JPMorgan invests $1.95 million to boost Black homeownership in the Seattle area
With the national black homeownership rate no better than the 1960sa new grassroots effort will look for ways to increase the number of black homeowners in the Seattle area.
JPMorgan Chase said on Tuesday it will dedicate $1.95 million to a Black homeownership initiative organized by the Seattle Foundation’s Civic municipalities. The exact uses for the money are still being determined, but the funds mark the start of a new effort to address a long-standing issue. The initiative will join several other efforts to increase black homeownership in the region.
In Washington, 34% of black people own a home, compared to 68% of whites. In Seattle, the gap is approximately 26% to 51%, respectively. Driven by years of discriminatory practices, the gap undermines the ability of black Americans to create wealth and benefit from rising house prices.
The new initiative aims to add 1,500 black homeowners in South Seattle, South King County and North Pierce County over the next five years. Housing prices have skyrocketed in some of these areas since the start of the pandemic. In southeast King County (covering Auburn, Kent, Renton and Skyway), the median home sold for $650,000 last year, up 23% from the year before.
“It’s a very bold goal. I don’t even know if it’s possible,” said Michael Brown, civic architect at Civic Commons. “But to get there, we have to disrupt the system as it is now.”
Organizers say more talks are needed to determine how the funds will be spent, but possible uses include funding and loans for developers of affordable and “mission-driven” housing, educating black tenants about housing opportunities homeownership and a “debt cleanup loan fund” to help homebuyers incorporate certain types of debt, such as medical debt, into their mortgages.
Civic Commons’ goal is to attract more philanthropic and government funding, Brown said.
“If all we’re talking about is $2 million in three years, we’ve failed,” Brown said. “Three years from now we should be talking about, I don’t know, $20 million or $30 million, and that ability to influence a system that produces something different.”
The funding is part of a $30 billion pledge made by JPMorgan after the 2020 police killing of George Floyd in Minneapolis – a small part of the bank’s $3.2 trillion in assets, according to the Wall Street Journal. The bank said in October it had spent $13 billion so far on homebuyer subsidies, affordable rental housing, helping landlords refinance and other efforts.
Along with Chicago, Los Angeles and several other cities, JPMorgan chose Seattle “given the gap and the size of the gap, and given the size of the problems here,” said Phyllis Campbell, president of the bank for the Pacific Northwest.
The JPMorgan-funded initiative is not the first effort to close the homeownership gap in Washington.
Another group of local housing and real estate industry experts created a seven point plan to stimulate black home ownership. They’re calling for more marketing and outreach to encourage black homebuyers, pre- and post-purchase advice, more down payment assistance, more affordable housing and other offerings.
Along with the need for financial assistance and housing supply, awareness is important because some potential buyers assume the property is out of reach, said Nicole Bascomb, a Seattle real estate broker who worked on the plan and is president. of the Western Washington chapter of the National Association of Real Estate Brokers, an organization founded in 1947 when black brokers could not join the National Association of Realtors
“We need to keep sharing this information and repeating it,” Bascomb said.
The Washington Department of Commerce is also work on a report assess current homeownership programs and barriers that Black, Indigenous, and people of color attempt to access credit and loans to purchase homes. The report is due in August.
“If we can move the needle for black homeownership, there are indirect benefits for the wider community,” said Darryl Smith, who sits on the state task force creating the report. and is executive director of Homesight. With funding from JPMorgan, the Windermere Foundation and others, the organization offers a ready to help black shoppers increase their buying power.
Closing the homeownership gap will require bigger changes than any proposal can deliver.
Racial disparities span all aspects of housing and home ownership. Black tenants are more likely to spend more than half of their income on rent and more likely to have student loan debt, making it harder to save for a down payment. According to the National Association of Realtors, black buyers are more likely to tap into their 401k or pension funds to buy a home, which can hurt their long-term financial health. When it comes time to apply for a mortgage, black applicants are more likely to be rejected for loans. And when black homeowners ask for an appraisal to refinance or resell their home, they may be discriminated against.
“We know there are issues with zoning, with credit ratings. Those are the big issues, and some are somewhat controversial,” Smith said. “If we really want to move things forward on this issue, here are some of those uncomfortable conversations we need to engage in.”