JPMorgan Chase Launches $125 Million, Five-Year Initiative to Drive Economic Opportunity in Disadvantaged Neighborhoods
JPMorgan Chase & Co. today launched PRO Neighborhoods, a $125 million, five-year initiative to identify and support solutions for creating economic opportunity in disadvantaged neighborhoods around the country. The new initiative will invest in collaborative partnerships and innovative financial solutions to revitalize neighborhoods by growing small businesses, creating health and social service facilities, improving access to affordable housing and collecting better data to study changing neighborhood demographics.
“Thriving neighborhoods are critical to the long-term economic success of our cities and to addressing many of the major barriers to economic mobility for low-income families. PRO Neighborhoods provides local leaders with the tools and resources they need to ensure that opportunities to prosper are extended to distressed neighborhoods and the people who live there.”
Janis Bowdler, Head of Community Development for Global Philanthropy, JPMorgan Chase
As the economy recovers, much of the growth is often channeled toward reviving commercial corridors and downtowns in U.S. cities. As a result, many disadvantaged neighborhoods, where low-income people live, are being left behind. Building on the lessons of a $33 million pilot program to support low-income communities, PRO Neighborhoods will help create more widely shared prosperity by providing the necessary capital to local community development organizations to address the drivers of economic opportunity in neighborhoods. Specifically, the initiative will include three areas of focus:
Collaborative Community Development Financial Institutions (CDFIs) Partnerships: Too often, projects that can provide essential economic resources and social services to distressed neighborhoods are unable to qualify for traditional financing. PRO Neighborhoods aims to break down this barrier by providing regional CDFIs with necessary capital that encourages them to work together so they can pool resources and expand lending activities for building health and education facilities, opening retail centers and supporting community services in area neighborhoods. These CDFIs will use the philanthropic investment from JPMorgan Chase to leverage additional capital to bring neighborhood development projects to scale. New investments will be announced in October, 2016
Affordable Housing Seed Capital: As public subsidies for housing decline, there is a critical need to identify new and innovative financial tools to help make affordable housing more widely available. PRO Neighborhoods will support the development and preservation of housing for low- and middle-income families. This resource will provide critical seed capital to enable local partners to acquire, refurbish, and provide affordable housing in communities that are at risk of gentrification.
Data-Driven Neighborhood Solutions: Armed with high-quality data about land use, housing trends, and shifting demographics, PRO Neighborhoods will dedicate funding to research that helps cities better understand the most urgent problems facing disadvantaged neighborhoods. This research will help local community development organizations better understand the implications of demographic shifts and help cities become smarter about what strategies work best and where to apply local support.
“As the global economy evolves, there are no more urgent challenges facing our country than the need for increased economic opportunity and more widely shared prosperity that reaches across communities. CDFIs can play a key role in this effort and JPMorgan Chase's PRO Neighborhoods creates a model for success that can and should be replicated throughout the country.”
Henry Cisneros, former mayor of San Antonio, Texas, the 10th Secretary of Housing and Urban Development and Chairman, CityView and Chairman of the Executive Committee at Siebert Brandford Shank & Co., L.L.C.
Informed by $100 Million Detroit Commitment
The focus on helping disadvantaged neighborhoods is informed by JPMorgan Chase’s $100 million, five-year commitment to Detroit’s economic recovery, through which the firm is devoting significant resources to furthering economic opportunity in key Detroit neighborhoods outside the city’s urban core.
For example, JPMorgan Chase is supporting a $6.5 million Entrepreneurs of Color Fund through a local CDFI to expand access to capital for Detroit’s minority-owned small businesses. This fund is boosting economic opportunity for minority-owned businesses, focusing on general contractors, small retailers and other neighborhood service businesses, by providing financing to those who traditionally have lower credit quality and lack access to capital. Additionally, JPMorgan Chase provided $1 million to support the Motor City Mapping Project in Detroit, which tackles neighborhood blight by allowing the public to help catalog the location and types of vacant and abandoned properties so that they can ultimately be sold, rehabbed or removed.
Measuring the Impact of PRO Neighborhoods
According to an impact assessment by The Harvard Joint Center on Housing Studies, JPMorgan Chase’s 2014, $33 million PRO Neighborhood pilot program focused on disadvantaged neighborhoods allowed 26 CDFIs to raise more than $226 million, seven times the original amount, in additional capital for local economic and social service projects. This has resulted in $100 million in loans, financing first-time home purchases, the preservation and development of over 2,000 units of affordable housing, lending to over 130 small businesses and creating and retaining 2,650 jobs.
“Through PRO Neighborhoods, JPMorgan Chase has enabled CDFIs to strengthen their balance sheets, expand their lending activities, and manage costs and risks while increasing scale. The financial support enabled these CDFIs to leverage hundreds of millions in additional capital, giving them far greater ability to increase the flow of capital that these communities desperately need.”
Chris Herbert, Managing Director, Joint Center for Housing Studies, Harvard University
“I applaud JPMorgan Chase for empowering collaboration among our local leaders and increasing economic opportunity through the Partnership for Raising Opportunity in Neighborhoods. In Kentucky, we have seen the success and expect that last year’s $2.6 million investment in the PROsper Kentucky collaborative is being used to leverage millions of dollars in additional capital to create jobs and provide critical affordable housing in our community.”
Rep. Andy Barr (R-KY)
Other Notable Statements of Support
“Better connecting all East Bay residents to the job centers of this region is central to the equitable growth of Oakland and a major reason for creating the new Bus-Rapid-Transit line. But to fully realize the vision of this project, with the help of JPMorgan Chase we are working to ensure the continued prosperity of the businesses that historically have been the lifeblood of the International Boulevard corridor – during and after construction.”
Libby Schaaf, Mayor of Oakland
“As inequality grows, cities are reaching for new solutions to foster inclusive recovery that benefits all neighborhoods, including those that often get left behind. With public resources scarce, the private sector is stepping in to make important local investments. JPMorgan Chase's PRO Neighborhoods is a promising example of a tailored, local solution that can attract additional investment and has the potential to create meaningful change where it is most needed.”
Sarah Rosen Wartell, President, Urban Institute
“CDFIs are uniquely positioned to drive capital where it can have the most impact and work every day to ensure that people and communities have access to affordable, responsible financial products and services. Through PRO Neighborhoods, JPMorgan Chase is catalyzing innovation and collaboration among CDFIs so that together they can exponentially increase their impact in disinvested neighborhoods across the country.”
Mark Pinsky, President and CEO, Opportunity Finance Network
“PRO Neighborhoods identifies and implements effective strategies to assist low-and moderate-income families to become more financially stable and their communities to become more vibrant and economically inclusive. Center for Community Capital is pleased to contribute to JPMorgan Chase’s effort through our opportunity index, which will provide a deeper understanding of how place and opportunity intersect.”
Roberto Quercia, Director, UNC Center for Community Capital
“Segregation and economic isolation have a profoundly negative impact on all families and particularly for communities of color. Changing this dynamic requires breaking down barriers to economic mobility within neighborhoods and providing families with the opportunity to live near good schools, well-paying jobs, and access to health care. In launching PRO Neighborhoods JPMorgan Chase is investing in innovative solutions to some of the biggest barriers to economic mobility in the U.S.”
Raphael Bostic, Judith and John Bedrosian Chair in Governance and the Public Enterprise, University of Southern California
“Just as equity must drive policy decisions, it must live at the heart of neighborhood development. Through PRO Neighborhood, JPMorgan Chase is empowering community leaders to collaborate, share resources, then identify and address the key drivers of inequality.”
Angela Glover Blackwell, President and CEO, PolicyLink
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at JPMorganChase.com.