On April 6, 2016, JPMorgan Chase & Co. 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.
With a number of major public projects well underway, Detroit’s planners and lenders have renewed focus on the role of small business development in the city’s ongoing revitalization. Now the next step of putting these lessons to work nationwide is taking shape.
The famous urban planning pioneer Jane Jacobs knew well that such comeback stories are built block by block, with diverse and stable communities creating a contagious vitality that could spread street by street, neighbor by neighbor, to form a diverse and thriving city. Vibrant local businesses are these blocks’ bedrock.
But building these strong communities hinges on local businesses that can help them grow, and that’s no easy feat. Difficulty accessing capital, business networks, and understanding of steps required to create a successful business can be daunting to would-be business owners.
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.
JPMorgan Chase recognizes that thriving neighborhoods are critical to the long-term economic success of individuals, communities, and cities. At a time when economic growth is often directed toward reviving commercial corridors and downtowns, many neighborhoods, families and small business owners are being left behind. Recent research has found that economic opportunity is deeply rooted in neighborhood conditions. Poor families located in thriving, resource-rich neighborhoods experience far greater education, health and employment outcomes.
Every city faces its own set of challenges and needs its own comprehensive strategy for economic growth that ensures opportunities to prosper are extended to distressed neighborhoods and the families that live there, yet many cities are finding it difficult to bring together the cross-sector solutions disinvested neighborhoods need to thrive.
Partnerships for Raising Opportunity in Neighborhoods (PRO Neighborhoods) is a five-year, $125 million effort to drive inclusive economic growth by helping communities access the tools they need to address neighborhood quality issues that are among the biggest barriers to economic mobility.
Because these challenges are major drivers of wealth and income inequality in chronically distressed neighborhoods and among communities of color, small business owners and low-income families, we will focus our efforts to reach these populations. PRO Neighborhoods consists of three components:
- An annual national competition to support Community Development Financial Institution Collaboratives (CDFI Collaboratives);
- Seed grants to support new financing mechanisms that expand affordable housing connected to economic opportunity drivers; and,
- Forward-looking data tools that help cities plan their neighborhood investments equitably and efficiently.