A new $7.2 million grant will prepare thousands of renters on Chicago’s South and West Sides for homeownership and seek to boost hundreds into the American dream by helping them buy homes in their communities, increasing wealth for the city’s Black and Latino families.
The grant, from JPMorgan Chase, will go to a coalition of seven community organizations to bolster affordable home ownership and to make new homes sprout across vacant lots.
“This is going to help hundreds of families either buy a new home or renovate and preserve their existing home,” said Charlie Corrigan, who oversees philanthropy in the Midwest for JPMorgan Chase. “We’re really excited about this opportunity to … build community wealth in areas that are too often overlooked.”
The grant represents the largest philanthropic gift Chase has ever made to any single project in Chicago, and comes on the heels of a commitment by the bank to step up lending to Black and Latino families in the city in an effort to address a deep racial wealth gap and ongoing disparities in lending.
WBEZ and City Bureau reported last summer that banks loan just pennies in the city’s black and Latino neighborhoods for every dollar of home purchase lending they do in Chicago’s white neighborhoods. Chase had the largest racial disparity of any major lender, directing 40 times more lending to Chicago’s white neighborhoods than black neighborhoods for home purchases between 2012 and 2018.
The seven-organization collaboration will be led by The Resurrection Project, a Pilsen-based organization that works to create affordable housing.
Raul Raymundo, CEO of The Resurrection Project, said lower-income families don’t tend to invest in stocks or have “fancy insurance investments.”
“There are very few vehicles by which low-income, working families can build wealth,” said Raymundo. “Homeownership is one of those.”
He said the grant offers an opportunity to demonstrate that “we need the financial industry, including Chase and others, to be more intentional about creating programs to build wealth through homeownership.”
He thinks the effort can begin to address decades of disinvestment as well as impacts of the COVID-19 pandemic, which has disproportionately affected African-American and Latino communities.
“We are looking forward to this being a model to help communities rebuild coming out of this crisis,” said Raymundo.
Corrigan said the project approaches every aspect of buying, building and preserving a home. The grant will pay for homeownership education and financial counseling to prepare renters to become homeowners. It will build 150 new homes using modular construction – meaning homes are built in a factory and then assembled on site in an effort to lower costs. Additional efforts, including loans offered through The Resurrection Project’s lending arm, will help current homeowners repair and maintain their homes.
Efforts will center on the New City and Back of the Yards neighborhoods on the South Side, Chicago Lawn on the Southwest Side and North Lawndale on the West Side.
In addition to The Resurrection Project, the coalition of community groups also includes the Back of the Yards Neighborhood Council, the Peace and Education Coalition, the Precious Blood Ministry of Reconciliation, Lawndale Christian Development Corporation, and the Southwest Organizing Project. Capital Good Fund, a multi-state lender- is also involved.
The grant comes amid nationwide and local calls for racial justice and increased focus on the racial wealth gap. The typical white household in the U.S. has 10 times more wealth than the typical Black household, and 8 times more wealth than the typical Latino household, according to the Urban Institute.
Raymundo says the grant will kick off what he hopes will eventually be 1,000 new homes on vacant lots across the South Side; a model modular home at 4856 S. Ada Street in the New City community is already built.
On the West Side, Richard Townsell, executive director of the North Lawndale Christian Development Corporation, is also working on a plan to bring 1,000 new homes to his neighborhood. He said in Lawndale, the Chase grant will fund three years of homebuyer training and counseling, outreach and organizing work.
”This helps us to be able to build up the supply of eligible buyers,” said Townsell.
Both Townsell and Raymundo said additional commitments by Chase and other banks will be necessary — most critically when it comes to providing mortgages for home buyers.
“We need the financial industry, the banks to step up and do products that focus on black and brown communities,” said Raymundo.
That means offering loans with low down payments, significant subsidies to lower monthly payments, and flexibility around credit scores, he said, “so that we can get more Black and brown families eligible to become homeowners.”
Townsell said it seems like corporations and banks consistently announce philanthropic help for needy neighborhoods, yet disinvestment persists. Even Chase announced a three-year, $40 million grant in 2017 to spur opportunity on the South and West Sides.
“You know, I don’t know where any of it goes,” Townsell said. “Our neighborhoods still look like they look … So I think they’ve got to hone in on how do we really get at this problem?”
Linda Lutton covers Chicago neighborhoods for WBEZ. Follow her @lindalutton.