GRDadof3

West Michigan/Grand Rapids Economy

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1 hour ago, x99 said:

There was no state income tax for people who lived there, or businesses who operated there (among other perks).  It wasn't necessarily intentional, but RenZones brought about scads of apartment conversions, with lots of high income single people living in them (see: Union Square).   It was probably singly responsible for Wealthy Street as it is today, obviously Union Square, and arguably the new Meijer could even be an offshoot.  I think that tax break worked shockingly well.  This tax break is not as direct.  This break is designed to tempt rich people to stuff their capital next door to poor people, and grow businesses there, but it isn't nearly as aggressive about it as RenZones were in terms of tempting rich people to actually move into impoverished areas.  

I'd also say that North Monroe saw a boom from the Ren Zone. Jonathan Rooks was a master at Marketing the Ren Zones for residential (he took a couple unsuccessful condo projects and sold them out pretty quickly). He moved on from downtown GR and now has his hands in a lot of Muskegon development.

Joe

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3 hours ago, BLUESCRUBS said:

I am not super educated on this topic. Can anyone share how this is different/similar to the Renaissance zones of the late 90's early 2000's?Am I correct that the Renaissance zones were just tax free for something like 10 years? 

In Ren Zones businesses and individuals were exempt from city of GR income taxes, Michigan Single Business Tax (no longer around), Michigan personal income tax, and local real and personal property tax. It was a HUGE tax savings and actually encouraged a good thing: ownership in the Ren Zones. If you bought a condo in a Ren Zone you had no income taxes and no property taxes. And as Joe mentioned, it encouraged turning vacant or underused industrial buildings into reuse, either as commercial property or residential. John Rooks sold nearly 500 condo units in Ren Zones. I think I remember 10 years into the program which started in 1997 (?) , the city had seen almost $400 Million in investment in Ren Zones. Oak Industrial Park was a Ren Zone and saw a lot of commercial and industrial investment. 

Only Brownfield has been more successful, and that's statewide too. 

Neighborhood Enterprise Zones are a better deal for homeowners to invest in struggling areas.

Giving tax breaks for capital gains taxes? Pretty friggin stupid. 

 

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The Right Place in their yearly economic forecast is saying that 2019 will be a strong year for the local economy. I even read a quote lately that the country will "talk itself into a recession in 2020," which is kind of how I feel lately. There really isn't a warrant for a recession, other than "we're due for one."  The housing market will take a much needed breather in 2019 I think, but there's no "mountain of inventory of homes" for sale like there was before the Great Recession. A return to a normal real estate market shouldn't mean = recession.

The major concern lately is still that employers nationally cannot find the talent they need. How that changes any time soon or leads to a recession is above my pay grade. 

https://www.grbj.com/articles/92225-region-is-right-place-for-growth

My only concern for the local economy is that, while service/professional jobs have skyrocketed in growth in the past 6 or 7 years, so have manufacturing jobs. Mfg jobs are still close to 20% of the local workforce. Perhaps it's a way more diversified manufacturing workforce (food is big, medical, military suppliers have all surged locally). 

 

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A recession could be triggered by the fact that the average worker's pay has not grown as quickly as the economy and with the current occupant of the White House being a "tariff man" but clearly not understanding the mechanics of how tariffs actually work, should a trade war ensue and companies become forced into passing along some of the increased costs of importing both raw materials and finished goods, this will drive up prices on a wide variety of items for consumers, construction companies, manufacturers and others.  The issue then becomes a decline in sales as customers pull back spending or ballooning debt due to a greater reliance on credit - or worse, a combination of the two.   The trick will be managing a potential trade dispute into a modest economic slowdown rather than a full on recession.  So if you are a betting person, it comes down to your confidence that the clown car currently driving around Washington D.C.  has the acumen to pull off such a feat.  Or, things may just work out fine and in the spirit of camaraderie and cooperation, the United States could look to lead with policies that advance the interests of all involved  and economic stability is achieved for the foreseeable future.

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On 12/17/2018 at 9:56 AM, ProtoSapien said:

A recession could be triggered by the fact that the average worker's pay has not grown as quickly as the economy and with the current occupant of the White House being a "tariff man" but clearly not understanding the mechanics of how tariffs actually work, should a trade war ensue and companies become forced into passing along some of the increased costs of importing both raw materials and finished goods, this will drive up prices on a wide variety of items for consumers, construction companies, manufacturers and others.  The issue then becomes a decline in sales as customers pull back spending or ballooning debt due to a greater reliance on credit - or worse, a combination of the two.   The trick will be managing a potential trade dispute into a modest economic slowdown rather than a full on recession.  So if you are a betting person, it comes down to your confidence that the clown car currently driving around Washington D.C.  has the acumen to pull off such a feat.  Or, things may just work out fine and in the spirit of camaraderie and cooperation, the United States could look to lead with policies that advance the interests of all involved  and economic stability is achieved for the foreseeable future.

I think also managing the Fed rate to stave off inflation while not putting the brakes on the economy will be tricky. 

But then again, when the employment/unemployment situation was as good as it is now was back in 1998. We went into a recession that was pretty short lived but then 9/11 hit and a general doldrum hung around after that for almost a decade. 

Then the Great Recession hit to compound matters, which was almost completely driven by the sinking housing market and reckless lending. Homebuilders had almost two years of inventory built up that they couldn't sell, which killed everyone else's home values and down everything fell.

Right now there's about 6 months of new home inventory (nationally) and about 4 months inventory of existing homes (nationally).  It's still a pretty tight (healthy) housing market, although sales slowed the second half of 2018 mostly due to rising construction costs and interest rates. Many people are saying they picked up again in November/early December. 

file:///C:/Users/grjef/Downloads/nationwide-sales-and-inventory-100218.pdf

I was reviewing Kent County's financial data from last year with all of this Land Bank kerfuffle and found this interesting table, particularly about school enrollment. Particularly with the mini baby boom around 2000, those kids have pretty much all moved onto college now. 

689685872_KentCountyschoolenrollment.thumb.jpg.b9ee2808de0df3fe76c93560148aa77b.jpg

 

 

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Grand Rapids MSA registered a 2.5% increase for year-over-year growth in non-farm payroll in November.

Total increase was: +14,100 new jobs from November 2017 - November 2018

Largest sector contributors:

Mining, logging and construction: +2300 (9.3% increase)

Education and Health Services: +2900 (3.1%)

Manufacturing: +2800 (2.4%)

Leisure and Hospitality: +3400 (7.1%)

Government: +2200 (4.5%)

Professional and Business Services, Information, and Financial Activities were all basically flat over last year. 

 

128045491_GRemployment11-2018.thumb.JPG.c719c0d63d2d36543bbbb4a988d7536a.JPG

https://www.bls.gov/regions/midwest/mi_grandrapids_msa.htm#eag

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An article about Salt Lake City's housing crunch had a quote from someone on a city commission saying something like "If every household didn't have 6 kids we may not be having this issue." This statement is probably illegal discrimination on its face from a council member but it got me looking at demographics/pyschographics of births vs deaths in particular MSA's. 

Here goes. First number is births, second number is deaths.

Grand Rapids

2016:  13,511    7,705

2017:  13,548    7,674

Salt Lake City

2016:  18,474    6,794

2017:   18,460   6,827

Then the real fun analysis begins:

Pittsburgh: 

2016:     23,881   27,238

2017:     23,614   27,439

Cleveland:

2016:      22,887   21,269

2017:      22,873   21,068

Chicago:

2016:    117,443    71,672

2017:     115,915    72,491

Milwaukee: 

2016:   19,667   13,309

2017:   19,474     13,399

Toledo:

2016:    7,389   5,913

2017:   7,345   5,968

Tampa:

2016:   32,720     31,728

2017:    33,111     32,696

Rochester NY

2016:   11,398    9,679

2017:    11,310   9,766

 

Like, is anyone in the national media tracking this shit? 

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10 hours ago, GRDadof3 said:

An article about Salt Lake City's housing crunch had a quote from someone on a city commission saying something like "If every household didn't have 6 kids we may not be having this issue." This statement is probably illegal discrimination on its face from a council member but it got me looking at demographics/pyschographics of births vs deaths in particular MSA's. 

Here goes. First number is births, second number is deaths.

Grand Rapids

2016:  13,511    7,705

2017:  13,548    7,674

Salt Lake City

2016:  18,474    6,794

2017:   18,460   6,827

Then the real fun analysis begins:

Pittsburgh: 

2016:     23,881   27,238

2017:     23,614   27,439

Cleveland:

2016:      22,887   21,269

2017:      22,873   21,068

Chicago:

2016:    117,443    71,672

2017:     115,915    72,491

Milwaukee: 

2016:   19,667   13,309

2017:   19,474     13,399

Toledo:

2016:    7,389   5,913

2017:   7,345   5,968

Tampa:

2016:   32,720     31,728

2017:    33,111     32,696

Rochester NY

2016:   11,398    9,679

2017:    11,310   9,766

 

Like, is anyone in the national media tracking this crap? 

I think it is fascinating to look at the breakdown of births and deaths as it relates to population growth. States like California and New York are growing, yet have massive negative net domestic migration. Just the sheer number of people that already live there account for a massive number of births (combined with people living longer and lower death rates).

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Side note - just read where Toronto passed Chicago in population (not metro area).  Imagine migration is a factor.

Edited by arcturus

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Thought it might be helpful to add an additional column that shows the percentage of births to deaths.  Less than 100% means more people died than were born.   Other than the Mormon  tendency to have large families, I don't know what any of this means.  Maybe people in Pittsburgh stay put and don't move to Florida to die. 

204375691_BIRTHSTODEATHSSELECYEDMSA.thumb.png.497c837452a4ff63d17977012ef79918.png   

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8 minutes ago, walker said:

Thought it might be helpful to add an additional column that shows the percentage of births to deaths.  Less than 100% means more people died than were born.   Other than the Mormon  tendency to have large families, I don't know what any of this means.  Maybe people in Pittsburgh stay put and don't move to Florida to die. 

204375691_BIRTHSTODEATHSSELECYEDMSA.thumb.png.497c837452a4ff63d17977012ef79918.png   

Awesome, thanks! If you notice, Tampa and Pittsburgh are very similar. SLC is such a wild anomoly. I'm going to keep adding major metros to it.  Pittsburgh not even replacing its own people basically. 

Here's the source:

http://recenter.tamu.edu

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6 hours ago, walker said:

Thought it might be helpful to add an additional column that shows the percentage of births to deaths.  Less than 100% means more people died than were born.   Other than the Mormon  tendency to have large families, I don't know what any of this means.  Maybe people in Pittsburgh stay put and don't move to Florida to die. 

204375691_BIRTHSTODEATHSSELECYEDMSA.thumb.png.497c837452a4ff63d17977012ef79918.png   

I'm guessing actually that the number of deaths as a percentage of an MSA's population is probably pretty standard across most metros. What probably varies a bunch is the number of births. Areas attracting a lot of young families probably have much higher birth rates compared to their death rates. 

I wish there were an easy way to cull that data. :)

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19 hours ago, GRDadof3 said:

I'm guessing actually that the number of deaths as a percentage of an MSA's population is probably pretty standard across most metros. What probably varies a bunch is the number of births. Areas attracting a lot of young families probably have much higher birth rates compared to their death rates. 

I wish there were an easy way to cull that data. :)

I would imagine if you look at average age by metro it would correlate to birth rate. Off the top of my head I know SLC has one of the lowest.

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4 hours ago, Pattmost20 said:

I would imagine if you look at average age by metro it would correlate to birth rate. Off the top of my head I know SLC has one of the lowest.

I kept digging through the data and most of the Northeastern States are about even births to deaths. Vermont was upside down (more deaths than births). 

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On 12/28/2018 at 10:49 AM, arcturus said:

Side note - just read where Toronto passed Chicago in population (not metro area).  Imagine migration is a factor.

Saw this post earlier and meant to comment. In 2016 - 2017 Toronto MSA grew by about 170,000 people. And about 1/2 of Toronto's population is now foreign-born. 

Only Dallas I believe had a growth spurt nearly that large, at 146,000 in one year (2016 - 2017)

Here are the top 23 in sheer number of people (not percentage). I don't really know how an area can handle a growth of even 50,000 in one year, not less 146,000. This is "growth," not migration, so it would include births.  Comparatively, the GR MSA grew by about 10,000 that year (1% growth)

984375667_MSApopulationgrowth.thumb.JPG.171f3ab4448659d4f409d99d751b3ceb.JPG

 

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2 hours ago, GRDadof3 said:

This certainly isn't going to help the housing situation. :P  Grand Rapids #2:

 

The 10 Surprising Housing Markets Poised to Rule in 2019

By Allison Underhill | Jan 2, 2019

https://www.realtor.com/news/trends/2019-housing-markets-poised-to-take-off/

 

Maybe some of the big builders will see this and add a little stock to the market

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14 hours ago, Floyd_Z said:

Maybe some of the big builders will see this and add a little stock to the market

There's a bunch of spec inventory on the market right now. Just take a look. Not a lot of existing homes though...

I just did a search and there are 272 new homes on the MLS right now in the Grand Rapids area (including lakeshore). That's actually not a lot, considering the size of our market. I know lenders are still a bit conservative about putting out too much money for spec inventory. A good thing in a way. 

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UHaul just came out with its ranking of "growth cities" based on the ratio of incoming and outgoing truck rentals:

U-Haul Growth Cities are calculated by the net gain of one-way U-Haul trucks entering a city versus leaving that city during a calendar year. Migration trends data is compiled from more than 2 million one-way U-Haul truck sharing transactions that occur annually.

Grand Rapids #5:

https://www.prnewswire.com/news-releases/u-haul-announces-top-25-us-growth-cities-for-2018-300772144.html

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16 hours ago, GRDadof3 said:

What is it with all of these articles lately? 

https://www.cnbc.com/2018/12/12/popular-us-cities-where-you-can-buy-a-home-on-a-60000-dollar-salary.html

This article is true if you can FIND a good home at that price. 

Just an aside, I am always shocked at what you can get for under $200k in El Paso. Granted I wouldn't necessarily want to live there, but still.

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15 minutes ago, Pattmost20 said:

Just an aside, I am always shocked at what you can get for under $200k in El Paso. Granted I wouldn't necessarily want to live there, but still.

Texas homes are really cheap. They're almost always built slab-on-grade (no basement) and many of the subcontractors are migrant labor from Mexico. And land is cheap because you can buy it 1000s of acres at a time. 

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On 12/28/2018 at 6:05 PM, GRDadof3 said:

I'm guessing actually that the number of deaths as a percentage of an MSA's population is probably pretty standard across most metros. What probably varies a bunch is the number of births. Areas attracting a lot of young families probably have much higher birth rates compared to their death rates. 

I wish there were an easy way to cull that data. :)

Mlive is looking at births vs deaths in Michigan:

https://www.mlive.com/expo/news/g66l-2019/01/d12c4dc6468525/number-of-michigan-births-hits.html

And they even did a color-coded map of the country's birthrates by State. 

And another article with breakdowns by county:

https://www.mlive.com/expo/news/g66l-2019/01/37926cc2b0664/michigan-counties-ranked-by-nu.html

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On 11/29/2018 at 9:55 AM, walker said:

. . . The Economist ran an article about last year’s federal tax cut legislation creating “opportunity zones.”  If I’m understanding this right, if you invest in these zones you can write off any capital gains you make for ten years.  As you can see by the title of the article, they consider it a boondoggle:

Will opportunity zones work? Or are they just a tax break for America’s wealthiest?

. . . 

Footnotes:

OPPORTUNITY ZONES RESOURCES including how I came up with the map:

GOV: Opportunity Zones

From the IRS: List of “opportunity zone” census tracts by state and county:

IRS: opportunity zones - census tracts

 

On 11/29/2018 at 12:30 PM, GRDadof3 said:

. . . This is a really bad tax break that was not needed. If you're a landlord (like me), I'm charging enough rent to be cash-flow-positive enough to make the risk worth my while. If the home goes up in value over the time I own it and go to sell, that's just a bonus (one for which I'll pay capital gains tax on and not complain). 

So investors will flood into these zones and buy up properties (even more than they have been) driving up prices which will in turn drive up rents, forcing people out or at least giving them way less disposable income to spend on local businesses. Making poor people even poorer. I would think even most conservatives would see this as a bad idea.  

Just an update on opportunity zones, John Gallagher, the business editor at the Free Press, a couple of days ago wrote about a study that says that the opportunity zones tax break is/was not a good idea.  But then GRDadof3 already said that above:

FREE PRESS: opportunity zones study

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