JPMorgan Chase announced it will be investing more than $9.6 million to help dealing with racial wealth gap in homeownership!
Owning a home is an effective way to build wealth and pass it on across generations. However, there are significant wealth transfer obstacles affecting more than $32 billion worth of property across 44 states and Washington, D.C., according to estimates. A major issue is heirs’ property, which occurs when homeowners die without a will, leaving property informally to multiple descendants. According to research from JPMorgan Chase, this lack of formal ownership can create numerous problems:
- Difficulty in transferring property to future generations;
- Challenges in accessing government assistance during natural disasters;
- Ineligibility for property tax relief;
- Risk of foreclosures, tax sales, and predatory investors who might acquire homes below market value.
To address these issues, JPMorgan Chase has committed over $9.6 million in philanthropic efforts aimed at preserving homeownership. These funds will support organizations tackling heirs’ property issues, appraisal bias, and home undervaluation.
“As interest rates and mortgage costs are rising, the path to sustainable homeownership has become increasingly difficult. For many existing homeowners, including many here in Atlanta, high rates of heirs’ property and appraisal bias have made it challenging to maintain homeownership and benefit from the equity of their property”, said Heather Higginbottom, head of research policy and insights for corporate responsibility at JPMorgan Chase.
These issues, especially heirs’ property and appraisal bias, significantly impact communities of color. The National Consumer Law Center estimates that up to half of Black-owned property is held as heirs’ property.
“It’s clearly disproportionately a Black and Brown problem. But it’s not exclusively, by any stretch, just a Black and Brown problem”, said Thomas Mitchell, a professor at Boston College and director of the Initiative on Land, Housing & Property Rights.
Additionally, undervaluation of homes in these communities contributes to the racial wealth gap. Research from the Brookings Institution shows homes in Black neighborhoods are valued 21% to 23% less than similar homes in non-Black neighborhoods.
JPMorgan Chase’s Commitment
JPMorgan’s funding will support efforts in Georgia, New York, Jacksonville, Florida, Pittsburgh, and Washington, D.C. The initiative aims to preserve homeownership and close the racial wealth gap by addressing systemic issues affecting property ownership in underserved communities. The grants will aid organizations in addressing heirs’ property and appraisal bias through estate planning clinics, legal services, research, and market innovations. Specific allocations include:
- $3 million to Catapult Greater Pittsburgh for a clinic assisting those without legal titles to their property;
- $2.3 million to the Brookings Institution and Economic Architecture to tackle home devaluation in Black neighborhoods;
- $2 million to Boston College’s Initiative on Land, Housing & Property Rights for research and policy development;
- $889,000 to the Center for NYC Neighborhoods to raise awareness and provide free estate planning services to Black homeowners;
- $500,000 to LISC Jacksonville to expand heirs’ property and family wealth creation programs;
- $500,000 to Howard University’s legal clinic for estate planning and heirs’ property services;
- $300,000 to the Alcorn State University Foundation for research and ethical recommendations on public heirs property data;
- $150,000 to the Federation of Southern Cooperatives/Land Assistance Fund for legal assistance to rural homeowners in the Southeast U.S.