As Ann Arbor preps guaranteed income pilot, some see broader potential to tackle high cost of living

As Ann Arbor's already above-average cost of living continues to rise, the city is following a handful of other American communities by experimenting with offering a guaranteed basic income to some residents.

$1.6 million in federal American Rescue Plan Act (ARPA) funds have been allocated to "provide payments of approximately $530 per month for 24 months to 100 low- and moderate-income entrepreneurs who live in Ann Arbor," according to a press release from the city. The proposal was brought to city council by University of Michigan’s Poverty Solutions initiative, which will partner with the city throughout the program to study its impact.

The 100 participants will be selected from a pool of applicants, with priority being given to residents who receive any form of public assistance as well as those who do not receive assistance but can demonstrate economic need.

Currently, at least nine states are undertaking guaranteed basic income pilots. The largest of these is California’s Basic Income Guaranteed: Los Angeles Economic Assistance Program (BIG:LEAP) pilot, which provided $1,000 a month to 3,200 participants throughout 2022. After seeing the successes of programs like BIG:LEAP and others, Ann Arbor leaders decided to launch the first guaranteed basic income pilot program in Michigan.
Ann Arbor City Council member Linh Song.
Ann Arbor City Council member Linh Song, who strongly advocated for the initiative, says she has "been dreaming of a program like this for the city for a long time." She recalls that her immigrant parents' main opportunities for employment were minimum-wage jobs that didn’t always pay the bills.

"This is personal for me," Song says. "I know low-income folks work so hard for very, very little. Income mobility is so difficult here."

Ann Arbor has been ranked the eighth most economically segregated metropolitan area in the U.S., and Washtenaw County ranked in the nation's bottom 8% for upward income mobility according to a study by Harvard researchers in 2015. 

"We talk about being progressive and equitable, but do we really invest in that way?" Song says.

She notes that funding for the guaranteed basic income pilot is half of what is being spent on another city initiative to update and repair the Gallup Park bridge. She hopes that this pilot and other initiatives like it will be seen as "just as important as updating infrastructure."

Poverty Solutions Associate Director Kristin Seefeldt.Working alongside Song on the pilot is Poverty Solutions Associate Director Kristin Seefeldt. She examined similar programs throughout the country and felt that implementing one in Ann Arbor "fit squarely within Poverty Solutions’ mission."

"Being able to do this work that’s really beneficial to the community is very important," says Seefeldt. "We’re actively looking to reach all corners, and we’re trying to think creatively of where else we can be and who we can be talking to."

Although the pilot focuses on Ann Arbor’s low-income entrepreneurs, Seefeldt says she and other organizers want to work with a broader definition of entrepreneurship.

"Some folks have a micro-business with only an online presence. Some people are doing work on the side or developing an artistic profession or are freelancers," she explains. "Casting a really wide net is important to me."

Seefeldt says organizers' goal is to have program applications open this fall, with the first checks going out in early January. However, she says there are hurdles such as determining how pre-existing benefits such as SNAP and Social Security will be impacted as a result of an individual participating in the pilot, as well as the ethics of determining how to connect with communities of greatest need. 

"As soon as we get approval, we’re ready to go," Seefeldt says. "We’ll be able to make an announcement about when the applications are open fairly quickly."

Some Ann Arbor activists are hoping the pilot is just the beginning of much bigger things. Petals Sandcastle, founder and CEO of the Ann Arbor nonprofit Express Your Yes Foundation, says a guaranteed basic income program is "long overdue" for Ann Arbor.

"This program is just one wheel on this bus that can create more dialogue and cohesion outside of the boundaries of economics," Sandcastle says. "There needs to be more unity across the county, and this is a step in the right direction."
Express Your Yes Foundation co-founder Petals Sandcastle at NOW Studios.
Sandcastle was in the room when the city was considering proposals for a guaranteed income program. They proposed a "UBI [universal basic income] to Live Your Why," which was aimed at what they have titled "cultural ambassadors" – artists, musicians, performers, and other creative individuals that help make a city unique and colorful. While the pilot aims to cover individuals who are pursuing entrepreneurial goals through artistic means, Sandcastle also hopes to see a future guaranteed basic income program that is fully dedicated to artists.

"So many people give up on their dreams because they can’t pay their bills," Sandcastle says. "Guaranteed income provides that ground floor so you can really think about the art you want to create and what you want to change about your community."

That concept of surviving versus thriving has come up continuously throughout conversations about the pilot. A set monthly amount of money to cover basic needs can allow individuals tiptoeing along the poverty line to more safely seek different or better work opportunities, or put more focus into making their craft their main source of income.

Another partner in the pilot is the Ann Arbor nonprofit Avalon Housing, whose mission is to develop inclusive, supportive housing as a long-term solution to homelessness. Bri Carpenter, Avalon’s director of employee experience and culture, says Avalon sees guaranteed income as a means to help individuals and families find stability in housing through "a steady means of survival, which can lead to thriving."

"We want to bring folks out of need-based-only thinking, and be able to dream and set goals," Carpenter says. "Once we understand the need more with this pilot, we can go farther in addressing it in creative ways and from different angles."
Avalon Housing's Bri Carpenter.
Carpenter says a guaranteed income program could theoretically lead to individuals breaking cycles of poverty. She hopes that future programs might prioritize support for individuals returning to society after incarceration. They often lose benefits and support systems upon entering incarceration, yet still accrue debt and bills while incarcerated.

"Rebuilding after incarceration is incredibly difficult," Carpenter says. "... Having something steady and guaranteed to either meet, or go above and beyond, basic needs would give folks more agency and choice in what they engage in, allowing for harm reduction." 

Poverty Solutions' research and analysis throughout the pilot will help determine how these payments can help to stabilize and grow small businesses and ultimately contribute to the overall economic growth of the community.

"I don't think about this being a noble or just a compassionate effort. This is a test for policymakers to see how responsive we are when we talk about inequities," Song says. "This is a worthwhile investment for our city to make."

Those interested in registering when program applications go live, becoming donors to financially support the program, or simply staying informed about the pilot can fill out this form. 

Rylee Barnsdale is a Michigan native and longtime Washtenaw County resident. She wants to use her journalistic experience from her time at Eastern Michigan University writing for the Eastern Echo to tell the stories of Washtenaw County residents that need to be heard.

All photos by Doug Coombe.