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Grand Rapids wants 8,888 new homes by 2025. How far are we?

GRAND RAPIDS, MI – In July 2020, a study commissioned by the City of Grand Rapids showed that nearly 8,888 housing units – apartments, condos, single-family homes – were needed by 2025 to meet demand and avoid move residents.

Two years later, is the city on track to achieve this goal?

In short, no.

Data provided by the city shows that 1,045 new housing units have been added to Grand Rapids since 2020, with at least 1,000 more housing units reserved for low-to-moderate income residents in the pipeline.

“Based on our current construction numbers, we are not on track to meet these goals,” said Ryan Kilpatrick, executive director of Housing Next, an organization that works with the City of Grand Rapids on housing issues. lodging. “More production is needed not only in the city of Grand Rapids, but also throughout Kent County and throughout western Michigan. The whole region is understaffed.

More than half of the 1,045 housing units created since 2020 are “affordable”, meaning they have been subsidized with public funds and are reserved for residents with low to middle incomes, according to the city.

One factor that puts the city off track to meet the goal of 8,888 new units by 2025 is rising construction costs.

Kilpatrick said construction costs have jumped 30% to 40% over the past two years, and wage growth has remained well below that level. This has left developers worried that the cost of new flats at market prices will far exceed what could be charged for rent.

“If we could still build housing at the cost of building in 2019, I think you would see a lot more cranes in the sky right now,” he said. “When we look at the mismatch between construction price growth and wage growth, that’s really the biggest hurdle.”

The July 2020 study that determined there is demand for 8,888 homes by 2025 was conducted by Bowen National Research, an Ohio-based real estate market analysis firm. The study was primarily funded by the City of Grand Rapids and the Frey Foundation.

In Grand Rapids, the target of 8,888 units has been split into two parts: 5,340 apartments and 3,548 condominiums, townhouses or single-family owner-occupied homes.

The study also estimated that Kent County, excluding the city of Grand Rapids, would need 3,581 rental units and 9,760 owner-occupied units.

Officials say it is important to achieve this goal as Kent County and the City of Grand Rapids continue to grow, attracting new residents and employers to the area.

Population growth has put pressure on housing prices, and community leaders say they want to ensure there is quality housing available for residents of all income levels.

“Things move fast and things are expensive,” Elianna Bootzin, executive director of Neighbors of Belknap Lookout, said on a recent afternoon as she described housing demand in her neighborhood on the northeast side of the town.

She was among several community leaders who attended a grand opening hosted by Orion Construction for a $12.2 million, 52-unit low-income apartment development, known as Union Suites, currently under construction. on the 600 block of Coit Avenue NE.

Related: 52-unit low-income apartment building planned for Grand Rapids neighborhood

Bootzin said the development will help meet a strong demand for affordable housing in his neighborhood, located just north of I-196 from the city’s booming Medical Mile. She said the neighborhood had seen a slew of upscale market rate moves, but few new homes were earmarked for low-to-moderate income residents.

“It’s going to bring more affordable housing and we know we desperately need it,” she said. “We’ve seen a lot of big projects happen; a lot of great projects are coming. But so far they’ve been at market price, and we know people need something below that to be able to stay here, to be able to move here.

Union Suites apartments will be reserved for residents whose annual income is up to 80% of the Kent County area median income. For example, this translates, for a one-person household, to $50,160 and $64,480 for a three-person household.

Of the 1,045 new homes added to Grand Rapids since 2020, 690 of them are apartments.

The remaining 355 are townhouses, condominiums, duplexes or single-family homes, depending on the city. Fifty-seven percent of them are likely owner-occupied while the rest are rentals.

Looking ahead, one challenge Kilpatrick sees is the availability of more market-priced apartments, rather than limited-income units, in Grand Rapids. According to the city, there are 1,000 units of restricted income units at various stages of the development process.

“The value of housing at market rates is really to support households at all incomes,” he said. “We need to recognize that we have higher income households who want to live in the city of Grand Rapids, and when we don’t provide new housing for those households, they compete for our older and generally more affordable housing stock. . ”

Challenges to bringing more market-priced housing to the city include rising construction costs and the availability of construction workers, Kilpatrick said.

“We have some really exceptional construction companies in the West Michigan community, and many of them have commitments to major healthcare facilities or educational institutions,” he said. “And so, we’re not just competing for labor among property developers. We also compete for labor with our job creators. So we also need to think about how we develop our skilled trades.

There is no centralized data source on the number of homes added in Kent County since 2020, so it’s hard to say how close the county is to reaching the estimated 13,341 units needed by 2025.

But officials from two municipalities, the Township of Grand Rapids and the Township of Caledonia, say there is significant demand for new housing in their communities.

Grand Rapids Township Supervisor Michael DeVries said about 800 new homes have been added to his community since 2020.

A significant portion of those were in multi-family rental units along East Beltline Avenue, he said, including the 320-unit The Grove by Watermark across from Robinette’s Apple Haus & Winery. .

Looking ahead, however, he doesn’t see room in his community for many more multi-family housing developments.

“There aren’t many properties left in Grand Rapids Township that don’t already have homes,” said DeVries, who estimates that 90% of homes in his community are owner-occupied.

In Caledonia Township, 273 building permits have been issued since 2020, and “there continues to be roofs added where there used to be cornfields,” Township Supervisor Bryan Harrison said.

Of the 273 building permits, 194 were for single-family homes and the rest for multi-family residential developments. The largest of the multi-family developments has nine residential units, he said.

As the township has grown rapidly over the past 30 years, community leaders want to strike a balance between welcoming new residents and businesses while maintaining the area’s rural character, Harrison said.

“Everyone is moving to Caledonia and wants to slam the door behind them to maintain that quiet, rural feel,” he said, adding that the township is more about being “responsive to demand rather than being responsive.” definition of demand”.

Back in Grand Rapids, Mayor Rosalynn Bliss said she hopes the city will get closer to the goal of 8,888 homes by 2025.

“I want it to move faster, knowing the need is so great,” she said, noting that she would like to see 5,000 to 6,000 units completed or in the works by 2025.

“But I also want it to be high quality housing…we need to have high standards across the board, whether it’s low-income, affordable or market-priced housing.”

Looking ahead, Bliss said there is potential to add thousands of rental units in areas targeted for development in downtown Grand Rapids. This includes surface parking lots in the west side of town and a 31-acre stretch of property along the Grand River between Fulton and Wealthy streets which is being considered for a 12,000 seat amphitheater and other developments.

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