Wealth inequality is greater than income inequality, and potentially more devastating. Wealth translates into security and advancement, while lack of wealth can handicap economic mobility and leave families exposed to financial risk. The Great Recession worsened the wealth gap, especially for younger Americans and communities of color. The federal government spends billions to support long-term asset development, but these funds largely miss those who need help most. We examine how existing policies can be more inclusive and how new policies can remove barriers to building wealth.
Millions of Americans, especially those with low incomes, use alternative financial sector loans, such as payday loans, car title loans, and refund anticipation loans, to meet their short-term needs. These loans often start out small but can add up to significant debt burdens and can undermine a family’s ability to build assets. Our research reports on the benefits and risks of these loans, who uses them and why, and how to meet the credit needs of low-income families.
Owning a home is associated with many benefits, but the recent foreclosure crisis has shown that many policies implemented to increase homeownership rates are not sustainable and may have done more harm than good. Homeownership programs with long-term affordability controls present one potential solution. These programs provide homeownership opportunities to income-eligible families who buy homes at below-market prices. The appreciation that can be earned by resellers is limited to preserve a home’s affordability at resale.