racial equity action team to lead this work within the ranks. While these actions put Bloomington ahead of its peers in addressing equity, city officials have not really told that story to the bond market before and joined this program to help develop new practices in their municipal bond issuances.
Dallas, Texas
The city of Dallas has a long-standing Racial Equity Plan that, together with other practices, policies, and efforts, demonstrates the City’s commitment to investing in communities that have been at a historical disadvantage. In 2024, the City was preparing a $1.25 billion bond package to finance hundreds of projects, from housing to sidewalks to libraries, and they wanted to make sure all residents had a voice in deciding what to spend the money on. They adopted a new expanded community engagement strategy that centered equity to educate residents on municipal bonds, with an innovative and inclusive strategy where under-represented residents could learn about the bond issuance, and the city’s experience as a bond issuer more broadly.
Learn More
Launched in 2022, the Bond Markets and Racial Equity Project is a bold effort to center equity in municipal bond-funded investments and to measure how social determinants of equity change over time.