Community Development Lessons from Detroit
It's easy to focus on the challenges facing Detroit, a city that has seen a dramatic shift from a global industrial powerhouse to America's largest municipal bankruptcy. But we find it far more interesting to talk about the revitalization underway there and lessons that we can learn from it.
Last year, JPMorgan Chase pledged $100 million to support Detroit's economic recovery. In many ways, our commitment was a natural outgrowth of the work we've been doing since we opened for business in Detroit more than 80 years ago. Our history and relationships run deep in Detroit, from our first customer, General Motors, to the City of Detroit and its tens of thousands of businesses and individuals that bank with us every day. Those relationships have been crucial to our community development work, enabling us to seek out and work with local stakeholders who understand best what Detroit needs.
For example, as part of our $100 million commitment we partnered with two Community Development Financial Institutions (CDFI) that have been lending and investing in Detroit for more than a decade and have strong track records of collaborative success. One of these CDFIs, Invest Detroit, is working with the Downtown Development Authority and the Michigan Economic Development Corporation to renovate two blighted, historic buildings in the Capitol Park neighborhood of the city's central business district, a story we explore in the video below. Once complete, these buildings will offer housing opportunities (both affordable and market rate) to Detroit's residents and bring new retail and hospitality offerings to the city's center.
Throughout the country we see different versions of the problems Detroit is facing: once-thriving communities are now struggling with high unemployment, a shortage of affordable housing, and a lack of access to basic services and infrastructure. As such, we have been able to share best practices and apply what we learn there around the country, based on our work in Detroit.
Finding solutions often requires creative thinking, and so we look to be flexible in our approach. As community development bankers, we have access to specialized financing tools designed to support development in underserved communities, including tax credits and credit enhancements. These enable us to provide the patient, long-term capital required to revitalize neighborhoods and business districts that are now beginning to recover from decades of disinvestment. We also provide key structuring advice and relationships with other strategic funders and stake holders across the country that we bring to bear in the communities where we work.
We are able to provide much-needed capital at a time when such funds can be hard to access. Importantly, we are careful to provide the right kind of capital. Community development projects are often complicated, with multiple layers of financing resources – tax credit equity, debt, public financing and foundation grants – in a single project, so we use our expertise to ensure that those pieces come together.
In funding these projects, we also aim to stabilize the market and to make clear that we believe the cities where we live and work, like Detroit, and to encourage other funders to join us in this important work. There's no shortage of meaningful projects in need of support in Detroit and across the country. There's just a shortage of affordable, flexible financing to make them happen.
About the author: Priscilla is a Managing Director and Head of Community Development Banking at JP Morgan Chase, a national business that lends to and invests in community and economic development projects in underserved markets across the United States. Previously, Priscilla was the President and CEO of New York State's housing finance agencies.