JPMorgan Chase is donating $7.2 million to jump-start the construction of affordable, pre-made homes on Chicago’s West and Southwest sides.
The investment, the largest contribution of a total $37 million Chase is announcing for single, high-impact projects in cities throughout the U.S., will finance at least 150 homes in neighborhoods with large numbers of working-class families and few affordable options for single-family homes.
It’s also the largest donation Chase has made to a single cause in Chicago in a history of extensive charitable activity here. New York-based Chase is the largest commercial and retail bank in the Chicago market.
Overseeing the enterprise is the Resurrection Project, a Pilsen-based nonprofit specializing in affordable housing and financial services in largely Latino neighborhoods like Pilsen, Little Village and Back of the Yards.
Under the initiative, one modular home already has been built on a vacant parcel in Back of the Yards. Before the Chase grant, Resurrection Project had plans to construct 30 more. Chase’s investment ensures that will happen—and far more. Other neighborhoods the initiative targets are North Lawndale on the West Side and Chicago Lawn on the Southwest Side.
“Home ownership is one of the few vehicles by which a working-class family can build wealth,” said Raul Raymundo, CEO of the Resurrection Project, in an interview.
His group applied for the Chase grant in a contest the bank launched early this year as it opted to focus more of its charitable budget on single, high-impact projects rather than spreading it among numerous causes. The $7.2 million is on top of the $40 million Chase dedicated to economic restoration on the South and West sides in 2017. It’s also in addition to another $10 million Chase gave in late 2018 to the Chicago Community Loan Fund for retail development in such neighborhoods.
The idea behind modular homes is to lower the cost of a new three-bedroom home so that the price comes in at $200,000 or less. At today’s interest rates, a family with an income around $50,000 can afford a mortgage. Helping keep price points down is that Resurrection Project has gained access to low-cost vacant parcels from the city of Chicago and other sources.
Key to the effort will be for banks to offer home loans featuring low down payments and closing costs, as well as flexibility around credit scores, Raymundo said. His group is in discussions with lenders and expects three to five to participate.
Other neighborhood nonprofits are involved as well, and the money won’t be made available only for modular homes, said Charlie Corrigan, Chase’s executive director in charge of philanthropy in Chicago and the Midwest. In some cases, renovation of existing housing stock is just as effective in terms of creating affordable housing, he said in an interview.
“These three neighborhoods have very different housing stocks,” Corrigan said. In North Lawndale, where there’s excess vacant land, modular homes will be more prevalent. In Chicago Lawn, there are lots of bungalows, many of which need repair. Back of the Yards has a combination of the two.
He expects the money to finance construction of about 100 modular homes and renovation of about 50 existing structures.
Resurrection Project won the day with Chase by presenting a plan that was creative, featured close collaboration among nonprofits with a record of accomplishment and presented an achievable vision, Corrigan said.
“It’s a very explicit mission as to how to bridge the wealth divide” in Black and Brown communities, he said.
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