JPMorgan Chase invests $3 million in UMD initiative to prevent small business displacement
JPMorgan Chase will invest $3 million in a University of Maryland-led effort to prevent displacement of small and minority businesses hurt by gentrification amid the coronavirus pandemic.
The donation will allow the College Park-based National Center for Smart Growth to create a “Small Business Anti-Displacement Network.”
The network plans to work with small business leaders, including policy makers, scholars, government agencies and community-based organizations, to come up with tools and policies to prevent vulnerable business from closing or being displaced.
Minority-owned businesses often are the first to close when development, bigger business and higher-income residents move in, said Willow Lung-Amam, who will serve as the network’s director and principal investigator.
“They have a hard time competing with chain retailers, attracting new customers and adapting to the higher rents that often accompany gentrification,” said Lung-Amam, noting that few tools exist to help them stay in place.
The initiative will focus first on helping businesses in cities seeing intense gentrification, such as Washington, New York City, Chicago and San Francisco. Many have been especially hard-hit by the economic fallout of COVID-19.
In the early months of the pandemic, Black businesses closed at a rate twice the national average, while Latinx businesses saw a 32% decrease in active business owners, according to the Federal Reserve Bank of New York. Even before the pandemic, Black or Latinx business owners were more likely to be at risk or distressed, according to McKinsey & Co. research.
The network will work to compile strategies and tools that can prevent displacement in the short-term, such as commercial tax credits, affordable workspace provisions, commercial rent control and other business protections.
Its goal will be to learn from dozens of organizational leaders nationwide and come up with viable solutions at the neighborhood, regional and national levels. Subsequent phases will look at ways to put protections in place in other cities before commercial displacement begins.
The investment is part of JPMorgan Chase’s previously announced $350 million, five-year global commitment to expand Black, Latinx, women-owned and other underserved small businesses and create a more inclusive recovery from the pandemic.
Entrepreneurs of color have faced increasingly unaffordable commercial space and other challenges, said Cate Costa, JPMorgan Chase’s vice president of global small business philanthropy.
“Small businesses, particularly those owned by people of color, are often vulnerable to financial strains when communities gentrify and those strains can lead to the displacement of the very businesses that bring those neighborhoods to life,” Costa said.
The university’s smart growth center conducts research on economic development and land use issues.
The partnership with Chase could be a transformational effort in the smart growth movement’s effort to preserve diversity and boost small business, said Darryll J. Pines, the university’s president, in the announcement.