The Case for Reclaiming Capital

Every year, state and local governments raise hundreds of billions through municipal bonds—debt instruments that fund schools, roads, water systems, and transit projects. In 2025 alone, U.S. municipal bond issuance hit $338 billion, up nearly 18% from the prior year, with outstanding debt exceeding $4.2 trillion. Yet for all that investment, Black communities rarely benefit as bondholders. Too often, residents are the ones paying for these projects through taxes and fees—while institutional investors collect the returns. What if Black neighborhoods could capture some of that value instead of watching it flow away?

What Municipal Bonds Are—And Why They’re Overlooked

Municipal bonds, or “munis,” are issued by cities, counties, and public agencies to fund infrastructure. They’re typically tax-exempt, low-default, and historically safe. There are two main types: general obligation bonds (repaid with tax revenue) and revenue bonds (repaid with income from a specific project, like tolls or utilities). For decades, munis have been a steady, low-risk investment favored by wealthy households and institutions. But for many everyday residents—especially in Black neighborhoods—they’re an afterthought, if they’re even aware of them at all.

The Invisible Cost to Black Residents

Here’s the irony: when a bond finances a stadium, water plant, or new transit line in a majority-Black neighborhood, the local tax base helps repay it—but the profits flow to outside investors. That’s money leaving the community with no return trip. Nationally, households hold only 8.2% of their liquid financial assets in bonds, compared to 54.5% in equities and 17.1% in mutual funds. For Black households, the share is even smaller. The result? Residents shoulder the cost of civic improvement without sharing in the wealth it generates.

“We’re paying for the ribbon-cuttings, but we’re not invited to the payout meetings.” — Monique Ellis, Baltimore community organizer

The Barriers Blocking Access

Three structural issues keep muni bonds out of Black portfolios:

• High minimum buy-ins: Many municipal bonds are sold in $1,000–$5,000 increments—too high for some households to participate.

• Limited marketing: Brokerage firms rarely promote muni offerings in communities of color.

• Trust deficits: Decades of broken promises around urban development have left residents skeptical of city-backed investments.

Without intentional reform, muni ownership will remain an insiders’ market.

Proven Models for Community Participation

Some cities have already experimented with more inclusive models:

• Denver & Madison “Minibonds”: Sold directly to residents in smaller denominations, often under $500.

• Berkeley’s Blockchain Pilot: Proposed using blockchain to cut issuance costs and allow micro-investments.

• UK Community Municipal Bonds: Starting at as little as £5, allowing residents to invest in local renewable energy projects.

For Black communities, these models could be adapted with low-dollar entry points ($100–$250), resident-only purchase windows, and partnerships with trusted local institutions—churches, credit unions, and HBCUs.

Making Projects Profitable for Residents

It’s not enough to participate—we should profit. That means focusing on revenue-generating projects where interest payments come from project income, not just taxes. Think renewable energy systems, broadband infrastructure, parking garages, or water utilities. Residents could receive:

• Interest payments at competitive yields (AAA-rated muni bonds currently average 3.3%, or 5–7% taxable equivalent for high earners).

• Reinvestment credits—reduced utility bills or service discounts for bondholders.

• Dividend-style payouts tied to project surplus revenue.

Done right, this creates a closed-loop system where community dollars return with interest.

Policy, Advocacy, and Ground Partners

To make this real, Black leaders should push for:

• Resident-preferred allocations in muni bond sales.

• Partnerships with Black-owned broker-dealers to underwrite and distribute bonds.

• Coordination with CDFIs to develop community-first muni programs.

This isn’t just finance—it’s political strategy. Changing the rules of muni access requires advocacy in city halls, state legislatures, and community boardrooms.

“If we can buy stock in companies we’ve never met, we should be able to own the projects built on our own block.” — David Harper, municipal finance attorney

A Vision Worth Investing In

Imagine a renovated recreation center, solar-powered and debt-free—financed partly by the people who use it, and paying them back every year. Imagine broadband expansion in a rural Black county, owned in part by local families. Municipal bonds can be more than an obscure line in a Wall Street portfolio—they can be a community wealth engine.

For too long, we’ve been the subjects of development but not the owners of it. The muni market is already here. The money is already moving. The only question is whether we’ll design a system where our neighborhoods don’t just fund the future—they own it.