Between now and 2028, Los Angeles will decide where billions of dollars go. Olympic procurement, development deals, infrastructure buildouts – the contracts are being shaped right now by lenders, developers, public agencies and anchor institutions across the region. Before those calls get made, I’d ask the people making them run two sets of numbers: what this region already spends every year managing the consequences of South Los Angeles’ exclusion from capital, and what it would earn if that changed?
Most conversations about South Los Angeles, and about historically disinvested communities anywhere, begin with what is owed: the moral debt, the historical wrong, the case for repair. Moral arguments move people of conscience, and South L.A. has never been short on people who care. But capital does not run on conscience. Capital runs on returns. This is not a moral dilemma. It is a math problem, and Los Angeles has been getting the math wrong for decades.
The bill we are already paying
Disinvestment is not an abstraction. It is an expense this region pays every year, spread across city and county budgets.
Consider what economic exclusion costs. Safety-net spending flows to households whose earnings never reach the threshold at which public support is no longer necessary. Enforcement and emergency response clusters in the neighborhoods where economic opportunity thinned out first. The commercial tax base erodes corridors that could generate property and sales tax revenue instead of facing vacancies, deferred maintenance and undervalued parcels. And the region absorbs the cost of an under-activated workforce: residents whose productive capacity is real, but who are stranded below their earning potential by a lack of capital, credit and access.
Every one of those is a recurring expense, absorbed into county and city budgets as the ordinary cost of doing business in Los Angeles. They are the compounding interest on decisions, redlining, credit exclusion and systematic capital diversion, that were made deliberately and have never been unwound. Like any compounding cost, the bill grows the longer it goes unaddressed.
A region that pays indefinitely to manage the symptoms of exclusion is stuck ordering the most expensive option on the menu
Stability is the return
Flip the ledger and the case becomes clearer. When a South L.A. business gets capital, it expands. The region gains a taxpayer, an employer and a commercial tenant filling a storefront that was generating nothing. When a household moves from precarity to stability, demand for safety-net benefits falls and consumer spending rises. When a commercial corridor activates, property values rise for existing owners; sales tax revenue climbs, local dollars circulate and the surrounding blocks steadily improve.
These are measurable fiscal returns that accrue to the city, the county and every business operating in the regional economy. South L.A. is where those returns run largest, for a simple reason: the gap between current performance and potential performance is widest where capital has been most systematically withheld. Tens of thousands of small businesses already operate in this corridor, built and sustained by Black and Brown owners who created enterprises and jobs under conditions that would have closed businesses elsewhere. They are performing under constraints. Remove the constraint, and the output rises. That makes South L.A. the highest-return fiscal intervention available to the L.A. region.
Displacement is self-defeating
When investment prices out the businesses and residents who built the corridor, it removes the very people whose stability was supposed to generate the return. The region captures no dividend. It simply relocates the instability, pushing the same households into the same precarity a few miles away, where the same safety-net costs, enforcement costs and eroded tax base reassemble under a different ZIP code. The corridor looks better. The regional balance sheet stays exactly where it was. This is the math most investors get wrong.
This is not a call to buy the block. It is a call for capital to partner with the businesses and community institutions already here. These partnerships compound returns instead of relocating costs. In practice, that looks like financing that lets a current business owner expand instead of selling. Commercial real estate structured so the community holds the equity instead of watching it exit. Procurement that routes regional spending to vendors already rooted here. Lending that moves through the corridor’s own CDFIs, institutions built to serve the Black and Brown owners that conventional credit, shaped by decades of redlining, still screens out.
That is the line between investment and extraction. Partnership capital grows what the corridor produces: payrolls, storefronts, tax revenue, stability that compounds year over year. Displacement capital creates nothing new. It just decides who absorbs the loss.
Underwrite the corridor
VSEDC has anchored the corner of Vermont and Slauson for more than four decades, long enough to see every kind of capital come through: the developers who bought and flipped, the lenders who arrived and retreated, the partners who stayed and built. Four decades of watching those deals unfold teaches you what actually separates them. The investments that lasted were not always the biggest. They were the ones that were structured so the community still owned something when the deal was done.
That is the test worth applying to every dollar this region moves, every development deal, every procurement contract, every lending decision: when it closes, does the community own anything? If the answer is yes, the investment compounds for the corridor and for the region’s books alike. If the answer is no, Los Angeles is paying to relocate one of its most expensive problems one more time.
The most expensive thing in this region is exclusion. The highest return refused to it is partnership. From where I sit, that is not a values problem. It is a math problem, and the numbers have been waiting 50 years for someone to run them.
Jazz Keyes is president and chief executive of Vermont Slauson Economic Development Corp., a community development financial institution serving South Los Angeles for more than four decades.
