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Advancing Household Financial Stability in Detroit

This and other transcripts on this site have been provided by a third-party service. The video replay should be considered the definitive record of the event.

AMY BICKERS: Good morning. My name is Amy Bickers. And I'm the Assistant Vice President for Public Affairs at the Federal Reserve Bank of Chicago. I'd like to welcome you to the Chicago Fed's Project Hometown event on advancing household financial stability in Detroit.

As we gather here today, Detroit continues to face the dual challenges of the COVID-19 virus and a troubled local economy with a combination of uncertainty and hope. The pandemic, and efforts taken to contain its spread, have exacted a heavy toll on the livelihoods of many people in the city. Detroit's struggles are also rooted in its history of racial inequality, which has made it extraordinarily difficult for generations of the city's black residents to thrive.

At the Chicago Fed, we're committed to taking an active part in helping the community to heal the scars of the past and to create a more just and equitable future. In 2020, the Federal Reserve Bank of Chicago launched Project Hometown to examine how our hometowns can recover from the pandemic, overcome long standing inequities, grow stronger, and provide all people with the opportunity to thrive.

Today's event is one in a series of forums that have brought together civic leaders, policymakers, researchers, Chicago Fed staff, and concerned residents. In late 2012, Project Hometown hosted a Detroit community forum on how to build a strong and more equitable future for the city. Today, we'll focus on the factors that shape the financial stability of Detroit households, such as education, housing, and transportation, and the work that's underway to improve them.

The pandemic continues to have a disproportionate impact on the least advantaged residents of Detroit. Lower paid workers are hit the hardest. Those in the restaurant, hotel and entertainment industries are experiencing among the highest rates of job loss. And more than a few of these businesses have closed permanently. Many of the newly unemployed have limited personal savings to cushion the blow.

To discuss these challenges and the work underway to solve them, I'm delighted to introduce our distinguished panel, Dr. Darienne Hudson, President and CEO of the United Way of Southeastern Michigan, Kristen Holt, President and CEO of Green Path Financial Wellness, and Kim Trent, Director of Prosperity from the Michigan Department of Labor and Economic Opportunity. I will not read our panelist's biographies, so I encourage you to view the ChicagoFed.org/hometown.

I thank the three of you for joining us. And we'll start with opening remarks from each of you before we launch into our discussion. So let's start with Dr. Darienne Hudson of the United Way of Southeastern Michigan.

DR. DARIENNE HUDSON: Good morning, everyone. And thank you, Amy, and to the Federal Reserve, for inviting us here to speak with you today. This is a heavy topic. And it's an important discussion. And I'm so glad that we're having it at the time that we're having it because I think people are still, maybe, under the impression that the pandemic is over. But we are still very, very immersed in what's happening with the pandemic.

And I think we'll hear a lot of people say that Detroit was brought to national prominence again or given a lot of national attention during the pandemic. But as Amy outlined, these have been issues that have been impacting us for quite some time. And the pandemic actually exacerbated some of those challenges and issues.

I wanted to share a little bit with you about ALICE. And ALICE is an acronym. It's something that you will hear spoken of quite frequently in Michigan. But it's also 16 other states that are participating in this important study ALICE stands for Asset Limited, Income Constrained, and Employed. This was a research study that was actually conducted originally in 2010 by Rutgers University in New Jersey. And it gives us a picture of what a household stabilization budget looks like, so the bare minimum that it would require for our families to be able to meet their most basic needs.

And to give you some numbers attached to that, the federal poverty level for a single person is $12,000 of annual income. The ALICE level is actually 24,000. And then if we were to look at a family of four where the federal poverty level is $24,000 a year, the ALICE level for southeastern Michigan is 74,000 for a family of four. These basic needs include things like housing, food, technology, which obviously is playing a huge role during the pandemic, but also transportation and child care and health care. And so some of the things that we take for granted, these are actually quite hard for many of our families to attain.

The percent of families who would qualify as ALICE in the state of Michigan is 43%. Now, if you start to look at this by the indicator of race, 60% of our Black Michiganders qualify as ALICE. And so the pervasive racial inequities that have existed in our country for a long time, Michigan most definitely is seeing those at alarming rates. So I did want to share some figures with you.

But I want to also say, remember that these are our neighbors, these are our families. ALICE is all of us. None of us are too far removed.

If you look at the city of Detroit or look at the city of Pontiac, 74% of our families would qualify as being ALICE. There is no other indicator. Even with millennials being one of the fastest groups that are qualifying as ALICE or white seniors being one of the fastest groups growing into ALICE, there is still no other indicator that is more pervasive than race, across all of these different issues that I was speaking to.

And so this has forced us to do much deeper study into looking at why we are in this position. When we look at the wages in the state of Michigan, 61% of all of our jobs actually pay $20 or less. And I'm sure that some of our guests are going to be speaking about that as well, so I won't go too far into that. But when you start to talk about families being able to meet their most basic needs, these are the barriers. Just the way that many of our opportunities are structured for our families in Detroit, it's creating and perpetuating some of these gaps that we see.

We recently commissioned a report from the University of Michigan's Poverty Solutions. It's called the "Financial Well-being of Detroit Residents: What Do We Know?" And it impacts quite a bit of these different factors and indicators that we're speaking about today, and just some of the realities that our families are facing. We have nearly one third of our families with incomes below $30,000 that say that, since the COVID outbreak, they're actually saving less money than they were before.

But at the same time, there is encouraging news that 40% of our families who are below $30,000 said they're actually saving more because of the pandemic. There's quite a few efforts on the ground when it comes to lending to support small businesses, when it comes to microloans and microgrants to help our residents that are falling on hard times because of the pandemic. But we also have statistics that show us that things were difficult prior, too.

I'll share another around bankruptcy. And between 2008 and 2015, we had 43,020 consumer bankruptcy cases. And when you look at the national average, we are well above the national average. If the national average of bankruptcies without a lawyer was 8%, in Detroit it's 18%. And so I could go through a number of different statistics that really show that even the most challenging circumstances as it relates to financial well-being-- Detroit is elevated above the national average.

So I'm glad that we are having these difficult conversations. Even as a leader of United Way and talking about these statistics, these are people. These are our neighbors. These are families. It's us. And none of us are too far removed from knowing what it's like when you're living paycheck to paycheck or even when one paycheck isn't enough or not having a paycheck.

And I remember being a teacher. I worked three other jobs to help make ends meet. And that was in Detroit 20 years ago. And so this is an important topic. It's also one that's personal. So with all of the stats that I share, one thing that I just ask all of us to continue to do is, using these platforms, to make sure we're not only lifting the data and sharing it but that we're taking action on it.

So I'm looking forward to the conversations that we have today. Again, I know I've shared a few reports. I'm happy to put them in the chat to share with our colleagues. But it's just very important to me that, as we're speaking about this, I have to continue to stress, one, that we are still in the pandemic, two, that it's going to take all of us and a number of partnerships to help our families, our neighbors who are struggling to be able to get out of this.

But we don't want to return to normal. We want to return-- or actually make sure that we're moving to a better state where we become more resilient and that our families are able to buffer themselves from this type of hardship that's coming in the future, not just because of crises but just because of some of the barriers that have been out of their control. So I'll stop there and just want to say thank you again for having me here, and looking forward to hearing from my colleagues.

AMY BICKERS: Thank you very much, Dr. Hudson. And I will now pass it over to Kristen Holt who leads Green Path Financial Wellness to hear from her. Thank you.

KRISTEN HOLT: Thank you, Amy. And thank you Dr. Hudson. So right that this is such an important and timely topic. And this is really important to us at Green Path because we are a national nonprofit, but we were founded and we are based right here in metro Detroit.

And I wanted to share a little bit about Green Path in case you're not familiar. So we've been around for about 60 years. And we help people take control of their finances. We provide financial counseling, coaching, and education to empower people to lead financially healthy lives. And we've assisted millions of people with debt and credit management, homeownership education, and guidance for people to stay in their homes or purchase a home, foreclosure prevention, rental counseling, and student loan counseling.

And we talk to about 2,500 people per day. That's across the country. But we are really committed to Detroit and to improving the financial lives of people in Detroit. And we recognize that we need to better adapt our services in order to meet the unique needs of Detroiters.

Our commitment to inclusion, diversity, equity, and access means that we can't take a one-size-fits-all approach to our work. We have to seek to understand and embrace the differences and adapt and improve our programs and services to reach more equitable outcomes for the people of Detroit. Dr. Hudson referenced a few statistics that are really staggering where Detroit really shows up at a disadvantage. And just to add one more to that, Detroit ranks among the bottom five US cities in median credit scores. And we know through our work that credit scores, along with a lack of savings, are huge barriers to improving financial resiliency.

Detroiters want to break the cycle of financial insecurity and build generational wealth. But many Detroiters are facing these low volatile incomes, higher costs like property taxes and insurance, the savings barriers. They may have high levels of debt. And this has only gotten worse since the pandemic.

So our mission is to connect with those impacted people and provide options and resources as a trusted nonprofit. We really want to reach those who have learned, and rightly so, a distrust of financial institutions. We are empathetic, nonjudgmental. And the biggest thing that we hear from the people who call us is that they wish they would have called sooner. But often, there's just that barrier or that fear of judgment or fear that there might not be options.

We know that we have opportunities to remove the mystery from personal finance and the fundamentals of credit and be more accessible and relevant to Detroiters in their current situation. So a lot of the resources that are out there that are readily available are tailored more towards standard employment or standard banking situations. And that might not fit a person's life.

So we want to provide accurate and actionable information that people might have already heard but just confirm it and be able to make sure it's tailored to their personal situation, which might include regular hours combined with side jobs or small businesses that they're starting. And we know those income sources have really been impacted by the pandemic. So we want to make sure we're meeting people's needs right now where they're at.

One of the projects that we are launching is the Detroit Voices Project, which is a survey of Detroiters, to hear directly from residents on what managing money in Detroit really feels like. So that's on our website. If you Google Green Path Detroit Voices, you'll get to it. But our goal, really, is to help Detroiters better navigate this challenging time and the complex financial decisions. So thank you again for having me today.

AMY BICKERS: Thank you very much, Kristen. And now I'll pass it over to Kim Trent from the Michigan Department of Labor and Economic Opportunity. Kim, you are on mute still.

KIM TRENT: Well, someone had to do it today. Might as well be me. Sorry about that. Seems like you would figure that out after having been doing these meetings for nine months. But I'm a little slow.

It's such a pleasure to be with you today. Thank you so much for the invitation to join you on behalf of the Michigan Poverty Task Force. I am Deputy Director for Prosperity for the Department of Labor and Economic Opportunity.

And in that role, we say that our division is designed to power prosperity by empowering people. We strongly believe that in order for us to have prosperity in our state, we have to really be passionate about helping struggling Michiganders in a really strategic way. And that's what we're doing with the Poverty Task Force.

You will be hearing-- this month, we will be announcing our Poverty Task Force recommendations. We have a report that we have presented to the governor and will be making public very soon. We're very excited about it. This task force was set up by Governor Whitmer in December of 2019. I joined the State in January of 2019. And we all know what happened in January, 2020 and in March of 2020. We know that, unfortunately, our world experienced the scourge of the coronavirus.

And so it is especially-- what has been laid bare by coronavirus is those disparities that exist and have always existed and persist in our community in Detroit and throughout our state as it relates to health, as it relates to wealth. And we, certainly, as we approach our work with the poverty task force, are approaching it with a race equity lens. We have to do that. We have to acknowledge the history that brought us to where we are today and be strategic about dismantling those policies that have prevented particularly people of color in our state from thriving.

And so we believe that there is no single solution to solving poverty. And that's why the governor has convened 14 department directors. Our task force is made up of 14 department directors because we wanted people who can actually move the needle for us. Our frame, Dr. Hudson would be happy to know, is the ALICE statistics.

We are looking at the ALICE rate as a frame for the people we are here to serve. While the poverty rate is certainly-- we certainly want to help those who fall below federal poverty guidelines. But we recognize that that's not enough. If we really want to move the needle, we really have to look at that 43% of Michigan families who struggle every day to make ends meet.

And again, our goal is certainly to give people who are living in poverty support while they're living in poverty but more importantly, to help them transcend poverty. That is certainly, really, the goal of the Michigan Poverty Task Force.

We have been working in four work streams. The first one is safe and secure, which is kind of the basic needs work that we're doing, ensuring-- that has been in full view because of COVID-- securing that people have housing security, food security, that they are able to keep their utilities. Then we have our strong beginnings workstream that talks about things like child care, which is something-- one of my divisions that I supervise is the Michigan Women's Commission.

They have studied how women have re-entered or not re-entered the workforce here in Michigan because of issues of child care. Parents are very reluctant to leave their children in child care facilities right now just because of the dangers of COVID. And we're trying to come up with some innovative solutions to support them. At risk youth interventions-- we know we have excellent programs in Detroit that are designed to help those youth make good choices so that they have a bright future.

Removing barriers-- and that's a lot of what we're going to talk about today-- those things in state government that hurt people, those things in state government that prevent people from being able to transcend poverty and generational poverty, particularly as it relates-- we're very interested in returning citizens, for example. There were a lot of barriers to the jobs they were able to get, housing opportunities. And so you may have heard about an expungement package that the Governor signed in November that will make it easier for people to get misdemeanors and felonies removed from their records when they have demonstrated they're able to live their lives in a way that is positive.

And we also have a fourth bucket-- I'm sorry. I moved this screen a little too early. But it's really about the long game. How do we put policies in place so that people don't just have a right-now solution but that long-term solution to transcend poverty.

For example, education. I'm a former University Board member. I am absolutely passionate about the power of a degree. We've long known that a college degree is the most effective anti-poverty strategy that there is.

How do we get more Michiganders to get post-secondary credentials? Not everyone is going to get a college degree. We recognize that. But we believe that we need to be at about 60% of the State's working population with a post-secondary credential. Right now we're around 46%. We have an ambitious goal of 60% by the year 2030. That's one of the Governor's signature initiatives. And I don't have to talk about ALICE because I think Dr. Hudson did that very well.

We are in danger of having a state where wealth is inherited. The only people who are thriving are people who come from families where they are exposed to a great education, where they have connections, where they have the built up asset. That's not who we are as Americans. And so we really want to remove the barriers that make it impossible for people to move up in their socioeconomic ranking.

So we have those four buckets, which I'll quickly go through-- removing barriers, as I mentioned, things like criminal justice reform that will prevent people from going to jail for low-level crimes until they are able to go for their court date. So often it's really a pauper's jail, almost. People are incarcerated because they can't pay fees and fines. We're really taking a deep dive at that.

Looking at behavioral health needs, training people in the criminal justice system to recognize those needs rather than incarcerating people who are mentally ill. Automating processes in our Department of Health and Human Services-- a lot of what we are really focusing on is, how do we make Michigan government more responsive to people who need help? So leveraging technology. And so we have a lot of pilots in place to ensure that it's easier for people to access those benefits when they need them.

The digital divide, as Dr. Hudson mentioned earlier, how absolutely critical it is for us. And again, this is laid bare by the coronavirus crisis. I have a son who's just a few feet away from me right now who was in school. We, unfortunately, had some problems with our cable at one point. And I really got to feel what it was like to be a parent who felt helpless, although we're very capable of having cable, paying for cable.

But for those parents who are struggling, we do have leadership in the city. We're happy to say that we stepped up to the plate to help address that problem. But we know it's persistent not just in Detroit but in rural communities. All over the state of Michigan we have to solve that problem. We are really focused on helping to lift children's savings account.

When we're talking about building wealth, that long-term strategy for building wealth, we've seen success in other states that have promoted children's savings accounts. And so we're looking at, with our poverty agenda, creating pilots both in a rural community and in an urban community to help to build those in communities, particularly where savings is a challenge.

And then our Michigan Reconnect and Futures for Frontliners, I think, have gotten a lot of attention for providing opportunity to those, particularly for Futures for Frontliners, Michiganders who risked their lives to ensure that we were still able to go to the hospital, that we were still able to go to the grocery store, to gas up our cars, all those frontline workers who, during that first quarter of the coronavirus challenge, now have access to be able to go to school tuition free and get those degrees or diplomas or apprenticeship programs so that they can climb the career ladder and have more financial stability. Michigan Reconnect will launch next month for all Michiganders over the age of 25 who want to get that credential as long as they don't already have one.

We are very excited about these programs. And again, we have a racial equity lens with Futures for Frontliners, for example. Because we're using federal dollars, we weren't able to use-- we weren't able to extend it to some immigrants. So we have now-- we're working to raise private dollars so we're able to serve that community because we know that, certainly, immigrants have served us during this coronavirus crisis. And we want to be mindful of including them in this effort to support them.

And then finally, safe and secure is our bucket where we talk about-- one of the, to me, undergirding message of our Poverty Task Force report is that our security net is woefully inadequate. Our TANF distribution is out of whack. We want to really examine whether the way we distribute TANF dollars is effective. We know that, while the national average for TANF distribution that goes directly to recipients for their basic needs is about 52%, here in Michigan it's about 17%. Not enough. And I think that we really saw that during the coronavirus crisis.

We want to use that as a platform. What we discovered, how we have to go back and retrofit a lot of our benefit programs to make them effective. We need to think about it from a long-term perspective.

I'm sorry. I forgot Strong Beginnings, which is our childhood poverty initiative. We certainly recognize that the way that a child starts life too often is a prescription for how they will end life. We want them to get the supports that they need to be able to thrive. And so things like our Tri-Share pilot, which I'm very excited about-- my team is working on, which we actually just released an RFP for organizations that want to manage a program that we have that matches state-- so if a parent wants to get child care but can't afford child care, they would be able to get support. The employer can put in a third, the state will put in a third, and that employee will put in a third, making child care a lot more affordable for Michigan families.

We're currently standing up a pilot in Muskegon. We're looking at two other communities. We think it's desperately important that we help particularly working mothers who want to re-enter the workforce, give them the opportunity to get their kids quality child care. And again, increasing income eligibility for child care services-- we think that if more parents were eligible for those services, they could re-enter the workforce or get the training that they need to climb the career ladder.

I'm happy to answer any questions that you have. I'm really excited about this conversation.

AMY BICKERS: Thank you so much, Kim. So now I'd like to focus on a particular phrase that you used, which is removing barriers. And you cited some examples, particularly with education. You talked about the importance of policy for long-term solutions. And I'd love to hear from Kristen Holt of Green Path and Dr. Darienne Hudson of the United Way to talk a little bit about that theme of removing barriers and how you see that manifesting in the work that your organizations do.

KRISTEN HOLT: I can start with more of a generic barrier. I think right now, because people are under so much stress because of the pandemic, because of the uncertainty, we're seeing this phenomena of, basically, paralysis where people can't think. It's proven. When you're under stress, your brain literally is not going to function. And so they can't think about, what is that that I can do that would be in my best interest, that would help me out right now?

And so at Green Path, we are running these financial counseling and coaching programs. You would think we would be really busy right now. We're not. And we believe it's because of this barrier people don't-- they're afraid to call. They don't want to deal with it. They don't know that there might be things that they can do that could help their situation. And they're just frozen in that paralysis.

And so if we can encourage people to make that phone call to see, we find that people feel so much better after they talk to us and they have a plan. And it might not be perfect, but it's going to give them some concrete steps which will help them take some control back in a really uncontrollable situation. And that can make a tremendous impact to somebody being able to move forward and take some small steps to improve their current situation.

DARIENNE HUDSON: Thank you, Kristen. I'm so glad that you said just the paralysis that happens. Even just listening to you-- I'll just tell you. Our heat went out this morning. And it was one of those things like, OK, we're only one month into 2021, and it just feels like we're on repeat of what's been going on for the past year.

And it takes a moment to regroup before you can get a plan and continue. So I just wanted to acknowledge that because we take for granted-- sometimes we think it's so easy just to pick up and keep moving. We have two and one. It's an information and renewal calls referral call system.

And what we're seeing top five, regardless of what month it is and where we are in the pandemic, people are still calling for food, just to get access to food, for housing, stable housing, for utility assistance. And that includes water as well as electricity and gas. And then we're still seeing, of course, the questions about the vaccines and the testing locations.

So what I think about removing barriers-- a lot of times we put the onus on the individuals. And we have to start figuring out how to better integrate our services as the providers. I'll give you a really concrete example of the Michigan Energy Assistance Program that we operate in partnership with DTE, with Consumers Energy, and with the state of Michigan. And for people to be able to access these resources and be eligible for an instant payment of bills or even being on a long-term stabilization plan to help them pay their utilities month a month, they have to apply for resources from the state emergency relief fund first.

And then once they're proven to be eligible, then they apply and enroll in the MEAP program, the Michigan Energy Assistance Program. That can take anywhere from two to four weeks. And if you don't have power, if you don't have heat, if you don't have-- just able to run your home, it can be very discouraging for people. So like Kristen said that we expect to be busier than we are, we aren't seeing a lot of the numbers that you would expect with the pandemic that's going on. And so it's telling us that we have to make this process easier.

And in terms of what we're doing about it, I'm very proud to say that we've been partnering with DTE, with Civilla, with U of M Poverty Solutions, just as recently as yesterday, talking about how we can better integrate these services, how do we get our arms around this so we can make it easier for our families? Because it is daunting, I do think people are feeling defeated and deflated.

And we have to do our part. If we had to go through that just to get our power turned on, we wouldn't want to do it either. So I think it's putting ourselves in their shoes and figuring out, again, how we leverage the collective power and resources of all of these institutions to get our arms around these barriers and start to remove them.

AMY BICKERS: So you mentioned the importance of collaboration and of organizations joining together and working together. Are you seeing that on the ground? Is this something in Detroit where-- or any of you can cite examples of how cooperation is helping to make any positive change in the area of household financial stability?

DARIENNE HUDSON: I'm happy to go first. I don't want to dominate the conversation. But I can just give a quick example, well two examples. One, just our COVID relief efforts. This is just my United Way. There's 50 United ways in the state.

So we've raised $37 million plus. And it's a partnership with county governments, with foundations, with individuals, and with a number of our non-profit partners. We've been able to give out over 1,000 grants. And it's everything from keeping child care centers open for frontline workers to microloans for families and also to support food pantries, to support homeless shelters. So a wide gamut of resources.

And it's all been in partnership. It has not been one organization that's done this in isolation. So we have some really positive examples that we can take with us in terms of how we continue to operate in this way.

And the other, I would say, is Connect 313. And Kim has mentioned it as well. We're talking about closing the digital divide. And this is a collaborative effort with Quicken Loans, with the city of Detroit, with Microsoft and with United Way as the co-leads. But then, it's a host. It's over 100 people who are involved and in trying to help us close the digital divide. And more and more nonprofits are partnering with us to get devices in the homes for seniors and domestic violence shelters as well as schools.

And so these collective efforts are happening not, maybe, at the pace that we want to see them. But they are definitely happening. And I believe the results-- we're already seeing that we're making progress. And we just have to continue operating in this way far beyond the pandemic.

KIM TRENT: Yeah. Certainly, as I mentioned, the Poverty Task Force was designed to leverage all 14 state departments. And we really have-- one of our major goals is not to be siloed, that we would work collaboratively. And so one of the things that I'm thinking about is how-- we had a pilot this year because we know one of the major barriers to economic stability for returning citizens is the lack of identification. They don't have driver's licenses, they don't have state ID. It's impossible to get a job. It's impossible to get housing.

What we have done-- the Department of State has partnered with our Department of Corrections to do a pilot so that every incarcerated person who's leaving incarceration have a piece of ID when they leave. It seems like just a minor thing, but it really makes a huge difference in the ability to re-enter the workforce, to re-enter, to be able to get housing, to be able to get assistance.

So another thing that I remember, just is an example-- we recognize that joy-- when we talk about the ALICE population, these are working people who go to jobs every day. And some of them have never really necessarily had to tap into state resources, tap into state-- and so we have-- we've tried to be mindful of that during the COVID the crisis.

And so a lot of people rely on things like payday lending institutions, for better or worse. They are just trying to make ends meet, and they're just trying to not go into debt. They're trying to not be bankrupt. And so they're sometimes borrowing money from payday lenders.

We were trying to work with the payday lending industry to have information at their locations so that these people who are barely hanging on to middle class status or people who are at the top of the ALICE rate who are going in for these loans during the COVID crisis could also get information about how they can get food assistance, also get information about how they could get housing assistance or eviction diversion help, people who have never had to get those kind of resources before.

And so we're just trying to be responsive, even with partners that maybe traditionally wouldn't have worked with. And so that really was a partnership of DHHS, of licensing and regulatory assistance, and then working with the industry. So we're trying to be creative in coming up with solutions like that so that we are helping those folks who need help, sometimes for the first time, get the help that they need.

KRISTEN HOLT: And I just wanted to add, we have partnered historically with credit unions, which are often a trusted partner, especially to their members. And we have been working specifically with some of our partners to not only get the word out about resources but to really look at programs and products that might be put in place that would be more accessible to communities of color. We're working with One Detroit Credit Union in Detroit on some of those programs right now. And we are hoping, through that partnership, that we can connect people to resources that they should know about and should be able to access. But as you said, maybe they've never had to do that before. And so we're hoping by working through those trusted credit union relationships that somebody might already have in place that we can expand the reach.

AMY BICKERS: So how has COVID-19 changed what all of you do, changed your approach? Because obviously, there were challenges for many in Detroit before then. COVID-19 has certainly made things more difficult for many. How are you managing, given that very substantial extra challenge?

KRISTEN HOLT: I can start if you want. So we used to do some counseling in person. So obviously we had to go completely virtual, equip all of our contacts and our employees to work from home. And we were luckily able to do that pretty quickly because we had already piloted some of those things in the past.

The other thing we have done is really try to redesign some of our educational materials and provide materials that are much more timely with what's going on. So we have things like a checklist for renters and what to do if you need help with your rent, information on how to access the mortgage forbearance programs and navigating that and what questions you should ask. We have a great tool around accessing your stimulus check, and especially if you don't file taxes or something like that. There's different things you have to do in order to get that money and a way to track it.

So we have put all of those tools out on our website, which we never had those kinds of things in place before. We also put together an aligning priorities workbook which really tries to get more at the why and trying to get people out of that stuck and paralyzed place, but to really kind of step back and think about the why and think about what's important to them and then help them align their budget or their spending plan to those things that are important to them with whatever resources they're working with at the time.

KIM TRENT: As I mentioned, I started my job just about six weeks before the COVID outbreak. So I can't really speak definitively about pre-COVID because my whole time in state government has been with a COVID frame.

But I can tell you that state government has really tried to work hard to pivot in so many ways. Just one example that stands to this stands out is that the time limits for unemployment, which is in my department, Labor and Economic Opportunity, our unemployment insurance agency have had to basically remake everything that they do. Again, we are not able to meet people in person. We've had to give out exponentially more benefits to people in the early days, particularly, of the COVID crisis. We've had to change the time limits for the amount of weeks that people are eligible for unemployment insurance.

We had to stand up an eviction diversion program-- mission is also part of LEO-- we knew that, for a while, there was a moratorium. When that moratorium expired, we knew there had to be some other solution so that people would not, at a time when we're in a public health crisis and the best way to keep those numbers down is to have social distancing, then increase the number of people who are at homeless shelters. We knew that that was not going to be a tenable path forward.

So our eviction diversion program has been very aggressive. Food assistance-- because we know so many families, so many children are able to get food at school, and a lot of times now school is not an option, pivoting to allow students-- actually, my son, even. Although we're not eligible for free or reduced lunch benefits because we go to a school where the majority of students are, even he received a Bridge Card-- we didn't use it, of course-- but just to ensure that there is food security among those Michigan families who really rely on those school lunches and breakfasts so that their families can go to the grocery store and get them good meals and allow them to have food security.

Even with all that, as we said earlier, there's still so many gaps. There's so many people, I think Kristen made an excellent point, who are just paralyzed. So there's a mental health component to all of this that we're going to have to figure out. I do think that people are going to be grappling with some form of PTSD when this is all over. And they're grappling with it now. It's difficult.

I live in Detroit. I had to stop counting the number of people I know who died from COVID because it was too depressing. This is a really serious thing. But I think state government has really been able to pivot and be a lot more nimble during this crisis so that we can serve Michiganders.

DARIENNE HUDSON: I'm glad you ended with that, Kim, about being nimble. That really has been the name of the game for all of us who are trying to do this work. We had just gotten to the place-- I had mentioned Two and One earlier where it's a call and referral service you can also access online. Two months before that, we'd started doing what we call Two on One in the community where people could actually come in person and meet with one of our community care associates. Obviously, we had to disband that almost as quickly as it started. And so many of our services, unfortunately, moved to being virtual.

We had quite a few opportunities, like VITA that's happening right now with working with income taxes-- all of that has moved to being virtual. So when we talk about the digital divide, the race, literally, to get devices in the hands of children and families has been a top priority for us. We have worked with a number of different school districts in Detroit and also the inner ring of suburbs who serve Detroit children because of open enrollment and having to work so diligently to make sure they had devices. We've partnered with Focus Hope to get devices in the hands of seniors.

So where I think maybe a year ago, folks might have thought that was a nice to have, very clearly it is essential to being able to access resources and services. We have town halls now with the community every week where we're bringing a number of different speakers in to talk about issues that matter, so everything across the spectrum. We've had them for veterans. We've had it for black maternal health. We've focused on employment. We've focused on the census and on election rates when it was during that time.

And so that's been a lifeline for us to be able to communicate with our neighbors as well as being able to hear their questions and their concerns to better inform our practices. I had mentioned earlier the COVID fund. We had to change the way that we were administering grants. We removed 90% of our application requirements in the beginning so we could just get these quick dollars out to the non-profits who were in need. We have recently received the McKenzie Scott gift of $25 million. And so it's forcing us to think very differently about how we are engaging with the community.

COVID has just blown the cover off of racial inequity. And it's a relief. I will just tell you, we talk about ALICE all the time. And Detroit is a code word for a lot of things. And now, finally, in all the different settings that I'm in, I'm hearing people say Black and say Black Lives Matter and saying that we need to do something about what's happening to our Black residents. And I think that there's a lot of uncomfort, but there was a whole lot of discomfort with that prior to COVID. And I think that's been a really positive change too, so.

I'd say say, lastly, the ability to bring people together. We're having this virtual event. Chicago reached out to us and said, hey, can you speak? And it doesn't take anything to make this happen. So this connectivity and bringing all of these different minds together, these partners together around this work has definitely been a game changer. And I know it's helped me learn and grow much more quickly than I would if I was doing this the old fashioned way, face to face. But also getting more important information to the community at a faster rate and giving us a quicker turnaround and taking action.

AMY BICKERS: You mentioned, Dr. Hudson, this racial inequity and what COVID has meant in terms of changing people's awareness, understanding, hopefully. We did receive a question from one of our attendees about, how do we bridge the gap of racial inequity in a city like Detroit? What kind of policies need to be changed? What kind of systems need to be changed to help reach a more fair and equitable state? So that question speaks exactly to what you raised. I'm just wondering what our panel would like to say about that.

KIM TRENT: Well, I think that when you look at Detroit, which is a city where the middle class is actually growing but the Black middle class is not-- and homeownership has stalled. To me, homeownership, particularly coming from LEO, is such an important measure of community health as it relates to financial health.

And when I grew up in Detroit, everybody I know owned their house, pretty much. It was just such a marker of financial success and stability. And we're seeing that slip away. And I think that the banks, city government, state government-- everybody should be strategic about helping to seed homeownership. It's just so important to a family's bottom line.

And certainly, not everyone is going to be a homeowner. We certainly understand that. But all of those things, all of those asset-building strategies that have always been important are especially important now because we are seeing the divide really widen, the racial divide widen as it relates to-- in fact, today in America, there are fewer African-American home-- the gap between white Americans and black Americans on home ownership is actually wider than it was before we had anti-housing discrimination legislation.

So it's important. And I think that a focus on that is really going to be critical if we're talking about building financial security for the city of Detroit and particularly for the black residents of our city.

KRISTEN HOLT: I'd like to build on what Kim said. So at Green Path, we have 100 HUD-certified counselors. And homeownership is a key part of what we do every day because we recognize it's such an important part of building assets. And in Detroit, historical redlining, discriminatory lending practices-- all of that has set the backdrop for some of the housing inequity in Detroit and the distrust of the systems. And lately, gentrification has also increased. And so homes have gotten to places where they might be unaffordable for the average Detroiter.

And so this, combined with some of the factors we mentioned previously like low credit score, can really be a barrier for homeownership. And so we are testing some new programs to help with that. We have a new tool for improving credit, the A1 credit tool. This has been designed, in part, with the feedback that we've gotten from the Detroit Voices to try to really meet the needs of people specifically.

And there's also a program that we do in partnership with Freddie Mac that is a matching program. It's a very new program. It's called Match Up. But it helps remove the barrier for somebody who might just need a little bit of help with that down payment. And it is combined with coaching as well to help them to be successful in that home purchase.

DARIENNE HUDSON: Yeah. And if I could just piggyback on what Kristen and Kim said, I would just add increasing the number of Detroiters who are banked is also just an area where we see a significant gap and worse numbers, I would say, than what we see in other states, for sure in other cities, for sure.

And so as we're thinking about improving our lending practices, making sure that they're more equitable, it's also-- when we think about the financial coaching and wellness that all of us are doing-- we have our centers for working families that are sponsored by Comerica Bank, and it's a partnership with 10 other non-profits-- that this conversation of being banked-- and Kim mentioned the child savings account.

And I'm so glad because that is truly-- when you talk about breaking the poverty cycle and changing family behaviors and practices, it starts when they're young and helping it to really make sure our young people understand the importance of savings and what it can do for them at a young age. And it can also help really change outcomes for families and having them understand.

Because it's not that people don't think it's important. We just have to make sure that people are actually making enough to save, that every single dollar isn't just going to meet their basic needs or pay bills. And so I'm so encouraged by this conversation. And I hope that we don't lose-- there's been a renewed focus on housing because of eviction moratoriums and things of that nature.

And I'm hoping-- there's hundreds of folks who are working on this issue-- that we don't lose that momentum. Because I do agree. If we can break that cycle-- and again, I think combined with lending practices and making sure that our families are banked, I do think we have an opportunity to make a real difference for Detroiters.

AMY BICKERS: So we're getting pretty close to the end of our conversation. And I'd like to hear a little more-- Dr. Hudson, you talked about some of the bright spots. I'd like to hear from all of you a little bit more about the successes that you've seen at this very, very difficult time and what continues to give you the most hope. So I'd like to hear a little bit from each of you on that. Why don't we start with Kristen Holt?

KRISTEN HOLT: Say, sure. I can't find my unmute button now. Thank you. So I would like to say that some of the things that give me hope is what we are hearing from our clients. And so after they call us, after they talk to us and they have a plan and a path forward, they are just so appreciative, and they feel unstuck. They've lost that paralysis, and they feel like they have something that they can do to move forward.

And so that gives me hope that people are able to access new programs, access benefits that were available to them that maybe they didn't know about, take steps to reduce their debt or to start building that emergency savings fund with some of the stimulus money. Even if it's a tiny amount, they're able to at least take that positive step forward to improve their financial health. And we do hear those success stories every single day.

KIM TRENT: I would say the thing that gives me-- makes me feel the most optimism is, in this work that we're doing for the Poverty Task Force, I am really amazed at how much goodwill there is for this effort. Frankly, poverty hasn't been a sexy topic in state government for a long time. It's always been framed, particularly the last 20 years, in how we can't prevent people from getting services. That has been the frame for far too long.

When we talk about reform, it hasn't necessarily been-- the reform that's taken place is making it much more difficult for people to get the help that they need and not giving it to them long enough. And so I think the mere fact that people are paying attention-- the positive thing that will come out of this horrible tragedy of COVID-19 is that it has made it obvious that what we're doing is not enough. And I'm hoping that those decision makers in state government will acknowledge that and that we can have a real conversation about rebuilding a safety net for Michigan that really works for Michiganders.

DARIENNE HUDSON: What gives me hope-- it really is the partnerships and the shift that I've felt in terms of national partners who are reaching out to us to want to connect us to other cities that have high percentages of African-Americans and also sharing best practices, but also looking at these barriers from a national perspective. And that includes everyone from Black Entertainment Television who had a fundraiser at the height of the pandemic to support us along with seven other cities around the country.

We're in a partnership now led by Debra Fraser-Howze Howells who is known in the health and equity space, and it's in partnership with the black clergy. And so everyone from Reverend Al Sharpton and Senator Raphael Warnock to Reverend Horace Sheffield right here in Detroit are working with us to help bring resources in the area of health equity to our families. We have partnership with Harlem Children Zone, starting with our children and focusing on their families as well and helping us close the digital divide, again, in partnership with six other cities around the country.

And lastly, I mentioned the McKenzie Scott gift. But we were one of 384 organizations. And about 40 of them were United Ways. And so we're all getting together to share best practices on the best way to use these resources, the best way to partner. So that gives me tremendous hope.

There was a question from one of our guests about corporate relationships and partnerships. Yes, we need to continue to work together with public-private partnerships, community and corporate collective impact strategies. It is going to take everyone to make a difference and see the type of change that we want to see.

So there's 1,000 partnerships I could rattle off. I just try to give you the highlight and the ones that are most pertinent to what we're discussing today. But that's what gives me hope. That's what gets me out of bed every day. And I know that's what is truly going to be needed to make sure that we aren't having the same conversation next year.

AMY BICKERS: Well, thank you so much to all three of you and also for the really important work that you and your organizations are doing in the community in Detroit and beyond. So we're pretty much at time. So we'll wrap up the discussion.

So Kim Trent of the Michigan Department of Labor and Economic Opportunity, Kristen Holt of Green Path, and Dr. Darienne Hudson of United Way of Southeast Michigan, thank you. Thank you for being part of this conversation on household financial stability in Detroit. At the Chicago Fed, we certainly intend to stay close to these issues, not only in Detroit but across all of the five Midwestern states that we serve. And thank you also to our attendees for joining us today for this conversation. I'd like to invite you to please visit ChicagoFed.org/hometown to see some of the other compelling sessions that we have done and also to offer your opinion on what conversations we might have going forward so that we can all work together to promote a more equitable and inclusive economic recovery.

With that, thank you very much on behalf of the Chicago Fed and on behalf of me, Amy Bickers. I'm so grateful that you joined us. So thank you to everybody. Bye bye.

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