GroundBreak Coalition Shares Progress Toward Ambitious Vision During Community Briefing

GroundBreak, launched in May 2022, aims to transform financial systems through a nation-leading effort to expand opportunity and shared prosperity. Unlike a traditional joint fund, GroundBreak is working to fundamentally change how capital flows within a region, building on proven financial tools and strategies, deep collaboration across philanthropic, financial, corporate, and public institutions, and collective investments.

Ahead of the community gathering, the coalition released a report outlining its progress and detailing its early commitment of $926.75 million for financial tools and products that are expected to be available in the region by the end of 2024.

Many Organizations, One Shared Goal

“GroundBreak has come a long way since we gathered here 18 months ago. Our government partners, our for-profit partners, our community partners, are all working together with one vision and one goal for our Minnesota communities—that all are valued and thrive.”– TRISTA MARTINSON, RAMSEY COUNTY

In 2022, over 170 individuals and 120 organizations participated in a six-month design process to identify financial tools and products that could help close racial wealth gaps in Minneapolis-St. Paul. As the coalition works on wealth-building strategies, it has focused on the experience of Black wealth builders who face some of the starkest wealth disparities. Today, Minnesota is ranked sixth worst in the nation for its racial wealth disparities, despite its relative prosperity and high average incomes. These disparities can be traced to historic policies and practices that have extracted and limited wealth-building opportunities, including generational wealth transfers through homeownership. Approximately 77% of white households are homeowners in Minnesota today. In contrast, 29% of Black households in Minnesota own their own home, and that figure is less than 20% in Minneapolis. This has not always been the story. In 1950, 46% of Black households in Minnesota were homeowners.

In addition to homeownership, GroundBreak is also leading similar work—combining different types of capital to bridge gaps and make more financing available—to bolster Black-owned businesses and neighborhood commercial developments. The coalition is also exploring affordable rental housing development opportunities.

A New Transformational Financial System

“This is life-changing. The system is going to shift, to change lives and communities. This is transformational, so people can fulfill their dreams and aspirations.”– SUSAN BASS ROBERTS, POHLAD FAMILY FOUNDATION

GroundBreak’s approach uses well-known tools, like special purpose credit programs provided by financial institutions and low-cost capital and grant pools often led by philanthropic organizations and other investors. GroundBreak identified that by creating a new financial system for the region, institutions could enable a large amount of capital to intentionally flow toward financial tools and products for aspiring homeowners, entrepreneurs, and commercial developers. Through the innovation, every $1 in flexible capital can unlock over $3 in private-market capital.

Collaboration for the Greater Good

“Competition is great for creating change, but collaboration for the greater good of the community is an unbeatable combination. That’s why we are so excited to be a part of GroundBreak.” – Tim Welsh, Vice Chair of Consumer and Business Banking, U.S. Bank– TIM WELSH, U.S. BANK

At the event, Welsh and other leaders discussed the coalition’s work on homeownership. Early opportunities emerged for the group after the state’s historic legislative session where lawmakers invested over $1.3 billion in housing. Approximately $175 million in state funding for first-generation homebuyers along with Minnesota Housing mortgage lending can be harnessed to advance GroundBreak’s goals.

Leaders shared specific progress on a regional GroundBreak mortgage product that would allow financial institutions to offer the same or similar special bank loans with flexible underwriting. For homebuyers, this means a set of banks across the region would expand eligibility for loans by adopting less stringent methods of assessing risk such as high credit scores and personal wealth. By creating a GroundBreak-endorsed mortgage product, institutions aim to standardize the experience of applying for a loan and create more trust and transparency for homebuyers.

Action by financial institutions will be paired with capital provided by philanthropic institutions and other partners to address a common barrier to homeownership: people need cash for down payments and closing costs.

What was the overall takeaway from the community briefing? That this is the beginning of a durable partnership that builds on our rich, regional history of investment in the common good. The beginning of a new future in which every resident of Minneapolis-St. Paul can thrive. A future in which our region emerges as a national beacon for racial equity and climate readiness.

More Photos from the Event