The Newark Municipal Council voted this week to invest $2 million in the New Jersey 40 Acres and a Mule Fund (NJ FAM Fund). It is an investment fund targeted to address the wealth, health and social disparities that exist with Black and Latinx communities when compared to the general population.
This first-in-the-nation investment vehicle makes equity and debt investments in Black and Latinx businesses in New Jersey. The $2 million contribution is earmarked specifically for Newark investments.
“While the racial wealth gap is a major national issue, it especially impacts Newark,” said Newark Mayor Baraka. “Black and Latinx businesses have always faced more roadblocks than their counterparts and the pandemic only made things worse. These investments will be a tremendous tool for them in Newark, and I am incredibly grateful for the generous support of our Municipal Council.”
According to the New Jersey Institute for Social Justice, the median household wealth of New Jersey’s white families is $322,500, while the medians for New Jersey’s Latinx and Black families are just $26,100 and $17,700, respectively—one of the worst racial wealth gaps in the nation. The objective of the NJ FAM Fund is to close these gaps by giving Black and Latinx business owners access to more capital and resources.
The NJFAM Fund is the vision of Baraka and co-sponsored by the mayors of Paterson, Trenton, Camden, Atlantic City, East Orange, Orange, and Irvington. The Fund is seeking to raise $100 million to invest in value-added small businesses and real estate projects that will scale and reduce the wealth, health and social disparities that currently exist.
Bank of America has committed to invest $5 million. Additional funding commitments have come from companies and celebrities such as AT&T, Panasonic, RWJ Barnabas Health, and Shaquille O’Neal. In this short time, the fund has already received hundreds of proposals from local entities seeking funding for projects ranging from real estate development to local small businesses spanning multiple sectors.
The Fund’s first project is a partnership with United Community Corporation to build on 10 city-owned parcels in Newark’s Central Ward, each of them selected to transform that neighborhood and provide high quality homeownership on the block.
The project involves the construction of nine two-family homes and the rehabilitation of one two-family home, of which four homes will be set aside for residents that have incomes below 80 percent AMI. The project is in partnership with New Jersey Community Capital, the state of New Jersey’s largest Community Development Financial Institution.