Small Businesses Contribute to our Communities

Small businesses provide employment opportunities to local residents, growth in the local economy, and add to the improvement of our neighborhood. Unfortunately, the coronavirus pandemic has forced at least 15,000 small businesses in LA to close. At least half have closed permanently.


To protect the local economies of our neighborhoods, the city of Los Angeles has a responsibility to keep small businesses afloat throughout the duration of this crisis.

The Consequences of Institutionalized Racism

However, we cannot go back to “business as usual” once the pandemic is under control, because the playing field for entrepreneurship disproportionately leaves out entrepreneurs of color. 

Owning a small business is one of the major ways communities of color can build wealth for their family and generations to come.

The racial wealth gap between communities of color and white households is large and growing. However, it is the result of historical institutionalized racism.


18th - 19th Century

Communities of color have been trying to build generational wealth for decades, but those efforts have constantly been interfered with largely by the government. More than two centuries of chattel slavery set Black people behind by the end of the 19th century. Black codes and Jim Crow laws that followed restricted the economic, political, and social rights of the Black community. 


20th Century

During the Great Depression, President Hoover’s Mexican “Repatriation” Act of the 1930s used people of Mexican descent as a scapegoat for the loss of jobs in communities throughout America. Millions of Mexicans and Mexican-Americans were deported to Mexico resulting in the devastation of local communities, loss of Mexican-owned small businesses, and a decrease in the local economies of neighborhoods.

President Roosevelt used the tools of the federal government to further institutionalize racial discrimination. Under his administration, the Federal Housing Authority (FHA) chose not to guarantee mortgages for African Americans who tried to buy homes in majority-white neighborhoods. As a result, Black and other communities of color did not get to participate in the economic growth that came after the Great Depression.





Furthermore, in any neighborhood or metropolitan area where Black folks lived or lived nearby, the region was colored red (also known as redlining) to indicate that these neighborhoods were too risky for home buyers and investors. The FHA used a baseless claim that Black folks lowered property values. In reality, Black homebuyers increased property values in majority-white neighborhoods because they were willing to pay more due to the lack of access to low-interest home loans.



Nevertheless, the restriction of housing and economic opportunities has resulted in generational disadvantage, regional segregation, and economic inequality we can see today on racial lines.

Today, the income of Black households is about 60% of the average white household. However, the mean and median wealth of Black households is less than 15% of white ones. The wealth of Latino households is less than 20% of white households.


The lack of wealth and capital means that it's much harder for communities of color to get the assets they need to start a business. In order to build back our communities, which historically have been neglected, we need to invest in our neighborhoods and that includes local small business owners and aspiring entrepreneurs of color.

Supporting Small Businesses

As your Council Member I will:

  • Direct investments towards small, local businesses owned by entrepreneurs of color

  • Support street vendors

  • Increase access to credit for small businesses

  • Increase access to fair small business lenders so that all small business owners and entrepreneurs have a fair playing field

  • Support a rent and eviction moratorium for small businesses for the duration of the pandemic

Figure 1: A 1939 map of redlined neighborhoods in Los Angeles (Source: KCET)

Small businesses contribute to the vitality of our local communities and neighborhoods. It’s time we support the backbone of our local economy.

Supporting Small Business Feedback & Suggestions

Thanks for submitting!