How to Sustain a Local Economy

When The Chronicle entered the lower level meeting room of the downtown Ann Arbor library, the first things we noticed were three large trays of peanut butter and jelly sandwiches, cut into bite-sized wedges. As public forums go, this was an offbeat gnoshing choice.

It turned out that the sandwiches – and apples, soft drinks, potato chips and other food – were all sourced from Michigan, in keeping with the theme of Wednesday night’s event. The panel discussion focused on the state’s economic crisis, and how the community can respond to it.  Buying local products is one example.

Starting a local currency is another possibility – the Ann Arbor Downtown Development Authority is funding a study to look into that. Generating  electricity locally is also an opportunity – Mayor John Hieftje told the group that he didn’t think the dam at Argo Pond would be removed, in part because it might be used for hydropower in the future.

The forum – “Michigan’s Economic Situation: Crisis or Opportunity?” – was hosted by Ann Arbor-based Michigan Peaceworks and Washtenaw Voice, a coalition of local nonprofits that are working together to increase voter turnout and bolster the community in other ways. Michigan Peaceworks is the lead agency in this effort, part of the broader Michigan Voice initiative.

State and national issues were part of the discussion, but most of the six panelists focused on how the local community can take action in specific areas, including food, health care, housing and the environment.

The Panelists’ Perspectives

Laura Russello, executive director of Michigan Peaceworks, moderated the panel. She began by announcing that state Rep. Rebekah Warren, a Democrat whose district includes Ann Arbor and who was originally scheduled as a panelist, got stuck in Lansing and sent her regrets. (The legislature is trying to resolve a projected $2.7 billion budget deficit by the start of its fiscal year, on Oct. 1.) The others who spoke at Wednesday’s forum represented a cross-section of the community, including academia, nonprofits and the government. Here’s a sampling of their comments.

Tom Weisskopf, University of Michigan economics professor

Weisskopf, who served as director of UM’s Residential College from 1996 to 2005, compared the current economic crisis to the Great Depression of the 1930s. Though not as deep as that decline, today’s economy faces unprecedented challenges, he said.

“We really need a transformation, not just a recovery,” Weisskopf said.

He described the Solidarity Economy, an international movement that rejects profit-centered values and embraces cooperation, equality and local control. He listed several examples of ways that this movement is taking shape. Community land trusts – nonprofits that provide “truly affordable housing,” he said – are cropping up across the country, and have lower foreclosure rates than the general housing market. One successful example is the Champlain Housing Trust in Burlington, Vermont.

Community-owned corporations, with locally elected boards and shares sold to local investors, are another example of the solidarity economy.  In Ann Arbor, People’s Food Co-op fits this model, Weisskopf said. Other “solidaristic” examples include worker-owned cooperatives like Cleveland’s Evergreen Cooperative Laundry, community development financial institutions, and the green jobs movement, with efforts like the Green Collar Jobs Corps in Oakland, Calif.

Ellen Clement, Corner Health Center

Clement began by noting that she’d worked for over 20 years in public health – earlier this year, she resigned as health officer for the Washtenaw County Public Health Department to take the job as executive director at the Corner Health Center, a Ypsilanti clinic for teens. “Believe me, it’s an eye-opening change,” she said.

Responding to the question of whether the economic crisis can be turned into an opportunity, Clement said that for health care, dramatic change won’t happen without a crisis. That crisis has arrived, and it’s time to make sure that health care is seen as a right, not a privilege, she said. “There’s just, to me, no excuse for not having health care for all.”

But providing health care alone won’t be enough, she said – it’s also about keeping Americans healthier, with policies and incentives that focus on preventive care and promote healthier lifestyles. Clement cited efforts like the Ann Arbor Non-Motorized Transportation Plan and the Ann Arbor YMCA’s Pioneering Healthier Communities, which focuses on providing recreational programs to youth in Ypsilanti.

She noted that as they listen to the panelists, the audience would see that all of the topics are interconnected – that’s what sustainability is all about, she said.

Jeff McCabe, People’s Food Co-op and Friday Mornings @ Selma

McCabe contends that food is taken for granted, more so than even air or water. There were moments of crisis regarding the quality of our air and water that prompted policy reforms, he said. “In food, we haven’t seen that change yet.”

Americans still want their food fast and cheap, McCabe said, and the locavore movement – with its focus on eating locally grown and produced food – hasn’t even taken one mile out of the 1,500 miles that food travels, on average, to get to our table.

About 1% of food consumed by residents of Washtenaw County is actually produced in the county, McCabe said. What if that were increased to 10%? Assuming that local residents spend over $1 billion annually on food, increasing consumption of locally grown food could put $100 million into the local economy, he said. Demand would drive an increase in local farming, potentially generating thousands of jobs.

McCabe cited Eliot Coleman of the Four Season Farm in Harborside, Maine, as a model of a small-scale, year-round venture that could work equally well in Washtenaw County. McCabe supports local efforts toward that goal – proceeds from Friday Mornings @ Selma, a weekly breakfast salon run by McCabe and his wife Lisa Gottlieb, help fund hoop house projects in this region.

“We vote with our wallets every day,” McCabe said. “Think about that when you buy your food.”

Lisa Dugdale, Transition Ann Arbor

Dugdale, a founder of Think Local First of Washtenaw County and now a project manager for the Clean Energy Coalition, said the current economic crisis was really an inevitability. She described the Transition Town movement as a response to the challenges of global warming, peak oil and economic instability. [See previous Chronicle coverage of Transition Ann Arbor. Dugdale is one of the group's organizers.]

There are concrete actions that individuals can take, Dugdale said: Buying less, repairing or repurposing items you already own, buying from locally owned businesses that will keep money circulating in this community.

More broadly, the community could do an “economic leakage” study, Dugdale said, looking at sectors that drain the most money out of the community, then focusing economic development efforts in those areas. Food production might be a sector that fits this category, she said.

Creating a local currency is another way to keep money in the community, Dugdale said. Think Local First was recently awarded a grant from the Downtown Development Authority to analyze the feasibility of starting a local currency, she said.

The Chronicle made a follow-up query to Susan Pollay, the DDA’s executive director, who said that the $6,000 grant was authorized earlier this month. Some of the questions that the study will address include:

1. How strong is the demand for a local currency program?
2. How would a local currency program be different than gift certificate programs to local businesses (such as the former Ann Arbor Gold program run by the Ann Arbor Area Chamber of Commerce) and how are those differences articulated?
3. If a local currency program were created in Ann Arbor, would it involve coordination with a local bank? If so, how would that bank be selected?
4. Can a local currency program be managed by an existing organization (e.g. Think Local First) or is a separate agency needed?
5. What kind of longevity are other local currency programs experiencing?
6. Is it anticipated that local businesses would see revenue increases as a result of a local currency program? Are there other benefits one might see from such a program?

The study will likely take three to four months to complete, according to Pollay.

Michael Appel, Avalon Housing

Appel explained how housing has become more than just shelter. For many, it’s an asset that creates inter-generational financial stability, even more so than income. People were frightened by the recent housing crash because the dramatic drop in their home’s value meant they were losing the value of a long-term asset, he said.

These personal financial difficulties turn into community crises, as entire neighborhoods are hit by foreclosures. Ann Arbor is less affected than some communities, Appel said, but some areas of Washtenaw County are suffering dramatic foreclosure rates. Foreclosures also displace renters – when their landlord loses the house through foreclosure, the renters are forced to move, even if they’ve been paying rent. This affects some of the poorest in the community, he said.

The housing crash also affects the nonprofit that Appel runs. Their model relies on private investors, who in turn receive tax incentives for investing in Avalon projects. [The group's most recent project, Near North, received approval from the Ann Arbor city council on Monday.] But real estate is no longer seen as a secure investment, he said. Further, if a corporation – and potential investor – isn’t profitable, tax credits would be of little value to such an entity. These factors have curbed the amount of equity available for low-income housing projects.

There are still some opportunities, Appel said. Much of the federal stimulus money is going into the housing sector. The irony, he said, is that the government’s “cure” isn’t focused on helping people find a place to live – it’s focused on fixing housing as an investment. In general, he said, it’s worth considering whether housing should be viewed as a way to build financial security.

Any investment in housing should stress energy efficiency, Appel said, as well as coordination with transportation and jobs. We’ve seen how the suburbs can leave the local economy vulnerable, he said.

John Hieftje, mayor of Ann Arbor

Hieftje said he was a member of the Michigan Climate Action Council, which released a report in March of 2009 that included several policy recommendations related to reducing greenhouse gas emissions and other environmental issues. However, the state has been slow to act on those recommendations, he said.

Hieftje spoke about various environmental initiatives undertaken by the city of Ann Arbor, including the installation of LED street lights, the addition of bicycle lanes and the goal of using 30% renewable energy for municipal operations by 2010. As an example of areas that are doing even more, he pointed to Ontario, Canada, which has large-scale wind farms and two major solar plants. Public policy in Canada and Europe – including the use of feed-in tariffs – makes it easier to promote renewable energy in those countries, he said.

One of the things that Michigan can do to promote economic recovery is to refocus on making cities the kind of places where people want to be, Hieftje said – the business will follow.

Audience Q&A

The audience asked a range of questions. Here’s a sampling.

Q: How does the city reconcile the seemingly contradictory goals of encouraging alternative transportation while building a new parking structure? Hieftje said that although the city supported alternative transportation, they weren’t trying to create a non-motorized downtown. They’ll be losing at least 700 parking spaces in the coming years, he said, and the new underground parking structure on Fifth Avenue – a project which will be breaking ground next week – is only replacing the parking they’re losing. He added that Google wouldn’t have located in downtown Ann Arbor if there hadn’t been parking available. Insufficient parking simply drives business to the suburbs, he said.

Q: Can Ann Arbor’s dams be used to generate local electrical power? Can Ann Arbor establish a city utility? The city already produces electricity at Barton and Superior dams, Hieftje said. The dam at Gallup has a 50% greater capacity for generating electricity than Argo dam, he said, with about a 35-year payback on investment. But new technologies might make it possible to tap the water flow in ways that aren’t yet possible, Hieftje added. That’s why it might be smart to keep the dam at Argo, he said: “I don’t really see Argo Dam going away.” [See previous Chronicle coverage of an Ann Arbor Energy Commission meeting that discussed the issue of hydropower at the city's dams.]

Because of changes at the state level, it’s harder to establish a municipal utility now than in the past, Hieftje said. The city hasn’t given up on that possibility, but it isn’t easy.

Q: It seems that the organic and local food movement is elitist. How can these movements affect food availability for people with less money? Jeff McCabe said it’s a matter of prioritizing. Do you spend money on a box of cereal or spend time cooking a healthy grain? Those are choices that people make. He noted that commercial food is subsidized, making it more difficult for smaller, organic producers to compete on price. Ellen Clement said that there’s some relationship between the price that people charge and their customer base, citing the example of dramatically lower prices at the Ypsilanti Farmers Market, compared to the market in Ann Arbor.

Q: What are the political roadblocks to building green communities? Hieftje blamed the Republican-controlled state Senate for a reluctance to give up old ways. Policies need to change in Lansing that affect what local municipalities can do. He added that he thought the locally elected legislators did a good job.

The Q&A was followed by breakout sessions, focused on food, health care, housing and the environment. Later, in wrapping up the evening, Russello said they’ll be taking the information and feedback from the forum and using that to identify projects for the Washtenaw Voice coalition. They’ll be launching a website with a calendar and blog.  It will be progressive, she said, adding that organizers are still trying to define exactly what “progressive” means in this context.

Groups Involved in Washtenaw Voice

The following local groups, or the local chapters of these state and national organizations, are part of the Washtenaw Voice initiative. The coalition is not affiliated with the Washtenaw Community College student newspaper, which is also called the Washtenaw Voice.

The Ecology Center

Michigan League of Conservation Voters

Working America

The Women’s Center of Southeast Michigan

Interfaith Council for Peace and Justice

University of Michigan Labor Studies Center

Michigan Peaceworks

Learning Disabilities Association of Michigan

Clean Water Fund

Chelsea Community Hospital

March on the Vote (no website available)

Health Care for Michigan

Center for Michigan

Transportation Riders United

Metropolitan Organizing Strategy Enabling Strength

Partners in Personal Assistance