Invest in large-scale, affordable home construction in distressed communities of Chicago.
by Rochelle Foster, Kevin Sutton, Amy Totsch for Chicago Business
April 16, 2021
To the CEOs of the nation's banks, especially the "market leaders" in Chicago—Jamie Dimon (Chase), Greg Carmichael (Fifth Third), Stephen Steinour (Huntington), William Demchak (PNC), Andrew Cecere (U.S. Bank) and Brian Moynihan (Bank of America)—the organized peoples' institutions of United Power for Action & Justice have one focused request: Invest in large-scale, affordable home construction in four distressed communities of Chicago, instead of issuing more press releases.
We specifically ask you to help us build or renovate enough "rooftops" in North Lawndale, Roseland, Back of the Yards and Chicago Lawn that they attract new homeowners to areas where Chicago has bled population for decades.
Help us build decent, quality, affordable homes for working families and individuals where now sit thousands of empty lots or shuttered buildings. Help us change the reality on the ground, a reality largely created by racist patterns and practices of how lending has been controlled by the government and financial sector in the Second City for decades.
In the aftermath of the murder of George Floyd and the protests that followed, many of your financial institutions announced major commitments to the nation's inner cities:
- Bank of America promised $1 billion over the next four years to address "economic and racial inequality accelerated by a global pandemic."
- U.S. Bank announced $116 million annually to "Black-owned-or-led businesses and organizations," with $15 million aimed at "systemic economic and racial inequities in small business, affordable housing, and workplace development."
- PNC Bank committed more than $1 billion "to help end systemic racism and support economic empowerment of African Americans and low- and moderate-income communities."
- Huntington Bank announced a "$20 Billion Community Plan to Help Boost Economic Opportunity Throughout Its Seven-State Footprint," with $7.5 billion committed toward affordable housing and home ownership.
Fifth Third Bank pledged $8.75 million "to support small businesses and the community during the COVID-19 pandemic."
- JPMorgan Chase announced $30 billion over the next five years specifically allocated toward Black and Latino communities.
That's about $52 billion total, give or take a billion.
We are now one-third of the way through 2021. While we were encouraged by your 2020 parade of promises, the religious and other people's institutions in our communities have good reason to wonder whether your announcements—like so many that financial institutions have made after other catastrophic incidents—will be real. So far, we have not seen any evidence that your rhetoric is going to translate into concrete reality and meaningful change.
The topic of where Chicago banks don't lend in Chicago has been highlighted in fine reporting, done so clearly by Linda Lutton and others at WBEZ last summer, with the tagline "For every $1 banks loaned in Chicago's white neighborhoods, they invested just 12 cents in the city's black neighborhoods and 13 cents in Latino areas."
In the discussion since that report of what your banks could do, you have circulated many ideas: helping people get more mortgages, providing homebuyer assistance and one bank's suggestion of bringing a "bank bus" into a community where there is no local branch bank.
Thanks for the gestures, but shame on you for not being there already. These "solutions" overlook a major, gaping hole in bank logic: There is a lack of decent product—that is, affordable homes—for people to buy in our communities. We simply do not have decent, quality housing on a large enough scale to help significant numbers of individuals and families to put your offered "lending products" to use. We need rooftops to do that.
United Power for Action & Justice and its member religious and civic institutions in Chicago have set out to rebuild or reclaim at least 1,000 homes on the West Side and 1,000 homes on the South Side of Chicago. Homes that are affordable and accessible to African Americans, Latinx, young and working-class people, and others who have been frozen out of the Chicago real estate market.
We need owner-occupied homes—not just rentals—that can help families and individuals build wealth and equity through homeownership. We need homes built at a scale that will spark deep renewal in our neighborhoods that have waited for generations to reclaim their communities for themselves—not for gentrifiers, flippers or speculators.
How could your banks help? Now? Today? In 2021? Our proposal is to start by pooling together enough money to establish a zero percent interest, non-recourse, revolving loan fund to finance the construction or reclamation of new, decent, affordable owner-occupied homes at the scale needed to bring about permanent, community-controlled revitalization.
A revolving fund of a mere $25 million of the "$52 billion-with-a-B" your banks promised last year would allow us to start building the first 250 homes in North Lawndale this year (yes, in 2021) and continue to build or reclaim 250 homes a year in the four communities on the West and South sides we have targeted. An additional $10 million could provide no-interest second mortgages with reasonable liens to reduce the initial cost of purchasing these homes, especially for first-time homeowners.
And we will do this in neighborhoods where the indigenous leaders and their institutions have already proven their commitment to organize for and seek improvements in jobs, education, health care, retail outlets and public safety for the long haul. But first we need those rooftops.
We in United Power for Action & Justice and the mayor and housing commissioner of the city of Chicago are ready to build or reclaim these homes. Are you, the six CEOs of the banks whose promises are listed above, ready to make your corporate rhetoric real in Chicago? We're coming to ask. Will you meet with us, or will you send your PR people to explain that a revolving fund of $25 million in zero percent construction loans is just too much for your bank to risk in helping us reclaim our communities?
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