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No Neighborhood Left Behind

Hon. Mel Martinez

Detroit’s newly revitalized downtown and midtown are buzzing. But not everyone is feeling the thrill. Beyond these areas, it’s all too common to find neighborhoods that are at risk of being left behind. The disparity not only harms families and communities, it isn’t a sustainable model — research shows that thriving neighborhoods are key for any city’s long-term economic success.

“Detroit’s success depends on our ability to work collaboratively with public, private and philanthropic partners to find innovative solutions that will fuel the city’s continued revitalization. JPMorgan Chase’s investment will create a microdistrict model, which can be tailored throughout the city and serve as a catalyst for neighborhood redevelopment, stimulating small business economic growth and creating new jobs.”

The question is how to spread the prosperity beyond the urban core.

To help address this complex issue, in 2016 JPMorgan Chase launched Partnerships for Raising Opportunity in Neighborhoods (PRO Neighborhoods), a $125 million, five-year philanthropic initiative to support and catalyze locally driven solutions for revitalizing distressed neighborhoods across the United States.

This focus on neighborhood renewal has been greatly informed by our work in Detroit, where we help to find ways to ensure the revitalization underway there extends beyond downtown and midtown. Historically, community development efforts have treated each element of neighborhoods — housing, education, health care and transportation — separately. Instead, PRO Neighborhoods’ strategy is based on the idea that creating vibrant, healthy and inclusive neighborhoods depends on investing in these elements in a holistic and integrated way — and doing so deeply enough in a particular place to have a real impact.

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Develop Detroit

In 2016 JPMorgan Chase announced a commitment of $4 million over four years in seed funding to support the creation of Develop Detroit, a full-service nonprofit real estate development organization that fills a critical gap in capacity to bring financing to projects in Detroit’s neighborhoods. Develop Detroit will work to preserve existing affordable residential homes and build new, inclusive mixed-use housing projects in targeted neighborhoods. Since its launch in August, Develop Detroit has closed on three projects, which include new housing units, renovated apartments and a new development site for mixed-income, multifamily rental homes.

The Detroit Strategic Neighborhoods Initiative

PRO Neighborhoods holds an annual competition to encourage community development financial institutions (CDFIs) to collaborate on local solutions that promote inclusive growth in their communities. One of the 2016 winners was the Detroit Strategic Neighborhoods Initiative, a collaboration that brings together public, private and philanthropic partners. The initiative is focused on improving a targeted group of neighborhoods by stabilizing real estate, creating jobs, providing mixed-income housing and improving infrastructure.

JPMorgan Chase committed $5 million in the initiative to support the creation of a new $30 million Strategic Neighborhood Fund, a partnership between Invest Detroit, the Detroit Development Fund and the Opportunity Resource Fund. Over the next decade, the fund will dedicate key resources to add more housing, density and services in the West Village, Southwest Detroit and Livernois-McNichols neighborhoods, which have been targeted by the city for revitalization.

Investing in Community Development

JPMorgan Chase has deep expertise in community development banking and, through our Chase Community Development Banking business, a proven track record of lending and investing in Detroit.

This commitment continues in the city, where in addition to our ongoing community development banking work and PRO Neighborhoods efforts, half of our total $100 million investment will support two leading nonprofit community development financial institutions: Capital Impact Partners and Invest Detroit. Through the Detroit Neighborhoods Fund, managed by Capital Impact Partners, we are providing financing for the rehabilitation and construction of mixed-use and multifamily housing. The Chase Invest Detroit Fund, managed by Invest Detroit, provides capital for residential, commercial and retail developments that help small and medium-sized enterprises grow. This support is enabling our partners to finance projects in Detroit’s neighborhoods and urban core that hold the key to unlocking more inclusive growth but lack access to traditional financing.

By the end of 2016, the funds together have committed over $43.9 million through 19 loans and leveraged over $145.8 million in additional funding.

“CDFIs are built on the philosophy of collaboration. We are seeing a high level of partnering that exists between CDFIs, which allows us to share risk, leverage assets and get boots on the ground on a grassroots level. It’s based on the concept that we all have limited resources that we can deploy, and the best we can do is leverage our resources for a common goal or purpose,” said David Blaszkiewicz, president and CEO of Invest Detroit.

Tackling BLight

Blight isn’t just an aesthetic issue.

Dilapidated housing drains city resources, erodes the tax base, decreases property values and puts a community’s health and safety at risk. In Detroit, tackling this problem is a crucial step in the city’s revitalization. Our firm has committed $25 million to support a broad range of key efforts and organizations in Detroit to end blight and stabilize and revitalize Detroit’s neighborhoods.

For example, in 2015 JPMorgan Chase provided $5 million to community lender Liberty Bank — the third-largest African-American-owned bank in the country — to create the Liberty Bank Home Restoration Program. Through the program, Liberty Bank is extending $20 million in affordable mortgage and rehabilitation loans to qualified buyers and existing homeowners in Detroit’s neighborhoods. Our support enables Liberty to offer more flexible financing terms that account for the realities of Detroit’s housing market and to provide down-payment assistance.

Another example is our support of Southwest Solutions, which is working to revitalize the Southwest neighborhood through coaching and homeownership counseling programs, and by rehabilitating properties and putting them back on the market. We have also invested in Michigan Community Resources and Community Development Advocates of Detroit to create an electronic system to help community organizations better coordinate their activities and build capacity for blight removal.

Harnessing Technology

JPMorgan Chase supports the work of the Motor City Mapping project, which uses technology developed by Loveland Technologies to digitize property information and helps city officials, residents and community groups work together to transform blighted properties. The initiative is a model for how technology can lead to innovative solutions for problems that plague neighborhoods. Now we’re supporting the expansion of this unique tool to three cities in Ohio.

The 20-Minute Neighborhood

Imagine living in a place where everything you wanted — from parks to groceries to a cup of coffee — was a 20-minute walk or bike ride away.

This is the concept of the “20-minute neighborhood,” an idea that started in Portland, Oregon, and that Detroit’s civic leaders have embraced. In addition to increasing livability, convenience and well-being, these neighborhoods provide access to critical services like public transit that help remove barriers for people and communities.

Throughout history, people have walked from their homes to get the things they need. With the invention of the car and the rise of the suburbs, however, this way of living has fallen by the wayside in many places. But the concept is back, thanks in part to millennials who seek a denser, urban community over the isolated and car-bound culture of the suburbs.

“A lot of the comeback stories have been focused on downtown, what people call the heart of the city. But Mayor Duggan has always said that what will make Detroit great again is the quality of the neighborhoods, which are the soul of the city. In the next phase of revitalizing Detroit, we felt that it was important to re-establish the importance of neighborhoods,” said Maurice Cox, Detroit’s director of planning. Restoring the city’s “soul,” according to Cox, involves bringing both long-time residents and newcomers along in Detroit’s recovery. The program targets three neighborhoods with an abundance of single-family homes, many of them beautiful but abandoned or in disrepair. “We owe people a return on their investment by regenerating their neighborhoods,” said Cox. “We need to give them clear, demonstrable results so they can plan to stay, raise their families and continue to anchor this city.”

For West Village, Southwest Detroit and Livernois- McNichols, the city laid out a plan that includes several key steps to creating 20-minute neighborhoods: renovating homes with federal affordable housing funds, building greenways to connect neighborhoods, adding protected bike lanes and retail in adjacent commercial corridors, renovating vacant apartment buildings, improving streetscapes in medians and turning vacant lots into gardens or orchards.

With these three neighborhoods making steady progress, more are sure to follow. “There is something systemic about what we are doing,” said Cox. “Our goal is to take the lessons learned and apply them to many kinds of neighborhoods across Detroit. If we get this right, we will have solved a problem that a majority of Detroit neighborhoods have faced for decades.”