Building Equity in Small Multifamily Ownership Initiative Wins National JPMorgan Chase AdvancingCities Challenge
Family Housing Fund and our partners have been awarded a $4 million, three-year grant from the JPMorgan Chase AdvancingCities Challenge to pilot a comprehensive strategy to reduce racial disparities in homeownership and wealth in Minneapolis.
This initiative – Building Equity in Small Multifamily Ownership – will support longtime community residents with low to moderate incomes purchase small multifamily buildings (duplexes, triplexes, and fourplexes) and build wealth as owner-occupant landlords.
Minnesota experiences some of the worst racial disparities in the country. Due to a history of discriminatory housing policies and lending practices, only 24% of Black Minnesotans own their homes compared to 76% of white households. Unrest following the murder of George Floyd and the disparate impact of the COVID-19 pandemic have further underscored these disparities in the Twin Cities. Recent zoning changes in Minneapolis and throughout the Twin Cities create the opportunity for more affordable homes, but intentional and collaborative action is necessary to ensure new development advances racial equity.
Our strategy is made up of two main components:
- Address the constrained supply and high competition for 2-4 unit properties: Capitalizing on recent zoning change in Minneapolis and throughout the Twin Cities, our collaborative will provide construction and rehab loans to local development firms led by people of color to increase the supply and improve the quality of small multifamily buildings. We will then facilitate sales to community residents.
- Ensure first-time buyers have access to financial support and training so they can become successful homeowners and responsible landlords: This includes reducing risk for mortgage lenders so that more financing options are available, providing down payment assistance, building a pipeline of prospective homebuyers who are prepared with homeownership and small landlord training, and increasing access to capital for future repair or replacement needs.
By focusing our efforts in neighborhoods of color with low homeownership rates and by partnering with community-based organizations, we aim to significantly reduce racial disparities in homeownership and wealth while promoting local ownership of the land and preventing displacement. JPMorgan Chase funds will support this work in Minneapolis’ seven cultural districts. Many of these neighborhoods experienced significant damage during the unrest that followed George Floyd’s killing, and our work will complement rebuilding efforts with affordable homeownership opportunities. We anticipate serving 110 families in the cultural districts over three years. We estimate the average household purchasing a 2-4 unit building to owner occupy will see their net worth increase by $300,000 over 15 years.
We aim to prove the financial viability of a model for lending to low-wealth individuals, eventually influencing lending practices in the market and more broadly increasing access to wealth building opportunities through real estate. As these interventions prove effective, this work can be scaled to the broader Twin Cities metro region and inform national strategies.
Family Housing Fund’s core collaborative includes Hope Community, the Land Bank Twin Cities, the Minnesota Home Ownership Center, and the Greater Minnesota Housing Fund. We look forward to building partnerships with more community organizations, local developers, lenders, financial educators, and municipal partners to advance this strategy and help us scale this work to the broader Twin Cities region.
The AdvancingCities Challenge is a $500 million, five-year initiative that combines the JPMorgan Chase lending capital, philanthropic capital, and expertise to drive inclusive growth and create greater economic opportunities at the neighborhood and city level. Our collaborative in Minneapolis is the first out of seven winners to be announced this year.
The announcement was made at the ribbon-cutting ceremony for Chase’s new branch in Ventura Village, along the Franklin Avenue cultural district. This new branch is Chase’s second in the country to follow an innovative model for addressing the needs of underserved communities, offering financial education programs and supporting growth of small businesses.
“This strategy is not just to retain affordable housing in this community, but it is also giving an opportunity to build intergenerational wealth,” Mayor Jacob Frey said at the event.
We are grateful to JPMorgan Chase for believing in our vision and making this significant first investment in our approach. Together, with many partners and across sectors, we can build a more equitable Twin Cities region.
Join us in the conversation: #BuildEquityMSP.
This announcement in the news
- JPMorgan Chase celebrates new community branch, $4 million grant for affordable housing (Star Tribune, 9/21/2020)
- Chase Bank opens branch aimed at helping south Minneapolis community (FOX9, 9/21/20)
- Minneapolis receives $4 Million in JPMorgan Chase’s AdvancingCities Challenge as bank showcases new, innovative branch in Ventura Village (JPMorgan Chase, 9/21/20)
- Minneapolis group awarded $4M for equity efforts (Finance & Commerce, 9/22/20)
- Chase Bank’s journey from Wall Street to Ventura Village (Twin Cities Business, 9/22/20)