Study: Grand Rapids needs nearly 9,000 more housing units by 2025 PHOTO: EXPERIENCE GRAND RAPIDS

Study: Grand Rapids needs nearly 9,000 more housing units by 2025

BY Thursday, July 23, 2020 10:05am

GRAND RAPIDS — The city of Grand Rapids needs to add nearly 9,000 housing units over the next five years to satisfy high market demand, according to a housing needs assessment prepared for city officials. 

The recently completed housing study was a collaborative effort from the city of Grand Rapids, the Grand Rapids Area Chamber of Commerce, the Frey Foundation, K-Connect and Housing Next. The goal is to use the new data to address the housing stock shortage as well as racial disparities in residents’ ability to access housing and home ownership, said Housing Next Executive Director Ryan Kilpatrick.

“What we want to do is suggest a housing plan be married with the upcoming master plan process,” Kilpatrick said during the July 21 Committee of the Whole meeting. “There are several steps we want to take now, but also set target goals that are embedded in the master plan and revisited every two to five years.”

Kilpatrick was hired by the city in late 2019 and will be working with a team of city staff internally to reframe expectations of the housing commission. 

By 2025, at least 5,340 more rental units and 3,548 owner-occupied units are needed to satisfy housing demand and affordability, according to the assessment. Kilpatrick said there’s a need for additional housing at all price points, but the greatest need is for residents earning up to 30 percent of the area median income as well as those making at least 80 percent of area median income.

“We have had an influx of young people and wealthier people moving into the city, and this has created an inadequate supply of housing for a growing number of people,” Kilpatrick said. “We’ve known that for a number of years.” 

Affordable housing is defined as a household putting no more than 30 percent of its income toward housing costs. In Grand Rapids, renters are far more likely than homeowners to spend more than 30 percent of their income on housing, which classifies them as cost burdened.

More than half of all of the renters in the city are cost burdened. When the data is broken down by race, Black residents are the most cost burdened population. Issues around systemic racism need to be addressed as well to address affordable housing, Kilpatrick said.

“Housing is highly dependent on other elements within the system, wages being critical to that,” Kilpatrick said. “As long as we have folks earning wages that do not provide for a budget that they can survive on, we’re going to have housing issues.”

Low availability

The vacancy rate of rental units across the city is currently around 2-3 percent, and should be slightly higher at 5-6 percent, Kilpatrick said. 

“What we’re seeing in the market today is even wealthier households do not want to spend what it actually costs to build a new apartment building,” Kilpatrick said. “With limited supply, competition creates more dramatic increases in price.”

The low availability of housing on the market also poses a problem, Kilpatrick added. As of March 17 in Grand Rapids, 359 houses were on the market — less than one-third of what is needed, Kilpatrick said. 

“We’ve got to start thinking about additional types of ownership products, whether it’s townhouses, condos, splitting lots into smaller parcels, more households want to live and own in the city,” he said.

Part of the solution needs to include dedicating $20 million to a local housing fund, Kilpatrick said, as well as ensuring the city is getting the most out of economic development incentives for new developments and finding ways to increase density by rehabbing existing structures.

Adding a secondary dwelling unit to existing single-family homes is also an opportunity to increase housing density, Kilpatrick said. An additional 3,400 rental units would hit the market if 5 percent of all single-family homes in the city did so.

“This is just the start of more work to come,” said Grand Rapids Mayor Rosalynn Bliss. “We knew we needed this for work to continue in a thoughtful and strategic way.”

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