The issue of heirs’ property, where homeowners die without a will and informally leave property to multiple descendants, has far-reaching consequences on wealth transfer. With more than $32 billion in assessed values of U.S. property at stake, these non-formal ownership arrangements can lead to a host of challenges. Not having a clear legal title can make it difficult to pass on property, access government assistance in times of disaster, and qualify for property tax relief. Additionally, homeowners may be at risk of foreclosures, tax sales, or predatory investors trying to acquire their homes below market value.
Disproportionate Impacts on Communities of Color
The issue of heirs’ property and appraisal bias disproportionately affects communities of color. Research has found that as much as half of the property owned by Black Americans is classified as heirs’ property. Moreover, homes in Black neighborhoods are undervalued by approximately 21% to 23% compared to similar homes in non-Black majority neighborhoods. This undervaluation contributes to the widening racial wealth gap and exacerbates existing inequalities in homeownership and wealth accumulation.
To address these pressing issues, JPMorgan Chase has announced a philanthropic commitment of over $9.6 million to organizations working towards preserving homeownership and combatting heirs’ property and appraisal bias issues. The focus of this commitment will be on targeted locations in Georgia, New York, Jacksonville, Fla., Pittsburgh, and Washington, D.C. The funding will support initiatives such as estate planning clinics, legal services, research, and market innovations aimed at rectifying these disparities.
Several key initiatives and partnerships are part of JPMorgan Chase’s philanthropic commitment:
– $3 million to Catapult Greater Philadelphia to provide legal title clinics and assistance to individuals without proper property titles.
– $2.3 million to the Brookings Institution and Economic Architecture to address the devaluation of homes in Black neighborhoods.
– $2 million to the Initiative on Land, Housing & Property Rights at Boston College to produce research and policy recommendations for underserved communities.
– $889,000 for the Center for NYC Neighborhoods to raise awareness and provide estate planning services to Black homeowners.
– $500,000 for 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 legal services.
– $300,000 for the Alcorn State University Foundation to research and provide recommendations on the ethical use of public heirs’ property data.
– $150,000 to the Federation of Southern Cooperatives/Land Assistance Fund to expand legal assistance to rural homeowners in the Southeast U.S.
The issues of heirs’ property and appraisal bias have significant implications for wealth transfer and equity in homeownership, particularly for communities of color. Addressing these disparities requires concerted efforts from both public and private stakeholders. JPMorgan Chase’s philanthropic commitment represents a step in the right direction towards preserving homeownership and creating a more equitable housing market for all. By supporting initiatives that focus on estate planning, legal assistance, and research, we can work towards a more inclusive and fair real estate environment for everyone.