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Creating Jobs and Wealth in Distressed Michigan Communities

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In this podcast, REI Research Assistant, Emma Gilbert, talks with 2022 Innovation Fellows, Tony Willis, Chief Equity Development Officer for LEAP, and David Palmer, Principal of DC Palmer LLC. Willis' 2022 Fellowship project is entitled "Exploring Communal and Cooperative Investment Models for Lansing" and Palmer's is titled "Growing a Well-functioning Homebuyer Ecosystem for Low-Median Income Detroiters." Summaries of the projects are seen below. Watch Willis' and Palmer's full presentations at the 2022 Innovate Michigan! Summit on August 18th, 2022!

Tony Willis

The United Way, in collaboration with other philanthropic institutions, has created a new measure known as ALICE, which stands for “Asset Limited, Income Constrained, Employed”, and represents the growing number of households in our communities that are above the federal poverty limit but do not earn enough to cover all their monthly household necessities. Contributing to this issue is growing wealth gap between Black and White households. It is imperative that economic developers create and deploy new programs that can assist those who are most susceptible to financial misfortune and economic immobility. Equitable Economic Development unlocks the full potential of the local economy by dismantling barriers and expanding opportunities for low-income people and communities of color. Through accountable public action and investment, it grows quality jobs and increases entrepreneurship, ownership, and wealth. The result is a stronger, more competitive community. This Innovation Fellowship will focus on exploring communal and cooperative investment/business models, specifically worker-owner cooperatives and community investment trust, that could be deployed in the Lansing region to combat the economic instability that has become prevalent within the last decade. Both models provide pathways for increased income and asset acquisition that position owners/community members with a greater chance to grow wealth.  

David Palmer

There is a long-term, largely unmitigated, affordable housing crisis in the City of Detroit, with a long history of housing segregation, redlining, and their historic impact on. Focusing on the period from 2015 to 2019, data makes clear that the traditional mortgage market does not serve the needs of Detroiters. This Innovation Fellowship will build upon 2021 research to seek solutions to a systems level market failure. There are incredibly limited avenues for low-median income Detroiters to become homeowners. This project will become a natural outgrowth of the paper David Palmer authored in 2014, with support from Prior 2020 Innovation Fellow Angela Barbash’s, “Community Based Investing: Crowdfunding and the Michigan Invests Locally Exemption” project. Palmer’s project will expand upon the actors Barbash mapped in 2020, as well as add to the “Community Capital Accelerant” project that Chris Miller established in his 2021 Innovation Fellowship. The economic development challenge addressed with this project will address a specific systems failure in the City of Detroit, leveraging the tools and building upon the work of Barbash, Miller, and many others to develop solutions not currently available in the marketplace.  

The economic development focus of this project is significantly different from previous REI projects focused in Detroit. This project will focus on building solutions to systems level failures. The economic development focus of this work includes three components:  

1. Homebuyer education: improved outcomes through regular facilitated convening and improvement to data tracking and reporting. 

2. Community Development Fund: organizations in Detroit need access to a funding source(s) that will make slow money available to finance the acquisition, renovation, and sale of properties to low-median income Detroiters. 

3. Portfolio Mortgage Fund: low-median income Detroiters who have completed homebuyer education training are not well-serviced by traditional mortgage lenders.  

A portfolio product should be created to serve this population that has underwriting, income, credit and loan amount standards that meet the needs of these borrowers. These points will evolve into a white paper during the term of this project. This Fellowship will provide the avenue, focus, and legitimacy needed to continue to grow these concepts into functioning deliverables. When this project is successful in convening and organizing scalable solutions, it will provide a template for similarly situated communities in Michigan including Flint, Saginaw and Benton Harbor. 

Download the transcript