The D.C. Council on Tuesday unanimously approved legislation that creates “baby bonds” for children born into low-income families. Under the Child Wealth Building Act, every qualifying child would start with a publicly funded trust of $1,000, with contributions of up to $2,000 a year thereafter, depending on their family income. The bill was introduced by Ward 5 Council member Kenyan McDuffie, who said the bonds will help bridge the city’s racial wealth gap. Researchers have found that, in 2013 and 2014, the average white household in the District had a net worth of $284,000, 81 times the average Black household’s net worth of $3,500. Once the child turns 18, they’d have access to up to $25,000 to help buy a home or a business, create an investment account for retirement, or pay for education.

Earlier, @charlesallen joined the full Council to pass into law the creation of baby bonds for District children, intro’d by @kenyanmcduffie. Aims to close the racial wealth gap by ensuring when a child turns 18, they have money to help them succeed. This is a big deal. pic.twitter.com/gP7nuoyIcR

— CM Allen’s Team (@CMCharlesAllen) October 19, 2021

The bonds will cost about $32 million over the next four years. The bill goes to Mayor Muriel Bowser for her signature.