Bread, a used car, energy, and raw lumber. What do those things have in common? Rising prices.
COVID-19 had already strained the supply chain over the past two years, partly triggering the inflation we’re seeing today. Now, Russia’s atrocities in Ukraine, China’s lockdown of more than 50 million people, sanctions on Russia, labor shortages and climbing oil prices are pushing the prices of goods and services even higher. High-wage earners will reconsider large purchases and examine investments to cope with rising prices. But how will the communities we serve be impacted by inflation?
A recent story in The Washington Post highlights just how unequal the impacts of rising prices are for people with lower incomes and already tight budgets.
“Nearly all their expenses go to necessities — food, energy, housing — which have seen some of the largest increases at different points over the past year. Of the 10 categories with the highest levels of pandemic inflation analyzed by The Washington Post, lower earners spent a greater share of their total spending on most of them…”. In short, low-income communities are deeply connected to the global economy, and inflation is the most regressive tax of all.
Shelter, groceries and utilities are the top three categories for which low-income Americans are spending more. Our work to enhance affordability in each of those categories is more important than ever.
With about 40 percent of BlueHub Loan Fund’s investing dedicated to housing, we’re keenly aware of the need for more affordable housing stock. In particular, we’re providing more and more predevelopment financing, which is hard to come by, for affordable housing projects in low-income communities. As the federal moratorium on foreclosure ends, we’ve reopened mortgage lending for families facing foreclosure through BlueHub SUN.
BlueHub Loan Fund’s recent $4.2 million Healthy Food Financing Initiative-Financial Assistance award from the US Treasury’s Community Development Financial Institution Fund will help us increase access to fresh, affordable food in communities where disproportionately large percentages of residents struggle with food insecurity.
And BlueHub Energy is exploring new ways to harness clean energy in low-income and environmental justice communities, ensuring that the people most impacted by climate change are able to access low-cost energy sources.
There’s a lot to do. But we’re ready for the challenges ahead.
-Elyse Cherry, CEO of BlueHub Capital