Contact: Lauren Slagter, firstname.lastname@example.org
FLINT—The majority of Flint residents support reparations for Black Americans, although levels of support vary depending on whether the proposal refers to reparations as a broad concept or specific reparative policies like cash payments or financial support for housing and education.
A new report from the University of Michigan’s Center for Racial Justice summarizes Flint residents’ attitudes about reparations, based on a representative survey conducted by the Michigan Metro Area Communities Study.
The survey shows 53% of Flint residents support the idea of governments making amends to Black Americans, while 22% neither support nor oppose it, 22% oppose it, and 3% don’t know or didn’t answer the survey question. However, a larger share of Flint residents (71%) support at least one of the specific reparative policies targeted toward individuals.
Among the Flint residents who opposed the general idea of reparations, 30% supported the specific action of governments offering financial assistance for buying or improving a home, 26% were in favor of financial support for postsecondary education, 26% supported free health care, and 17% supported the idea of cash payments for Black Americans.
“Reparations is where history meets action,” said Erykah Benson, a research fellow at the Center for Racial Justice. “The findings show how language plays a key role in attitudes toward reparations. It reveals how many Flint residents recognize that the impact of structural racism, past and present, extends to various areas of society, including as health care, homeownership, business ownership, wealth-building, criminal justice and more.”
Benson co-authored the report, “Forty acres and a mule? How Flint residents believe the government should repay Black Americans,” with Jasmine Simington, a research fellow at CRJ.
Residents and community leaders in Flint are working with U-M to explore what community-based reparations for Black residents might look like, as part of a national reparations project called Crafting Democratic Futures.
In the Michigan Metro Area Communities Study, reparations are defined as governmental action to make amends to Black Americans for the ongoing harm caused by slavery and more recent discriminatory policies. The survey asked about the general idea of governments making amends, as well as specific reparative policies that are either aimed at individual Black Americans or larger systemic changes.
“This report offers nuanced insights into how Flint residents think about reparations, whether that’s in the form of cash payments, financial assistance for improving or buying a house, investing in historically Black neighborhoods, or other options. We can focus on community-based reparations proposals that align with Flint residents’ priorities,” said Asa Zuccaro, director of the Latinx Technology and Community Center in Flint and a community fellow for the Crafting Democratic Futures project.
Race, education and income figured prominently into Flint residents’ attitudes toward reparations, with Black residents, residents with higher incomes and residents with more formal education showing higher levels of support for efforts to make amends to Black Americans.
About 57% of Flint’s more than 79,800 residents are Black, and about 33% of residents are white. More than two-thirds of the city’s Black residents support reparations (67%), compared to just under one-third (31%) of white residents.
Flint residents with a bachelor’s degree or more higher education are more likely to support reparations (74%), compared to residents with some college (60%) and residents with a high school education or less (43%). Residents with a household income of at least $60,000 are more likely to support reparations (73%), compared to residents with an income between $30,000 and $59,999 (46%) and those with an income of less than $30,000 (50%). The median household income in Flint is $32,350.
Options for individual-level amends asked about on the survey included:
- Financial support for postsecondary education (61% of Flint residents support this approach)
- Financial assistance for buying or improving a home (61% support)
- Financial support for Black-owned businesses (60% support)
- Free health care (60% support)
- Land grants (54% support)
- Cash payments (51% support)
- Baby bonds, where the government establishes a savings account for a newborn and invests in it throughout their childhood (48%)
A majority of Black Flint residents, the intended beneficiaries of the reparations policies under consideration, support cash payments (73%). An even greater proportion of Black residents (78%) support reparations in the form of financial assistance for buying or improving a home, financial support for postsecondary education (77%), financial support for Black businesses (75%) or free health care (74%).
Options for systemic-level amends asked about on the survey included:
- Investments into historically Black neighborhoods harmed by economic and environmental discrimination (59%)
- Expedited review and expungement of eligible criminal records for Black Americans (52%)
- Creation of an accountability commission that seeks to hold governments accountable for the ways that slavery and discriminatory policies have harmed Black Americans (52%)
“To Flint residents, reparations doesn’t mean one thing,” Simington said. “There are a variety of approaches local and national governments can take to making amends to Black Americans at an individual level or through systemic change. The approaches need not be mutually exclusive, and residents’ priorities should guide efforts.”
Guaranteed income programs are popping up across the country, including the University of Michigan’s hometown of Ann Arbor. But what are these programs, who is eligible to participate, and how does guaranteed income address poverty and inequality?
Led by Poverty Solutions at the University of Michigan, Guaranteed Income to Grow Ann Arbor (GIG A2) is a two-year guaranteed income pilot to provide monthly payments of $528 to 100 entrepreneurs with low and very low incomes in Ann Arbor. The City of Ann Arbor selected U-M to implement the pilot and study its effects, and GIG A2 is accepting applications in October.
“This guaranteed income pilot is about celebrating residents who do much to strengthen our community but are still struggling to make ends meet,” said Kristin Seefeldt, associate director of Poverty Solutions, in an official announcement of the program. “Pilot participants are vital to the success of the research study, which will allow other communities across the country to learn from Ann Arbor’s approach to guaranteed income.”
Here, the three U-M faculty researchers leading the pilot program discuss the idea behind guaranteed income and the GIG A2 pilot program goals.
Kristin Seefeldt is an associate professor of social work at the U-M School of Social Work, with a courtesy appointment at U-M’s Gerald R. Ford School of Public Policy. Seefeldt is also the principal investigator for GIG A2.
William Lopez is a clinical assistant professor of health behavior and health education at the U-M School of Public Health and Faculty Associate in the Latina/o Studies Program. Lopez is also a co-principal investigator for GIG A2 and a senior advisor at Poverty Solutions.
Rebeccah Sokol is an assistant professor of social work at the U-M School of Social Work. Sokol is also an adjunct assistant professor of health behavior and health education at the U-M School of Public Health and a co-principal investigator for GIG A2.
What is guaranteed income?
Sokol: Guaranteed income is a cash transfer program that provides regular, unconditional, and unrestricted funds to individuals or households. Recipients can spend the money however they would like without requiring that they perform specific activities—like working or going to school—to remain eligible.
Guaranteed income is always unconditional. Recipients do not need to perform specific behaviors to continue receiving funds. The program may, however, focus on certain people. For example, a guaranteed income program may focus on people who earn an income below a certain threshold.
In Guaranteed Income to Grow Ann Arbor, we are implementing a guaranteed income program that is focused on entrepreneurs in Ann Arbor who qualify as low-income earners. We are not requiring, however, that these individuals continue working to continue receiving their monthly guaranteed income payments.
What do these types of programs seek to achieve and how do they benefit individuals within (and maybe outside) of the program?
Seefeldt: These programs seek to provide people with a stable and dependable income. We know that many people who work lower-paying jobs also experience great variability in their scheduled hours week-to-week. This means that their pay varies as well, making it difficult to plan and manage finances. Having a reliable source of income, and one that can be flexibly used, may help mitigate some of the stress associated with unstable pay and lower the likelihood of experiencing hardships such as food and housing insecurity.
There could be a number of positive spillover effects of guaranteed income to the larger community, including for people not receiving payments. The payment may be used to help support extended family and friend networks. Many recipients will use the money to purchase goods and services, which is important to keeping the economy going.
Lopez: It’s also critical to remember that guaranteed income programs are fundamentally community health programs. Individuals and their families often know best what is needed to keep them healthy and happy. Unrestricted income allows them to spend that money on things like meals, medicines, fuel, child care, or even socializing. We often think of health interventions as interventions that specifically increase access to medications or to medical care, but there are many other aspects of our lives that actually keep us healthy. For members of marginalized communities, maintaining their health often requires navigating government systems working against them; and there are rarely, if ever, government programs to support maintaining one’s health in this way. For example, families who accrued debt while incarcerated may be able to pay down debt, or those who need a lawyer to fight deportation may be able to afford to hire one. Unrestricted cash allows families to prioritize these aspects as they see fit.
Where else in the U.S. are guaranteed income programs happening?
Seefeldt: Currently more than 100 cities have run—or are in the process of running—guaranteed income pilots. There are guaranteed income pilots planned and happening in communities across the United States, including Flint, Michigan; Stockton, California; Philadelphia, Pennsylvania; and New Orleans, Louisiana.
Lopez: Importantly, guaranteed income programs are not just—nor primarily—an academic idea. There is a growing movement throughout the country for more cities to embrace guaranteed income programs as a means of addressing economic disparities and the harms to health and well-being that often accompany poverty. Guaranteed income is rooted in the simple idea that every human being deserves to have their basic needs met, no matter what, and that unrestricted income empowers individuals and families to decide how to meet these needs.
What are some of the questions you’ve grappled with so far in designing the study?
Seefeldt: One issue that continually comes up is how to design a pilot that isn’t overly bureaucratic. A common complaint about many social service programs in the U.S. is that they require applicants and recipients to jump through many hoops in order to receive a benefit. Some refer to this practice as “administrative burden.” We don’t want the GIG A2 application process to be overly burdensome; we don’t want anyone to be deterred from applying because the application seems daunting and requires too many forms of documentation.
On the other hand, we have a responsibility to make sure that the funds for this pilot are spent in an ethical and responsible manner. Part of doing so means making sure that the pilot is serving those whom it was intended to serve and being accountable to the federal government to make sure that taxpayer dollars go toward their intended use. Thus, we are requiring that applicants provide some documentation to support their application.
Contact: Karissa Knapp, email@example.com
ANN ARBOR—This fall, the Real-World Perspectives on Poverty Solutions Speaker Series will feature poverty experts in both policy and practice, who will explore critical issues like: the effects of systemic oppression on health, reforming public institutions through human-centered design, reparations, and financial empowerment in Detroit.
The series is hosted by Poverty Solutions at the University of Michigan, a university-wide presidential initiative that aims to prevent and alleviate poverty through action-based research.
U-M researcher Arline Geronimus, professor of health behavior and health education at the School of Public Health, will be starting the series on Friday, Sept. 22. Geronimus will share her research on the effects of systemic oppression on the body. Her book on the subject – Weathering: The Extraordinary Stress of Ordinary Life in an Unjust Society – came out earlier this year.
Poverty Solutions is partnering with various university departments to invite this diverse set of speakers to discuss different approaches to addressing poverty in this year’s seven-week series.
All events are free and open to the public, and will take place at noon on Fridays in room ECC 1840 at the School of Social Work, unless otherwise noted. U-M students can enroll in a course to earn one credit for attending the speaker series.
Here’s the speaker series lineup:
- Sept. 22 – “Weathering: The extraordinary stress of ordinary life in an unjust society” by Arline Gerominus, professor of health behavior and health education, School of Public Health, U-M.
- Sept. 29 – “The United States pays reparations every day—just not to Black America?” by Cornell William Brooks, Hauser Professor of the Practice of Nonprofit Organizations, professor of the practice of public leadership and social justice, Harvard University.
- Oct. 6 – “The power in a single story: Scaling social change by focusing on individuals” by Adam Selzer, co-founder and senior director of Civilla Detroit.
- Oct. 13 – “Chelsea Eats: Basic income and food security” by Jeff Liebman, director of the Taubman Center for State and Local Government; Robert W. Scrivner Professor of Social Policy, Harvard University.
- Special date and location: 12:30 p.m. Oct. 18 at the Michigan Union – “Incarceration and its aftermath: How art can create pathways to reintegration and healing” by Reuben Miller and Nicole Fleetwood, MacArthur Fellows. Miller is an associate professor of social work, University of Chicago, and Fleetwood is a professor of media, New York University.
- Oct. 20 – “Creating green energy and equitable enterprise in Detroit” by Jerry Davis, Gilbert and Ruth Whitaker Professor of Business Administration, professor of management and organizations, U-M Ross School of Business.
- Oct. 27 – “Creating moves to opportunity: Experimental and mixed methods evidence on neighborhood choice” by Stefanie DeLuca, James Coleman Professor of Sociology and Social Policy, Johns Hopkins University.
- Nov. 3 – Poverty Solutions alumni panel
Contact: Lauren Slagter, firstname.lastname@example.org
ANN ARBOR – Entrepreneurs, self-employed people, owners of formal or informal small businesses, gig workers, and people with side hustles who have low incomes can apply Oct. 2-13 to receive monthly payments from Guaranteed Income to Grow Ann Arbor (GIG A2).
After the application window closes, 100 eligible applicants will be randomly selected to receive payments of $528 per month for two years, starting early in 2024. Recipients can use the money however they want – no strings attached. They will be asked to complete three surveys over the course of the two-year pilot, answering questions about how they use the guaranteed income money; other experiences such as affording food, housing, and child care; and their health and well-being.
Another 100 eligible applicants will be randomly selected to participate in a research study of the guaranteed income program, but they will not receive the cash payments. They will be paid as a token of appreciation for taking similar surveys as the participants who receive the payments.
The City of Ann Arbor selected Poverty Solutions at the University of Michigan to manage the guaranteed income pilot and conduct a research study to measure its impact.
“This guaranteed income pilot is about celebrating residents who do much to strengthen our community but are still struggling to make ends meet. The funded and unfunded participants are both vital to the success of the research study, which will allow other communities across the country to learn from Ann Arbor’s approach to guaranteed income,” said Kristin Seefeldt, an associate professor of social work and public policy at U-M and associate director of Poverty Solutions, who is the lead researcher for the guaranteed income pilot.
To be eligible for the monthly payments, applicants must:
- Live in the City of Ann Arbor and be at least 18 years old.
- Have an income at or below 225% of the federal poverty line. People who currently receive or are eligible for any type of public assistance (SNAP, TANF, Section 8, Pell Grants) likely qualify.
- Be an entrepreneur, owner of a formal or informal small business, independent contractor, provide paid services informally, or a gig worker. Many different activities meet this criteria, from doing hair, to shoveling snow, to selling art and performing.
More details on eligibility and how the program works are available on the Guaranteed Income to Grow Ann Arbor website, www.giga2.org. The application will be available online, and there will be in-person opportunities in the coming weeks to learn more about the pilot and to receive assistance completing the application.
In 2022, Ann Arbor City Council allocated $1.6 million of the city’s federal American Rescue Plan Act funds to a basic income pilot. After reviewing proposals for how the pilot program could be structured and evaluated, city staff recommended partnering with U-M Poverty Solutions, and the city council signed off on the proposal in June. In August, U-M’s Institutional Review Board approved the design of the study.
The pilot is supported by several community partners, including Friends in Deed, Ann Arbor Area Community Foundation, Ann Arbor District Library, Express Your Yes Foundation, Groundcover News, and Washtenaw Community College’s Entrepreneurship Center.
Contact: Lauren Slagter, email@example.com
DETROIT– As Detroit children prepare to return to school, widespread and chronic housing instability among city residents poses a threat to students’ ability to perform well academically.
New research from the University of Michigan’s Poverty Solutions and Wayne State University’s Detroit Partnership for Education Equity & Research (PEER) analyzed survey data with responses from more than 1,400 Detroit parents plus in-depth interviews with 20 parents identified as homeless or housing unstable. A policy brief summarizes themes from the parents’ experiences and offers policy recommendations that would promote housing stability and help ensure Detroit children have an equitable opportunity to learn.
“Having a stable place to live is the foundation of academic success and many dimensions of well-being. Unfortunately, many Detroit parents describe a rental environment where short-term leases, poor housing conditions, and few legal protections mean they face a near-constant threat of displacement. This is a problem that schools cannot solve alone,” said Jennifer Erb-Downward, director of housing programs and policy initiatives at U-M Poverty Solutions and co-author of the policy brief.
Detroit has one of the highest rates of childhood housing instability in the country, and 11% to 16% of school-aged children experience homelessness. While federal law guarantees students experiencing homelessness the right to an education, schools do not always identify when students lack stable housing, and families are not always aware of their rights. As a result, many students without a stable place to live do not get the extra support and resources they need to participate fully in school. In the 2021-22 school year, 90% of Detroit Public Schools Community District students identified as experiencing homelessness were chronically absent from school.
“It was making it where it was hard for me to get my kids to school, and I almost lost my job because we didn’t have a stable home,” said one parent interviewed by the researchers. “It was hard because at the hours I would have to be at work, they would have to be at school, so sometimes they would have to miss school and go to work with me.”
The researchers found displacement is a significant financial drain on parents with school-aged children in Detroit. In the wake of a forced move, families need to replace lost possessions and pay repeatedly for application fees and security deposits at new rentals. This extends periods of homelessness for Detroit’s children and reduces family resources available to pay for school necessities – such as gas or car repairs needed to reliably attend school.
Parents also described long-lasting repercussions that continue years after housing loss first occurs. Because eviction filings are open records, parents report that rental screening practices exclude them from the majority of stable, quality rental units, even when they meet income requirements and can pay the security deposit.
“City government and the local court system can implement changes that would increase housing stability for Detroit’s children. We have opportunities to turn the tide of chronic housing instability in Detroit,” said Sarah Winchell Lenhoff, director of Detroit PEER, associate professor of educational leadership and policy studies at Wayne State, and co-author of the policy brief.
One way to stabilize housing for families with children is to ban evictions during the school year. The researchers pointed to the city of Seattle as an example of implementing that type of targeted eviction moratorium.
All of the parents interviewed said the lack of quality affordable housing is a barrier to housing stability. To address this, the researchers recommend the city enforce its existing rental code and expand Detroit’s affordable housing stock. Plus, the 36th District Court should refuse eviction filings for rental properties that are not up to code. Nine in 10 pandemic-era evictions in Detroit occurred at properties without a Certificate of Compliance (CoC), despite Detroit’s rental code requiring properties to be inspected and receive a CoC prior to rental.
The researchers offered the following additional policy recommendations to promote housing stability in Detroit:
- Implement rental application fee limits and require application fee refunds to tenants not selected for housing, in order to prevent predatory landlords from exploiting the scarcity and urgency of the rental market
- Ensure tenants have access to remote eviction proceedings to reduce the number of default judgments against Detroit tenants who do not attend in-person hearings
- Pass just cause and right to renew legislation, which would require that landlords justify evictions and lease non-renewals with a valid legal cause
Attendees discuss project ideas at the Detroit Financial Well-Being Innovation Challenge showcase held April 28, 2023, at Durfee Innovation Society in Detroit. (Photo by Creative Focus Productions)
Release courtesy of United Way for Southeastern Michigan
DETROIT — United Way for Southeastern Michigan, in collaboration with Poverty Solutions at the University of Michigan, has announced the next stage of the Detroit Financial Well-Being Innovation Challenge. Out of an initial pool of over 30 entries, six unique projects have advanced to the Pilot Stage.
Over the 12-month implementation period, six Pilot Stage grantees will receive up to $200,000 and ongoing technical support. Here are the projects moving forward from the Planning Stage into the Pilot Stage:
- Bikes4Employees: Led by the Detroit Greenways Coalition, this project aims to provide high-quality bicycles to Detroiters lacking reliable transportation, reducing expenses and improving employment sustainability while also promoting health benefits and reducing stress.
- Community Investment Trusts: Under the leadership of Doing Development Differently in Metro Detroit (D4), this initiative seeks to pilot the use of Community Investment Trusts (CITs) to facilitate community ownership of real estate and build wealth in low-income communities.
- Credit Escalator: Led by GreenPath Financial Wellness, the Credit Escalator project plans to change banking systems for communities of color in Detroit. The service combines financial coaching with a personal loan, aiming to improve credit scores as the loan is repaid.
- East Chadsey Condon Alliance (ECCA): Led by the Southwest Economic Solutions Corporation, the ECCA’s Diversified Community Investment Fund (DCIF) offers all Detroiters a chance to invest in and participate in community development projects.
- Family Mobility Savings Program: Under the stewardship of Communities First (CFI), this program will jumpstart emergency savings, helping Detroiters meet their immediate needs while setting the foundation for their financial future.
- Home Repair Clearinghouse: Another initiative by Doing Development Differently in Metro Detroit (D4), this project aims to serve as a hub connecting low-income homeowners with contractors, streamlining the home repair process and advocating for homeowners.
These six projects were chosen from among 17 projects participating in the Planning Stage, which ran from Aug. 1, 2022, through March 31, 2023. During the Planning Stage, grantees worked to test assumptions critical to the success of their new ideas, develop partnerships, and create the processes and materials necessary to launch a functioning pilot. The six projects advanced to the Pilot Stage demonstrated the strongest readiness to implement and alignment to the goals of the challenge. They will kick off their pilot operations this fall. To assist them throughout the implementation process, United Way will also provide:
- Program evaluation services from University of Michigan’s Poverty Solutions.
- Tailored coaching and consultation services to enhance capacities in pilot implementation, strategic planning, marketing and communications, qualitative data collection, and more.
- Regular opportunities to exchange ideas, reflect on lessons learned from implementation, and share the impact of their work.
United Way will continue to maintain transparent communication with the grantees in the Pilot Stage, the third and penultimate stage of the innovation challenge, to identify any support needs and requests for additional technical assistance. They will also help grantees measure the efficiency and impact of the programs.
Megan Thibos, director of economic mobility at United Way for Southeastern Michigan, highlights the underlying rationale for the challenge: “Detroit residents face unjust systemic barriers to financial stability. This includes high living costs, unpredictable low incomes, and inaccessible credit. These grants aim to support the development of innovative, sustainable solutions to enhance financial opportunities for Detroiters.”
The Financial Well-Being Innovation Challenge originated from the 2020 University of Michigan Poverty Solutions report, The Financial Well-Being of Detroiters: What Do We Know? The findings revealed that a mix of low and volatile incomes and disproportionately high costs make it difficult for Detroiters to effectively manage their finances. The Challenge looks to address these systemic issues with innovative ideas that can completely change opportunities for Detroit families.
Leonymae Aumentado, senior project manager at Poverty Solutions, commended the project teams on their big ideas.
“We are thrilled to continue supporting these dedicated organizations in piloting their new and game-changing programs, thoughtfully designed to improve the financial well-being of Detroiters. The Challenge itself is innovative in its approach of providing funding to build and test never-before-done program models as well as providing dedicated research and evaluation support to ensure the project teams can both do the work and rigorously measure the impact of their work,” Aumentado said.
The Detroit Financial Well-being Innovation Challenge will continue through 2026. Scale Stage grants, anticipated to be awarded in late 2024, will fund selected projects up to $1 million based on the results of the Pilot Stage.
The Challenge is made possible through funding from JPMorgan Chase, Comerica Bank, General Motors, and United Way for Southeastern Michigan.
For more details about the Detroit Financial Well-Being Innovation Challenge, visit: UnitedWaySEM.org/FWBIC. To learn more about the work of United Way for Southeastern Michigan or to contribute, visit: UnitedWaySEM.org.
About United Way for Southeastern Michigan
United Way for Southeastern Michigan, a member of the United Way Worldwide network and an independently governed 501(c)(3) nonprofit organization, works to help households across Wayne, Oakland, Macomb, and Washtenaw counties become stable and ensure children have the support they need to thrive. For more than 100 years, United Way has been a leader in creating positive, measurable, and sustainable change in communities throughout southeast Michigan. United Way works in partnership with donors, agencies, corporate and municipal partners to help families meet their basic needs of housing, food, health care and family finances, and ensure children start school ready to learn and graduate ready for life. To give, advocate, volunteer or learn more, visit UnitedWaySEM.org.
About University of Michigan’s Poverty Solutions
Poverty Solutions is a university-wide initiative at the University of Michigan that partners with communities and policymakers to find new ways to prevent and alleviate poverty through action-based research.
Poverty Solutions research assistants support groups advancing Detroit financial well-being projects
By Lauren Slagter
DETROIT – Getting money into the savings accounts of some Detroiters is more challenging than one might think. Before people can think about long-term financial planning, they need their immediate needs met. And those opening bank accounts for the first time may face hurdles gathering the necessary personal identification documents.
These were some of Communities First’s takeaways from a small-scale pilot of its new Family Mobility Savings Program that deposited money into savings accounts for eight people as compensation for completing financial literacy and job readiness tasks. Communities First was one of 16 teams participating in the Detroit Financial Well-Being Innovation Challenge that shared their progress so far at a showcase event on Friday, April 28, hosted by GreenLight Fund at Durfee Innovation Society.
The five-year challenge that launched in February 2022 is run by United Way for Southeastern Michigan in partnership with the University of Michigan’s Poverty Solutions, whose research on the financial well-being of Detroiters motivated the challenge. Six to eight of the project teams will be selected this summer to continue to the pilot stage, where they will receive additional funding and technical assistance to start implementing their ideas.
“Not all of the organizations are going to make it to the next phase. But an event like this is really important because it helps to generate outside interest in these pilots so they can explore other paths to move forward on,” said Leonymae Aumentado, strategic projects manager at Poverty Solutions, who supports the implementation of the challenge.
At the showcase, Communities First staff outlined their plans to enroll 100 people in a six-month pilot of the Family Mobility Savings Program. To help them prepare to expand the savings program, U-M Poverty Solutions research assistant Nick Voelkner identified and analyzed barriers to financial security for Detroiters, including banks’ reliance on consumer reporting agencies to screen potential patrons, predatory lenders, overdraft fees, people’s distrust of banks, and low levels of financial literacy.
“It was really helpful and gave us different eyes to look at things,” said Ashley Strozier, family mobility coordinator at Communities First. “I’m not a data person. I’m person-to-person. The data gave me different things to aim for.”
In all, 14 Poverty Solutions research assistants provided support to Financial Well-Being Innovation Challenge teams, gathering information on topics ranging from community land trusts to demographics of Black workers in Detroit and the barriers faced by small business owners and entrepreneurs.
“The goal for the research assistants doing this work is to support the organizations,” said Aumentado, who oversaw their work. “I also saw it as an opportunity for the research assistants to build a set of skills that are going to be useful to them if they want to work in this type of space.”
Voelkner (MSW ‘23), a Brighton native, addressed research questions for Communities First as well as Southwest Economic Solutions and GenesisHOPE. This was his first time working on financial well-being issues, and he was struck by how many banking policies benefit only the financial institution while negatively affecting people’s ability to accumulate savings.
“Everything I’ve learned from Poverty Solutions has been so helpful,” Voelkner said. “It’s not only the memo writing, but how to structure it and convey information in a way that’s accessible and understandable and how to select information that’s really relevant.”
Kyra Reumann-Moore (MPA ‘23), originally of Philadelphia, said she also appreciated the experience she gained writing policy memos and analyzing qualitative research. She worked on research questions for the National Black Worker Center, a Black workers’ rights advocacy organization with 10 centers across the country and nine more centers in an incubation phase.
The organization is exploring opening a Detroit location, so Reumann-Moore gathered information on Black worker demographics, employment levels, and wages in Detroit as well as the history of the local labor movement and the migration of Black workers to Detroit. The research memo was so helpful that LaRonda Schenck Scott, development director for the National Black Worker Center, said she’s interested in having Reumann-Moore complete similar research for the other nine cities incubating Black Worker Centers.
“I gained a lot of knowledge that will be transferable to how I go about understanding the context of different cities,” Reumann-Moore said. “I love how community-centric the challenge is and how they are trying to improve the financial well-being of Detroiters based on what they’re hearing from residents.”
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CHICAGO—New research from the University of Michigan points to the potential of public banking to better serve the financial needs of Chicago residents as the volume of complaints about private banking services has increased exponentially over the past decade.
Terri Friedline, U-M associate professor of social work and faculty affiliate of Poverty Solutions, worked with Ameya Pawar, a fellow with the Open Society Foundations and the Economic Security Project, to analyze 40,645 complaints about financial products and services made by Chicago residents to the Consumer Financial Protection Bureau between 2011 and 2022.
A new policy brief summarizes their findings and outlines considerations for a public bank in Chicago.
The number of consumer complaints rose from 785 in 2012—the first full year of operation for the CFPB’s Consumer Complaints Database—to 7,070 in 2021 and 7,696 in the first eight months of 2022, when the researchers began their analysis. The complaints came from residents of 67 ZIP codes in Chicago, and the researchers incorporated demographic data for those ZIP codes to analyze trends in the types of complaints filed by different populations.
“People need financial products and services to pay bills, send money to friends and relatives, buy a house and start businesses,” Friedline said. “Unfortunately, private banks and lenders often provide financial products on expensive and exploitative terms—especially to people who are poor and racially marginalized. The CFPB Consumer Complaints Database offers insights into how Chicago residents experience harms and problems from private banks and lenders.”
The analysis found a majority of complaints (64%) had to do with credit. The next largest categories of complaints were related to debt collection (12%), bank accounts (9%) and mortgages (8%). Credit increased in prominence as a percentage of overall complaints, rising from 23% in 2012 to 66% in 2021. This contrasts with the patterns of complaints about bank accounts and mortgages, which both comprised larger shares of overall complaints in 2012 and declined on average over time.
Chicago’s residents with low incomes and Black residents submitted complaints about credit-related products and services—for example, unauthorized charges on a credit card or incorrect information on a credit report—at substantially higher rates than their wealthier and white counterparts. More affluent and whiter communities submitted more complaints about bank accounts and mortgages than disproportionately poorer and racially marginalized communities.
Among the ZIP codes with the lowest poverty rates, 52% of total complaints have to do with credit, compared to 72% among ZIP codes with the highest poverty rates in the city. Similarly, 51% of total complaints among ZIP codes with the smallest shares of Black residents have to do with credit, compared to 72% among ZIP codes with the largest shares of Black residents.
“The analysis reveals differences in the types of financial products used by different populations and the problems they experience with those products,” Pawar said. “When we consider these complaints alongside evidence of historic and contemporary racist lending practices, it is evident that private banks and lenders are not equipped to support Chicago residents’ full and equal participation in the economy.”
Public banking is one idea for mitigating the harms and problems Chicago residents experience from private banks and lenders, according to the researchers. A public bank is a locally and democratically governed institution that can serve as the city’s fiscal agent; support a variety of banking products and services like bank accounts, credit and mortgage lending; and invest in the types of development communities need.
Rather than borrowing expensive debt from private lenders or using a private bank as a fiscal agent that reinvests profits elsewhere, the city of Chicago could establish a public bank mandated to invest locally and equitably, the researchers say. A public bank could be designed to equip Chicago residents with easy-to-access and inexpensive bank accounts, credit cards, home mortgages and business loans.
The researchers note the importance of gauging residents’ interest in establishing a public bank and having residents lead its design.
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On July 25, Jeffrey Morenoff, professor of public policy and sociology, and research professor at U-M’s Institute for Social Research, testified before the U.S. Senate Committee on Homeland Security and Governmental Affairs on the magnitude and implications of the undercount of Detroit’s population in the 2020 Census
In 2019, the U.S. Census Bureau estimated Detroit’s population to be 670,031 people. However, results from the 2020 Census purported a count of 639,111, suggesting that the city had singularly lost over 30,900 people, or 4.6% of its population, in one year alone.
Concerned by the likelihood of an inaccurate Census count, Detroit Mayor Mike Duggan’s office asked Jeffrey Morenoff and other researchers at the University of Michigan and Wayne State University to undertake an independent study to determine whether there was evidence of an undercount in the 2020 Census.
Examining the data from this study, Morenoff discussed the existence of an undercount, its causes, and ideas for improving future Census accuracy before the U.S. Senate committee.
“If Detroit really had lost over 30,000 people from 2019 to 2020, I would have expected to see a somewhat comparable decline during the following year, but this is not what the data show,” Morenoff said in his testimony. “In short, the 2020 Census population count for Detroit was anomalous and difficult to reconcile with the city’s population trend over the prior decade or its estimated population change from 2020 to 2021.”
Morenoff and his collaborators build their inferences from a comprehensive analysis of population trends in Detroit and other comparable cities, a visual audit of housing in 4,350 Census blocks, and United States Postal Service Data. Although researchers do not know for certain the scale of the undercount citywide, if undercounts of a similar magnitude are found in a majority of the city’s more than 600 block groups, the ultimate size of a population undercount could be in the tens of thousands.
To improve the count of Detroit and other cities in the future, Morenoff argued that local governments should be permitted continual access to specific information about which housing units are accounted for in the Census’ Master Address File before, during, and after the Census enumeration period.
Other witnesses at the hearing included: Duggan ; N. Charles Anderson, President & Chief Executive Officer of the Urban League of Detroit & Southeastern Michigan; Jane C. Garcia, Vice Chair of the Latin Americans for Social and Economic Development; Maha Freij, President & Chief Executive Officer of the Arab Community Center for Economic and Social Services; and Kelley J. Kuhn, President & Chief Executive Officer of the Michigan Nonprofit Association.
Watch the hearing >
Speakers start at 18:15 minutes.
DETROIT – A new Detroit Land Contract Buyer Guide launched in conjunction with National Homeownership Month offers step-by-step guidance for housing counselors and prospective and current buyers on how to connect with resources, identify predatory or fraudulent situations, and successfully purchase their home. Land contracts are a valuable tool to achieve homeownership, but buyers often lack the support they need to navigate the purchasing process successfully.
The City of Detroit, Enterprise Community Partners, and University of Michigan’s Poverty Solutions co-authored and published the buyer guide. The guide includes information, do-it-yourself checklists, and guidance on risks for before signing, at signing, after signing, and after paying the land contract in full. The guide and additional resources, including materials in Spanish, are available at www.detroitlandcontracthelp.com.
These resources are the result of a grant from Center for Financial Empowerment to the City of Detroit, to support consumer financial protection issues in the city.
“The City of Detroit is committed to supporting homeownership, and we know that many Detroiters attempt to purchase their homes on land contracts without the benefit of support. The Detroit Land Buyer Contract Guide and supportive resources are part of our effort to fill the knowledge gap, connect buyers to resources that can help them avoid potential scams, and successfully navigate the home-buying process,” said Michele Oberholtzer, Chief Policy Advisor for Detroit Mayor Mike Duggan and co-author of the Land Contract Buyer Guide. “We appreciate the legal experts, housing advocates and Detroit residents whose input shaped the guide, and we’re proud to offer this valuable resource to residents and housing counselors.”
A land contract is a real estate transaction in which the buyer makes monthly payments to the seller for the purchase of a property over time. The seller holds the deed until the purchase is fully paid, and the buyer has most of the other rights and responsibilities of ownership throughout the payment period, including paying property taxes and making home repairs.
Land contracts are valuable tools for prospective homebuyers and homes that do not qualify for traditional mortgages. Historical red-lining, lack of credit, or need for home repairs have led many to turn to land contracts in the City of Detroit. However, land contracts have often been used as a predatory lending tool with high interest rates, lack of protection through the buying process, and other terms that increase the likelihood the buyer will default.
Mission-driven organizations in Detroit have used supportive land contracts to enable homeownership for credit-constrained households, leveraging the flexibility of land contracts and to provide leniency, as well as wraparound and assistance to buyers.
Karen Ann Kling, senior strategic projects manager at U-M’s Poverty Solutions, and Evelyn Zwiebach, Director with Enterprise Community Partners, Inc. in Detroit, documented this approach and recommended policies to reduce the abuse of land contracts in a policy brief published in May2021. Those findings inspired the creation of the Detroit Land Contract Buyer Guide, with support from the City of Detroit’s participation in the Cities for Financial Empowerment Fund’s Local Consumer Financial Protection Initiative.
“Prior research on land contracts focused on the potential for exploitation. But we learned from Detroit nonprofit and community development organizations that land contracts are not inherently predatory,” said Enterprise’s Zwiebach, who also co-authored the buyer guide. “The Land Contract Buyer Guide empowers buyers, equipping them with the information they need to make informed decisions about their home purchase and identify red flags that signal a bad deal. This is a critical first step in getting more Detroiters onto the pathway of homeownership, which contributes to greater housing stability, upward mobility and generational wealth.”
With support from the Brookings Institute and Ashoka, Zwiebach and Kling are continuing their research on reforms to land contract policies and program interventions that would protect buyers and maintain the flexibility of land contracts.
“We see the potential for land contracts to increase homeownership rates, improve property values, and advance racial equity by providing an alternative path to homeownership for people who historically and presently have faced discrimination in the housing market,” said Kling, who co-authored the buyer guide. “The Land Contract Buyer Guide takes the guesswork out of the purchase process. And in addition to putting critical information in residents’ hands, University of Michigan is currently working with Enterprise Community Partners to inform discussions regarding how we can change Michigan law to make land contracts a safer tool.”
The City of Detroit also supports the following homeownership initiatives:
- Make it Home, which gives residents living in foreclosed houses the option to purchase the property before the foreclosure auction;
- Michigan Homeowner Assistance Fund, which provides funds to help prevent mortgage delinquencies, foreclosure, or loss of utilities due to financial hardship during the pandemic.
- HOPE, Homeowners Property Tax Exemption program
- Detroit Tax Relief Fund to pay delinquent taxes for low-income homeowners approved for the HOPE exemption. (313) 244-0274