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JPMorgan Chase has introduced a number of initiatives in recent years in support of its $30 billion Racial Equity Commitment, which includes $14 billion for the creation and preservation of affordable housing. Partner Insights spoke with Vince Toye, Head of Community Development Banking and Agency Lending, about the firm's 2022 accomplishments.

Commercial Observer: Give us a general overview of JPMorgan Chase’s 2022 affordable housing lending efforts.

Vince Toye: Let's put 2022 into perspective. Five years ago, Community Development Banking lent $1.4 billion into affordable housing. Last year we almost quadrupled our lending to $4.4 billion, making this our best year ever. In addition to deploying the most capital ever, we added offices and new employees across the U.S. After our record-breaking 2022, we’ve continued growing our platform and strengthening our team. 

How did JPMorgan Chase support community development financial institutions (CDFIs) throughout the country last year?

Toye: We lent about $190 million to CDFIs last year for various local initiatives, including some supporting developers of color. CFDIs' mission and flexibility make them important for the industry. Over the last two decades, our team has provided more than $2 billion in direct financing to CDFIs. The firm also has a Community Impact Investing group that’s lending to CDFIs at below market rates to help support the industry overall. 

Affordable housing has faced obstacles of late, including the elimination of New York’s 421a tax incentive, inflation, recession fears and rising interest rates. How did these factors affect JPMorgan Chase’s affordable housing efforts? How did the firm prevail?

Toye: Projects took longer to build, or even start, because of these factors. We worked closely with developers to form creative solutions—specifically public-private partnerships between developers, borrowers, municipalities and states. Even with the record year we had last year, there were a good number of projects that were pushed into 2023. But overall, I think collaborations between the aforementioned groups helped moved projects along.

Are there any actions you'd like to see the government take to help mitigate this situation?

Toye: As mentioned, there is a housing supply issue across the U.S. As an industry, figuring out how to get housing developments built quicker, whether through rezoning or faster approvals, should be a top priority, and the biggest issue is the time frame. We have affordable housing developments that can take five to seven years before they get started. Also, making reuse or repurposing—like from office or hotel to residential—easier to do would be very impactful.

What additional firm solutions and partners were integral in helping Community Development Banking reach its 2022 affordable housing goals?

Toye: The success of our group doesn't happen alone. We work in partnership with our tax-oriented investment Low-Income Housing Tax Credit (LIHTC) equity partners. Also, as we grow our Agency Lending business, Fannie Mae® and Freddie Mac have been critical partners and allow us to offer our clients multiple financing options. Our Historic Tax Credit business played an important role in some New York City Housing Authority rehabilitation deals we closed, and we hope to use this debt and equity combination with other housing authorities across the nation. Finally, our Impact Banking group brings additional resources that help facilitate CDFI transactions. The group also invests in funds that help develop and support entrepreneurs of color. All these groups play a different role in helping us service not just housing, but other needs in the community. 

Beyond the firm's affordable housing efforts, how does JPMorgan Chase support thriving communities?

Toye: We think about housing as a critical pinpoint, but we’re also addressing gaps in access to healthy food, education, and job training, to name a few. Our New Markets Tax Credit (NMTC) business is really focused on those projects outside of housing. We're providing equity toward putting a childcare center in a new housing development, or a community medical facility, or the renovation of a vacant warehouse that then creates new jobs. The NMTC program drives more than $1 billion each year into nonprofits and businesses.  

What are the firm's 2023 affordable housing efforts, and what industry players are key to helping the firm meet its goals?

Toye: We recently launched our Capital Solutions business, which is focused on preserving and building housing that's beyond rent-restricted affordable housing. The restrictions of LIHTC projects are 60% below the area median income (AMI). But in that 60% to 80% or even 100% of AMI, you have essential workers, teachers, firefighters, police officers, nurses—these people are all being priced out. Our focus is on providing construction support and other resources to help get these apartments built.

We did a lot of work last year establishing relationships with equity providers who are focused in this area and connecting with businesses in the health care industry who want to make sure their employees live closer to work. For us to be successful, we'll continue to build partnerships with developers and others who are coming up with creative solutions to get housing built cost-effectively.

Any unit of housing we can build is a positive, and the more we can build that are affordable to the average worker, that to us is critical. We want to play a part in helping to fill that gap in 2023 and beyond.

JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.

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