The Persisting Tax and Housing Challenges in Michigan’s Communities
A recent convening hosted by The Kresge Foundation included a report by Bernadette Atuahene, a University of Illinois Chicago-Kent law professor, sharing her findings after studying the property tax foreclosure crisis in Detroit.
Two years ago the Detroit Free Press published an op-ed by Atuahene in which she said Detroit was experiencing a Hurricane Katrina without water by way of a property tax foreclosure crisis.
According to her research with Christopher Berry at the University of Chicago, 10 percent of all tax foreclosed homes in the area were caused by unconstitutionally inflated property assessments.
The Michigan Constitution states that property assessment ratios should not exceed 50 percent of the true cash value. However, Atuahene said they found a “gross illegality” of homes assessed at 60 percent and above.
Her presentation was given at a Detroit Neighborhood Forum hosted by The Kresge Foundation at the Detroit Athletic Club in early July. The Forum includes meetings of leaders from the philanthropic, banking, nonprofit and public sectors focused on discussing community priorities and collaborating together.
Why should grantmakers be concerned about housing and tax policies?
Atuahene says the issue will persist with the current policies in place and spark other socio-economic ills.
The rate of property tax foreclosures is expected to continue rising over the next three years, even after the Mayor’s Office did a parcel-by-parcel reappraisal of the city’s 255,000 residential properties in 2017.
According to the law professor’s report, 25 percent of the tax foreclosed homes in Detroit within the lowest sales price were over-assessed at a greater frequency and unjustly displaced thousands of homeowners.
That’s an increase to homelessness and blight, an increase to social services needed and a trail of aging families with distressed or defunct credit and zero cash flow.
Laura Grannemann, vice president of strategic investments, Quicken Loans, knows the issue is growing. Grannemann knocked on doors across the city to address blight. She met, and eventually hired, a woman whose home had been foreclosed due to exaggerated property taxes. At the time, the woman’s only other option was to sleep in her van, which she parked across the street from her once home while someone else took over the property.
Homeowners who can’t afford the inflated prices pay a late property tax payment with an interest rate of 18 percent. Homeowners with a good track record may receive a six percent reduction to 12 percent after one year. Even more, since 2006, unpaid water bills have been rolled into tax foreclosure bills, unbeknownst to many homeowners.
Grannemann said property tax foreclosure has become the “blight removal pipeline” citing that 50,000 of the 58,000 homes within Quicken’s blight project had been touched by foreclosure.
To confront this problem, grantmakers are encouraged to stay up to date on millage rate reform, the Property Tax Exemption program and the Right of First Refusal program. Detroit has also started a paralegal program to help homeowners protest their assessments and several funders have agreed to a loan fund for delinquent taxpayers.
Read a July 2018 article on the Right of First Refusal housing program.
What the Net Neutrality Ruling Reversal Means for You
In December 2017, the Federal Communications Commission (F.C.C.) voted to repeal net neutrality rules adopted in 2015; the effect of that F.C.C. vote came on June 11. The net neutrality regulations had essentially classified the internet as a public utility and had three core components:
Blocking: Internet service providers could not discriminate against any lawful content by blocking websites or apps.
Throttling: Service providers could not slow the transmission of data because of the nature of the content, as long as it was legal.
Paid Prioritization: Service providers could not create an internet fast lane for companies and consumers who paid premiums, and a slow lane for those who didn’t.
Ajit Pai, chairman, FCC, opposed the regulations, in part because they “impeded innovation.”
“In 2015, the FCC stripped the FTC [Federal Trade Commission] - the nation’s premier consumer protection agency - of its authority over internet service providers. This was a loss for consumers and a mistake we have reversed,” Paj has said.
FCC Commissioner Michael O’Rielly visited Michigan in June. In an interview with local radio about the issue, he said the impact has been “zero.”
“The same exact experience consumers had before the rules were in place, they are having today,” O’Reilly shared. “It should have no impact on consumers.” O’Reilly said the situation would continue to be monitored.
The impact of the reversal remains a concern for many consumer advocates who argue that broadband providers may begin selling the internet in bundles, such as a “social media package” to access sites like Facebook and Twitter. Perhaps the most widely shared concern is pay-to-play deals, with fast internet available only to large internet and media companies and affluent households, creating an unfair playing field.
Michigan Senators Debbie Stabenow and Gary Peters have both expressed concerns about net neutrality reversal.
Senator Stabenow has described reversal as an “unfortunate turn of events in our economy.”
“Internet access isn’t a luxury for people in Michigan; it’s a necessity,” Senator Stabenow shared in February.
Senator Peters has also expressed his disappointment in the reversal ruling and is concerned about divisions in access to information based on a consumer’s socio-economic status.
“We live in an increasingly interconnected world, and access to an open internet is more vital than ever for Michigan small businesses, startups, students and job-seekers,” he said. “Part of the beauty of the internet was its equalizing factor, is that when you got on the highway of the internet, you all had the same speed."
In May, both Senators voted for a resolution to reinstate net neutrality rules. The resolution passed the Senate by a margin of 52-47.
The issue of net neutrality is one that a number of CMF members have weighed in over the years. In 2015, Alberto Ibargüen, president, John S. and James L. Knight Foundation and Darren Walker, president, Ford Foundation were two of three authors of an opinion piece specifically on net neutrality.
“Philanthropy cannot sit on the sidelines in the battle over net neutrality,” they wrote. “Key public-policy decisions being made in the coming years will determine whether our digital public square is accessible for decades to come.”
GEO Resource Helps Grantmakers Improve Organizational Culture to Grow Impact
Foundation leaders who think of their organization’s culture as an aside, something unconnected to the team’s daily work and unworthy of attention when schedules are jam packed, may be surprised to learn that culture has been shown to have a direct impact on success.
"Culture is almost like air – it’s everywhere yet invisible. When harnessed correctly, corporate culture can turn into a tailwind of progress instead of a headwind of obstruction,” said Shivaram Rajgopal, professor, Columbia Business School, following the 2015 release of a study on company culture conducted by Columbia Business School and Duke University’s Fuqua School of Business. Interviews with nearly 2,000 CEOs and CFOs revealed that corporate culture can drive profitability, acquisition decisions and even affect whether employees behave ethically.
78 percent said culture is among the top five things that make their company valuable.
More than 50 percent of executives said corporate culture influences productivity, creativity, profitability, firm value and growth rates.
92 percent said they believed improving their firm’s corporate culture would improve the value of the company.
What about company culture in the nonprofit world? Grantmakers for Effective Organizations’ (GEO) work around culture over the last 15 years shows that “grantmakers who cultivate cultures based on collaboration and partnership; diversity, equity and inclusion; respect and humility; responsiveness; transparency and trust; and curiosity and learning are better able to adopt the smarter grantmaking practices that matter most to nonprofits.”
Their research has shown that a productive internal culture aligned with a foundation’s mission and goals is essential to support nonprofit resilience and success. GEO recently released a new resource guide to assist grantmakers in identifying, discussing and improving organizational culture. The guide outlines how the work of shaping culture can be broken into four primary phases:
Understand: Consider the ingrained behaviors, assumptions and values that drive our daily work and our interactions with nonprofits and other partners.
Assess: Explore how our current culture affects our ability to accelerate impact and support nonprofits to be successful
Shift: Engage board and staff to take action to create a culture that will make our organization and nonprofits more successful.
Tend: Keep a sustained focus on strengthening culture so we can achieve our mission and goals, continually aligning strategy, operations, talent and culture in that direction.
GEO provides a set of questions that foundation staff can ask themselves, as well as a set of articles and readings on culture work.
At CMF, we have been focused on our organizational culture for several years with tactics in our annual plan of work specifically targeted at our continued growth of the culture we desire. We have used a variety of resources to support this growth. To help employees understand their own workplace priorities and preferences better, as well as the priorities and preferences of their colleagues, all staff complete a DiSC assessment and engage in conversation about the results with Lucille Chrisman, Certified Executive Coach and Intercultural Development Inventory Facilitator, a member of the CMF Consulting Services Network.
All CMF staff are also engaged in deep work individually and together around diversity, equity and inclusion (DEI) principles. We established a norm where all employees individually complete the Intercultural Development Inventory (IDI), a cross-cultural assessment of intercultural competence, then discuss the results individually with our coach and also discuss the organizational IDI score as a team to consider how we can continue to grow our cross-cultural capacity. In addition, as part of this year’s plan of work, staff participated in a Truth, Racial Healing & Transformation healing circle. Seven staff were trained to facilitate healing circles and we participated in an all-staff, multi-part series on understanding oppression. Additional activities are planned for the rest of the year.
Improving the health of organizational culture is a journey. In addition to the GEO resources, CMF staff are happy to share their work and learnings.
Access the GEO Culture Resource Guide.
Learn more about the Columbia University and Duke University culture study with executives.
Explore the GEO articles and readings on culture.
Dive deeper into the DiSC profile tool.
Member Spotlight: The John S. and James L. Knight Foundation, the Ford Foundation and the Community Foundation for Southeast Michigan Partnership for The Detroit Journalism Engagement Fund
A magazine celebrating the history, struggle and impact of the city’s food scene on the culture of the region and using food to break down barriers. (Tostada)
A writing workshop giving grassroots activists the training to write poetry and prose and use photography to chronicle their experiences and shape their own stories. (Riverwise)
A partnership to aggregate information about when public meetings are scheduled and to train citizens in gathering content at those meetings. (WDET & City Bureau)
A text message system to connect residents with timely, personalized information about affordable, dependable housing and their utilities, and high-impact stories uncovering equity issues in the housing market. (Outlier Media)
A “Year in the Life” series of news stories to show what’s possible when journalism is directed by people who live there, created by traditional journalists, activists and citizens. (Arise Detroit & Michigan Chronicle)
A collaboration between a public television station and community leaders to bring residents to the table for discussion about the city’s untold stories and to cultivate more diverse news sources. (DPTV & Community Development Advocates of Detroit)
This is just a glimpse of the incredible work accomplished by grantees of the Detroit Journalism Engagement Fund. Launched in March 2017, the Fund is a partnership between the John S. and James L. Knight Foundation, the Ford Foundation and the Community Foundation for Southeast Michigan (CFSEM).
The purpose of the Fund is to “increase the quality, outcomes and reach of journalism in the region, with an emphasis on engagement, innovation and the equitable recovery of Detroit.” Through its grantmaking program, the Fund “will seek to advance quality journalism while reflecting the perspectives of diverse constituencies including people of color, women and low-income communities.”
The grantmaking program began with an initial scan of the Detroit journalism landscape collected in interviews with more than 60 local and regional stakeholders. A key finding of the scan: “Across platforms, there was reported a sense that Detroit’s most critical news stories are under-covered. There was concern that most Detroit narratives are not being told - that coverage disproportionately skews toward the revitalization of midtown and downtown Detroit at the expense of the rest of the city and of the full diversity of its population, especially the African-American community.”
“The audience most media have been targeting is broader metro, and that leaves people behind,” Katy Locker, director, Community and National Initiatives – Detroit, Knight Foundation, told CMF. “The relevant information in the lives of other Detroit residents has not been a part of the landscape, which contributes to a lack of trust. People who aren’t heard don’t feel valued.”
The scan was followed by a round of six grants completed in December 2017 totaling $322,000. The grants featured collaborations between 13 southeast Michigan organizations.
“We are delighted with all of the innovative projects, and they are all unique,” Katie Brisson, vice president, program, CFSEM, told CMF. “The grantees are doing real problem solving.”
Locker agrees. “These early projects are showing exactly what we hoped, efforts by diverse partners that include longstanding journalistic entities and also new approaches to journalism. It’s really amazing to see the stories coming out and how philanthropy can make investments that elevate community voice.”
The Fund builds on nearly five years of grantmaking by the Knight Foundation and Ford Foundation around journalism in Detroit, which collectively over that over the time has totaled nearly $5 million.
The Knight Foundation is currently supporting the six nonprofit media organizations who make up the Detroit Journalism Cooperative: Detroit Public Television, Detroit Public Radio, Michigan Radio, The Center for Michigan’s Bridge Magazine, New Michigan Media and Chalkbeat Detroit.
The three partner foundations bring the grantees and Cooperative members together every other month for ongoing discussion about their efforts.
“Now they are starting to work together outside of our meetings,” Brisson said. “They are connecting in new and different ways.”
Thanks to the Ford Foundation investment, the Fund is further investing in New Michigan Media and its partner organizations: the Arab American News, the Jewish News, Michigan Chronicle, the Michigan Korean Weekly and the Latino Press.
It is anticipated that the second round of grants will open in late 2018. While the Fund was created as a two-year initiative, expansion or continuation may be on the horizon given its year one success.
“We are having more and more conversation with funders who are realizing that as journalism has lost resources, including journalists themselves, philanthropy can help,” Locker notes. “Quality, reliable information leads to conversation, and that leads to policy change in our communities. When we look back at policy change that has occurred, there was a journalist who did the reporting that pushed the issue to start those conversations.”
Locker says work coming out of the Fund provides an early start at seeing what this kind of involvement looks like for philanthropy. “We are answering the question about the role philanthropy can play while still respecting the practice and independence of journalism.”
CFSEM says they are also planning for more foundation collaboratives around other focus areas. “Each experience leads to the next,” Brisson shares.
When asked what recommendations she has for CMF members considering forming a similar type of collaborative partnership, Brisson has four recommendations:
Be very clear up front about your foundation’s interests and don’t force something that doesn’t make sense. You may come from different angles but there should be a common recognition and agreement that should be as much about building community as relationship building.
Make decisions together. CFSEM is the administrative hub for the Fund and in charge of managing grant process, but representatives from all three foundations are part of the decision making on grants and how convenings are structured.
All the foundations need to be present. Representatives from Knight and Ford attend each of the convenings organized by CFSEM.
Understand that the foundations need to learn from and listen to the grantees. “It’s not a one-way relationship,” Brisson notes. “That’s why I think our work will continue in some form after year two, because we all understand that and have learned so much from everyone involved.”
Read more about the six grantees:
See an overview of the Fund on the CFSEM website.
Read the executive summary of the Detroit media scan.