Detroit's Wealth Generation Task Force submits reports with six recommendations

Detroit ― After a year of research, Detroit's Wealth Generation Task Force on Tuesday submitted its report with six policy recommendations to the mayor and the City Council on how the city can reduce poverty, grow its middle class, help combat the income gap and improve economic mobility.

District 3 Councilman Scott Benson outlined recommendations that he said will increase access to opportunities for residents and potentially entice more families to call Detroit home.

Benson said for years, the city's elected government has relied on job creation as the primary corrective action to address the generational wealth gap; however, the task force's research shows more focus should be on creating safe neighborhoods, helping families save money for emergencies and buy homes and ensuring children are prepared to enter college and the workforce.

"We have identified a multi-prong approach that goes beyond what government has done in the past by simply relying on job creation," Benson said during a press conference at the Detroit Historical Museum. "To lift people out of poverty, they need to be job-ready and have assistance and the knowledge to protect their family’s wealth and assets.”

The six "pillars" identified by the task force to address the generational wealth gap include education, employment, banking, property ownership and healthy neighborhoods. Benson said they will focus on these policy areas to help "grow the middle-class family population and encourage middle-class families to move back to Detroit."

During the budget for fiscal year 2023-24, Benson allocated $1 million for a program to efficiently transfer wealth. He did not have an estimate of the cost to implement their findings but said he hopes pandemic relief funds would supplement along with philanthropic partner investments.

Among their findings, the task force highlighted that educational attainment is suffering. They support funding a tutoring program for Detroit residents that would supplement traditional schooling. The tutoring program would employ certified tutors and be housed in Detroit public libraries and recreation centers. The task force pegs the cost at $750 annually per student for 25 hours of tutoring, totaling $3.75 million for a program serving 5,000students annually.

On the issue of property ownership, the task force pointed out many Detroiters do not adequately prepare for estate planning, which is essential for generating wealth. The task force recommends the city prioritize policies and low-cost or free services to support the efficient transfer of wealth via estate planning and estate education programs to prevent properties from being lost to the probate process. The report points to two programs — Tangled Title in Philadelphia and Home for Generations in Washtenaw County — as programs the city should establish to support the efficient transfer of wealth.

The task force estimates 23% percent of Detroiters are unbanked or underbanked. Being unbanked, which means not having checking or savings accounts with an insured (FDIC) institution, can cost $40,000 over a lifetime due to use of costly alternative financial services for routine financial transactions, the report said.

The task force recommends that the city continue to advocate for residents to get certified bank accounts. Additionally, the task force recommends that all future requests for proposals for city banking services require banks to include a plan to increase the number of Detroiters who become clients of a bank.

"The man who was attacked and robbed in broad daylight at the party store ... he walked across the street from his tire shop to cash his check because he is unbanked and was attacked," Benson said. "He had four ribs broken and a lung puncture as a result so it's critical that it would have been stopped if he just had his check automatically deposited."

The task force also recommended new initiatives by the city to prioritize resource support for small businesses and entrepreneurs and is calling for the city to support the Small Business Support Network bill in Lansing and to invest in a central hub for coordinating small business support through an organization, like Detroit Means Business, TechTown, ProsperUS, Build Institute and the Accounting Aid Society.

To address employment needs, the task force is recommending the city work more closely with Detroit Public Schools Community District to advertise and market career technical education programs to eligible Detroit youth.

Lastly, the task force is calling for an open-space master plan to direct municipal investment and encourage strategic civic, private and commercial investment in land use models to strengthen the city's neighborhoods and industrial districts.

Specifically, they are recommending an ordinance to allow the Detroit Land Bank Authority to develop a mandatory financial and development process workshop for all buyers of its properties. The Land Bank also should require buyers provide a realistic timeline for purchasing and making a property “habitable” or the property will be remanded to the Land Bank Authority, according to the report.

“Many of these recommendations need only a more concentrated effort by city officials to make a difference,” Benson said. “Some of these recommendations require funding, and I know these are excellent investments if it means we move Detroiters out of poverty and get them on the road to creating generational wealth and improving their economic mobility, maintaining our middle-class family population and attracting middle-class families back to Detroit.”

Task force members include Kathleen Colin, president of the National Association of Securities Professionals Detroit; J.R. Clark, partner of Squire Patton Boggs; John Perkins from Michigan Regional Council of Carpenters; Jannina Pena, BankOn coordinator for the City of Detroit; Shirley Kaigler, estate attorney at Taft Law; and Nicole Brown, director of strategic partnerships at Detroit Future City.

"Detroit's dollars are just seeping out, leaving our great city. What we need to do is create opportunities for the efficient transfer of wealth and one of the ways to do that is to preserve the asset that contains the greatest wealth that most of us have, our homes," Kaigler said, speaking of education on the creation of wills, deeds and passing on wealth post-death. "We will develop program that people will learn about estate planning and how to efficiently get those funds to pass on to their next generation of Detroiters."

srahal@detroitnews.com

Twitter: @SarahRahal_