Editorial: Stable neighborhoods will boost Detroit
The past few months have brought millions of new investment to Detroit’s neighborhoods that have lagged behind the growth and redevelopment of downtown and Midtown. That’s good news for city residents, as well as the long-term viability of Detroit’s comeback.
JPMorgan Chase announced Thursday it would add $15 million to Detroit’s Strategic Neighborhood Fund, a public-private partnership, through the nonprofit lender Invest Detroit. The new funding is part of the banking giant’s $150 million commitment to the Motor City since 2014.
This latest venture was revealed at a press conference at the Detroit School for Digital Technology in Southwest Detroit. JPMorgan Chase’s Peter Scher, head of global corporate responsibility, joined Mayor Mike Duggan in sharing the news.
Following the announcement, Scher told our editorial board that the company has aimed to accelerate ongoing redevelopment efforts in Detroit.
We also spoke with the firm's CEO Jamie Dimon last fall when he was in town for an exclusive Business Council meeting with other top U.S. CEOs. He made it clear it’s very important to his company that philanthropic investments are targeted in the most effective ways — and that the money is reaping visible returns. He also said it’s vital for companies like JPMorgan Chase to have good partnerships with politicians for investments to work, and Dimon pointed to his relationship with Duggan (and former Gov. Rick Snyder).
As Dimon said in October: “If we can’t work together with the civic society and the government, we’re not going to do it. It’s a waste of money."
Things have gone so well in Detroit, in fact, that the company has taken what it’s learned here and made similar investments in Chicago and Washington, D.C.
Much of the funding is directed to areas where the company thinks it can have the most impact, including affordable housing, work skills and economic development.
The money should be tracked to make sure it’s getting used in the best possible ways.
JPMorgan Chase has also embedded four employees since 2017 to work with Invest Detroit, and they are offering their expertise to make the neighborhood strategy successful.
Other companies have also contributed to rebuilding neighborhoods. In December, American Axle & Manufacturing, Blue Cross Blue Shield of Michigan, Chemical Bank, Fifth Third Bank, Flagstar Bank, Huntington Bank and Penske Corp. invested $5 million each in seven neglected neighborhoods. That money is expected to go toward revitalization and affordable housing.
The need for such funding remains a priority, as a new report from Detroit Future City highlights. The report found the city’s African-American middle class is largely missing. Out of Detroit’s 297 census tracts, only 12 (4 percent) can be defined as a middle-class neighborhood. That places Detroit at the bottom of the 50 largest U.S. cities for its share of middle-class residents.
Detroit Future City’s Executive Director Anika Goss has pointed to 91 other census tracts that are moving closer to a middle-class majority, and those could be areas for additional investment.
“If we want to see more black people enter the middle class, we must invest in endeavors and interventions that lead to better-paying jobs, affordable housing, efficient transportation and effective schools,” wrote Andre M. Perry, a fellow at the Brookings Institution, in a forward to the Detroit Future City report.
That sounds exactly like what JPMorgan Chase hopes to build with its Detroit investments.