DETROIT--(BUSINESS WIRE)--JPMorgan Chase & Co. today announced that it will expand the firm’s investment in Detroit’s economic recovery, committing to reach $200 million by the end of 2022. The announcement comes as the firm exceeded its initial five-year, $150 million commitment.
The new data-driven investment builds on the initial progress that helped boost the city’s recovery through the creation of sustainable loan programs for small businesses like the Entrepreneurs of Color Fund and increased access to affordable housing and job training, and targets the gaps in the city’s economic recovery.
Despite the city’s continued economic progress, a city made up of almost 80 percent African Americans, only 25 percent of Detroit households are considered middle class, according to Detroit Future City. JPMorgan’s new $50 million in philanthropic and business investments will help further break down barriers to opportunity so that more long-term residents of Detroit, especially black Detroiters, can access job training, become homeowners and grow small businesses.
“Too many people are being left behind, and we need to build an economy that works for everyone,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase. “Our new investment in Detroit will help the system work for more people – giving more Detroiters access to the tools they need to succeed, stay and benefit from Detroit’s continued recovery. A good education, the skills to secure a good job, a home, and the capital and assistance to start and grow a small business are some of the tools to creating opportunity and a society where everyone benefits. I continue to believe Detroit is an example to our country and the world of what can be achieved through cooperation to solve today’s biggest challenges. And that is why we continue to invest here and apply what we’ve learned here in other cities.”
Detroit is where JPMorgan Chase tested, developed and refined its proven model for driving inclusive growth in cities. The firm’s investment in Detroit yielded valuable insights that turned into new investments in other cities, including Chicago, Greater Washington and Greater Paris through an initiative called AdvancingCities. The program is a $500 million, five-year initiative focused on investing business and philanthropic capital in solutions that bolster the long-term vitality of the world’s cities — and the communities within them.
Investments Create Economic Opportunity in Detroit
Since 2014, JPMorgan Chase has invested $155 million in Detroit's economic recovery. This investment has made a significant impact, focusing on four main areas: jobs and skills training, neighborhood revitalization, small business growth and financial health. Specific results include:
- 15,469 Detroiters received services to improve their financial health
- 13,573 Detroiters participated in job training programs aligned with high-demand industries
- 5,111 businesses received capital or technical assistance
- 2,130 jobs were created or maintained
- 1,639 affordable housing units created or preserved
- 296,000 square feet of commercial space developed
- $290 million+ in additional, outside funding leveraged to support residential and commercial development in neighborhoods
“JPMorgan Chase stepped up to support Detroit at a critical time in our history,” said Detroit Mayor Mike Duggan. “There’s more work to do, and I’m glad JPMorgan Chase is expanding their investment in the Motor City. Their investment has proven to others that Detroit is a good bet.”
In addition to offering capital and philanthropic support, the skills and expertise of JPMorgan Chase employees has helped local nonprofits to solve challenges as part of its Detroit Service Corps. Over the last five years, JPMorgan Chase deployed 146 employees from 16 countries to work on 40 projects for 28 Detroit nonprofits, totaling 21,900 hours of pro bono support.
Also since 2014, JPMorgan Chase’s Community Development Bank Group has facilitated nearly $150 million in New Markets and Historic Tax Credit transactions and construction loans to affordable housing projects throughout Detroit for the development of 747 units of affordable housing, as well as grocery stores, schools and commercial space. The Community Development Bank intends to facilitate an additional $150 million to create affordable, sustainable neighborhoods in Detroit.
New $50 Million Commitment
Signs of economic progress in Detroit are clear -- the unemployment rate is down from 20 percent in 2013 to less than 9 percent in 2018 according to the Bureau of Labor and Statistics. For the first time in 17 years, home values have risen and mortgage lending is up. However, there is much work to be done to help long-term Detroiters share in the growth, and closing the wealth divide would benefit both long-term residents and the economy.
PolicyLink research found that, in 2015, Detroit’s regional economy could have been nearly $31.47 billion stronger had no racial gaps had existed in income. According to the same PolicyLink data, “people of color in the Detroit region as a whole are projected to see their incomes grow by 57 percent with racial equity. In the city of Detroit, people of color would see average gains of 30 percent.”
To give black families and more Detroiters more access to economic opportunity and upward mobility, JPMorgan Chase’s new, forward-looking investment will leverage the firm’s philanthropy and business activities, as well as the data and expertise of its employees, to support initiatives around four key areas:
Improving Access to Homeownership & Affordable Housing ($20 million)
Increasing access to affordable housing and homeownership is critical to helping Detroiters build wealth and have the ability to stay in their neighborhoods. Initiatives include:
- Partnering with Cinnaire, CHN Housing Partners (CHN) and Opportunity Resource Fund (OppFund), the firm will implement a lease-purchase pilot to help Detroit’s lower-income families achieve and sustain homeownership through the Low-Income Housing Tax Credit program. The investment will focus on phase one of the pilot to prepare 54 families to take title of their homes within the next three years (2019 – 2021). The firm previously supported this model in Cleveland, OH through a collaboration with CHN.
- Growing and preserving the supply of affordable, move-in ready homes in strategic neighborhoods by increasing access to capital for community development organizations and minority developers.
Boosting Black Entrepreneurs ($12 million)
Black entrepreneurs are far more likely to have trouble accessing the necessary financing and business tools needed to start and grow their businesses. The Entrepreneurs of Color Fund, run by Detroit Development Fund and supported by JPMorgan Chase, among others, has made 84 loans to 68 small businesses worth approximately $7.5 million. New initiatives include:
- Increasing the number of small businesses with access to the Entrepreneurs of Color Fund.
- Partnering with local Community Development Financial Institutions to increase access to capital, technical assistance and real estate for small business to open and grow in strategic neighborhood commercial corridors.
Investing in Job Training and the Future of Work ($10 million)
Equipping Detroiters with the skills they need to secure in-demand jobs expands access to opportunity. New initiatives include:
- Reducing employment barriers for Detroiters, including those with criminal records, and improving foundational skills such as literacy skills.
- Preparing workers for the jobs of the future by supporting job training programs for growing industries in Detroit such as IT, advanced manufacturing and health care.
- Providing more entrepreneurs with tools and resources to create jobs.
“This historic investment from JPMorgan Chase is further proof that the business community views Detroit, and our entire state, as a home for opportunity. If we’re going to make Michigan a leader again, we’ve got to put Michiganders first by working together to provide pathways to high-paying jobs and ensuring that all businesses have what they need to grow, and that’s what this announcement is about today,” said Governor Gretchen Whitmer. “I look forward to partnering with JPMorgan Chase, and everyone who wants to get to work, to build a Michigan where more businesses move to for opportunity.”
Financial Health ($8 million)
To help improve the financial health of Detroiters, the firm is investing in programs that help individuals and entrepreneurs build assets and establish a strong financial foundation. Initiatives include:
- Raising wages for the firm’s entry-level branch and customer services employees in the Detroit area to no less than $16.50/hour.
- Increasing access to financial counseling services for underserved Detroiters by helping them save money, build wealth and reduce debt as well have greater opportunity to purchase homes.
- Increasing investments in financial coaching and savings incentive programs.
"Expanding access to social justice and economic opportunity for our Detroit communities takes commitment and partnership, and Capital Impact Partners has been fortunate to find both in JPMorgan Chase," said Ellis Carr, President and CEO of Capital Impact Partners. "Chase’s pioneering $150 million investment in the city has allowed us to invest in many of Detroit's mixed-income neighborhoods, supporting new and existing residents through programming like the Equitable Development Initiative and catalytic financing like the Detroit Neighborhoods Fund. We look forward to future collaborations with Chase that break down systemic barriers and create transformative change for all Detroiters."
“We need to work together to solve big problems like the ones Detroiters have faced for decades now,” said Marc Morial, President, National Urban League. “Opportunity is still out of reach for far too many, not just in Detroit but all across the country, and JPMorgan Chase is driving an effort that includes many private, public and non-profit institutions – to help more long term Detroiters, especially those in the black community, to access better jobs, buy homes, and find the resources they need to start and open businesses.”
“JPMorgan Chase’s significant investment in Detroit through the AdvancingCities initiative is poised to demonstrate that equity is the superior growth model to deliver a more prosperous and inclusive region,” said Angela Glover Blackwell, President and CEO, PolicyLink. “This ambitious effort – including a comprehensive approach, focus on the most vulnerable, and investing in and partnering with local leaders – has the necessary components for breakthrough innovation.”
“JPMorgan Chase continues to be a strong contributor and partner in the growth of our city. I’m pleased to acknowledge their 5th year in Detroit and look forward to many more,” said Brenda Jones, President, Detroit City Council.
“By seeding catalytic investments in workforce and our local small businesses, JPMorgan Chase & Co continues to be a trusted partner and thought leader to the City of Detroit as we work to expand economic opportunity in District 5 and to all Detroiters,” said Detroit City Council Pro Tem, Mary Sheffield.
“JPMorgan Chase is committed to Detroit. With their partnership we have been able to double down on efforts to revitalize our neighborhoods and grow opportunities across our great city,” said Andre Spivey, Detroit City Council. “I commend their work and look forward to continuing the partnership.”
For more information visit: www.jpmorganchase.com/detroit.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.7 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 customers 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 www.jpmorganchase.com.