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How will the downtown apartment market shake out?


GRDadof3

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22 hours ago, GRDadof3 said:

If the developer cannot make the financing work on the project with that much affordable housing in the project, they make a payment to the city in lieu of meeting the requirement. That money then goes toward other city initiatives for affordable housing. 

Chicago has some variation on this.  It was recently brought up with regard to some sizable developments happening near or at the South Loop. 

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23 hours ago, GRDadof3 said:

 

So could a program like this work in GR? Does GR need a program like this? It only applies to new developments, not existing housing (no rent controls are allowed per Colorado law apparently). 

Jeff-I found this article to be intriguing and confusing.  In the same article it says rent control is illegal in Colorado, that would include an inclusionary zoning ordinance and at the same time states that Boulder has inclusionary zoning.  I don't get it...

Also in the article it states that, "Between 2009 and 2014, the city has given out more than $22 million for 481 new permanently affordable housing units, both ownership and rental. Another $11.7 million has gone toward rehabilitation of 827 existing affordable housing units.  The city has a total of 3,336 affordable housing units and has roughly $7 million available for new projects in 2015."

The population of Boulder is less than half of Grand Rapids yet that have spent a total of $33.7 M on affordable housing?  These can't be state or federal dollars, or the article is erroneously stating that "the city has given out..."

I think I am going to have to look into this further.

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22 minutes ago, lighthousedave said:

Jeff-I found this article to be intriguing and confusing.  In the same article it says rent control is illegal in Colorado, that would include an inclusionary zoning ordinance and at the same time states that Boulder has inclusionary zoning.  I don't get it...

Also in the article it states that, "Between 2009 and 2014, the city has given out more than $22 million for 481 new permanently affordable housing units, both ownership and rental. Another $11.7 million has gone toward rehabilitation of 827 existing affordable housing units.  The city has a total of 3,336 affordable housing units and has roughly $7 million available for new projects in 2015."

The population of Boulder is less than half of Grand Rapids yet that have spent a total of $33.7 M on affordable housing?  These can't be state or federal dollars, or the article is erroneously stating that "the city has given out..."

I think I am going to have to look into this further.

Colorado municipalities can have inclusionary zoning, but they cannot have rent controls because of legislation (and their State Supreme Court apparently). Sounds like Denver has a similar program:

http://www.denverite.com/denver-doesnt-rent-control-14819/

But there is still affordable housing in Denver where rents are restricted.

Why doesn’t that housing run afoul of the prohibition on rent control? That’s because the government can make rental restrictions a voluntary condition of receiving public money for a project. This doesn’t count as rent control because the developer doesn’t have to take government money. He or she could just build entirely with private financing and charge market rents.

I think that $33.7 Million is correct. They've had this program going since 2000 and reading the article, it sounds like a lot of developers opt for the cash ILO option instead of including affordable housing in their developments. $19 Million was collected between 2009 - 2014, and they probably already had a balance in the fund.

They also say...

Martens said affordable housing developers such as Boulder Housing Partners and Thistle Communities can leverage $4 to $6 in other financing for every dollar they receive from the cash-in-lieu contributions.

and this...

With a few exceptions, it's hard to draw a direct line between specific market-rate projects' contributions and specific affordable housing projects. The cash-in-lieu is mingled with federal, state and local affordable housing money in one budgetary pool.

I wonder how much the developer has to pay to take the cash ILO option? Is it a percentage of cost? $ per unit? 

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3 minutes ago, GRDadof3 said:

Colorado municipalities can have inclusionary zoning, but they cannot have rent controls because of legislation (and their State Supreme Court apparently). Sounds like Denver has a similar program:

http://www.denverite.com/denver-doesnt-rent-control-14819/

But there is still affordable housing in Denver where rents are restricted.

Why doesn’t that housing run afoul of the prohibition on rent control? That’s because the government can make rental restrictions a voluntary condition of receiving public money for a project. This doesn’t count as rent control because the developer doesn’t have to take government money. He or she could just build entirely with private financing and charge market rents.

I think that $33.7 Million is correct. They've had this program going since 2000 and reading the article, it sounds like a lot of developers opt for the cash ILO option instead of including affordable housing in their developments. $19 Million was collected between 2009 - 2014, and they probably already had a balance in the fund.

They also say...

Martens said affordable housing developers such as Boulder Housing Partners and Thistle Communities can leverage $4 to $6 in other financing for every dollar they receive from the cash-in-lieu contributions.

and this...

With a few exceptions, it's hard to draw a direct line between specific market-rate projects' contributions and specific affordable housing projects. The cash-in-lieu is mingled with federal, state and local affordable housing money in one budgetary pool.

I wonder how much the developer has to pay to take the cash ILO option? Is it a percentage of cost? $ per unit? 

Thanks Jeff.  The newly Mayoral appointed Housing Committee met this past week and discussed looking into other programs around the nation.  We will certainly look to Colorado for their models.

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7 minutes ago, lighthousedave said:

Thanks Jeff.  The newly Mayoral appointed Housing Committee met this past week and discussed looking into other programs around the nation.  We will certainly look to Colorado for their models.

Wow, look at this:

http://bizwest.com/city-of-boulder-allocates-8-25m-toward-affordable-housing-conversions/

 

And another good resource for specifics:
 

http://www.mayorsinnovation.org/images/uploads/pdf/12_-_Boulder_housing.pdf

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9 minutes ago, GRDadof3 said:

More good stuff coming out of Colorado!  I love the creativity on financing.  I note they are using 4% LIHTC.  To me this is one of the most underutilized programs in our state.  Local units of government have to find ways to use local dollars to help developers leverage 4% credits as they are non-competitive.  

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4 minutes ago, lighthousedave said:

More good stuff coming out of Colorado!  I love the creativity on financing.  I note they are using 4% LIHTC.  To me this is one of the most underutilized programs in our state.  Local units of government have to find ways to use local dollars to help developers leverage 4% credits as they are non-competitive.  

What the city of GR could also do is set the income limitations on its own programmed housing slightly higher than the LIHTC programs, so that it provides housing for that "missing middle." 

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23 minutes ago, GRDadof3 said:

What the city of GR could also do is set the income limitations on its own programmed housing slightly higher than the LIHTC programs, so that it provides housing for that "missing middle." 

Actually GR needs to do both and, we need more LIHTC units specifically for families as opposed to the plethora of studio and one bedroom projects we have been getting AND we need to incentivize development for middle income families.  Both are glaring holes in our market right now.  Our affordable housing network of developers recently got together and compared their waiting lists for LIHTC units, there are over 10,000 families collectively waiting right now!  This does not include the over 10,000 families that applied for one of the 100 new GR Housing Commission units recently opened in Creston Plaza. 

Developers are telling me that, when the new developments underway or on the books to get underway now are placed in service that "market rate housing is going to be about set" (an actual quote from one of our big developers).  Contrast that to the fact that the GRAR, which covers 7 counties was averaging 11,000 active monthly listings in 2006, and current average is about 1,700.  These are primarily affordable home ownership opportunities for working class families.  That is the other glaring hole in our market.

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2 hours ago, lighthousedave said:

Actually GR needs to do both and, we need more LIHTC units specifically for families as opposed to the plethora of studio and one bedroom projects we have been getting AND we need to incentivize development for middle income families.  Both are glaring holes in our market right now.  Our affordable housing network of developers recently got together and compared their waiting lists for LIHTC units, there are over 10,000 families collectively waiting right now!  This does not include the over 10,000 families that applied for one of the 100 new GR Housing Commission units recently opened in Creston Plaza. 

Developers are telling me that, when the new developments underway or on the books to get underway now are placed in service that "market rate housing is going to be about set" (an actual quote from one of our big developers).  Contrast that to the fact that the GRAR, which covers 7 counties was averaging 11,000 active monthly listings in 2006, and current average is about 1,700.  These are primarily affordable home ownership opportunities for working class families.  That is the other glaring hole in our market.

Good info. 

Yes, only 1.6 months of inventory now:

 

 

Inventory.JPG

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In Chicago ...

' The biggest losers could be investors that own buildable land. To compensate for the higher cost, developers are likely to offer a lower price for sites that need zoning changes. Appraiser Ron DeVries, a vice president at Chicago-based Appraisal Research Counselors, estimates that a site worth $50,000 per unit under the old rules could be worth less than $35,000 per unit under the new one. “All else being equal, somebody is going to pay less for land than they did before,” he says'.

http://www.chicagobusiness.com/article/20151010/ISSUE01/310109998/chicago-apartment-developers-scurry-to-beat-new-affordable-housing-law

ARO FAQ:  http://chicagorealtor.com/advocacy/advocacy-resources/affordable-requirements-ordinance-aro-faqs/

Boomtown:  http://chicago.curbed.com/2015/11/23/9897580/november-plan-commission-recap

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15 hours ago, arcturus said:

In Chicago ...

' The biggest losers could be investors that own buildable land. To compensate for the higher cost, developers are likely to offer a lower price for sites that need zoning changes. Appraiser Ron DeVries, a vice president at Chicago-based Appraisal Research Counselors, estimates that a site worth $50,000 per unit under the old rules could be worth less than $35,000 per unit under the new one. “All else being equal, somebody is going to pay less for land than they did before,” he says'.

http://www.chicagobusiness.com/article/20151010/ISSUE01/310109998/chicago-apartment-developers-scurry-to-beat-new-affordable-housing-law

ARO FAQ:  http://chicagorealtor.com/advocacy/advocacy-resources/affordable-requirements-ordinance-aro-faqs/

Boomtown:  http://chicago.curbed.com/2015/11/23/9897580/november-plan-commission-recap

If this initiative brings down the value of vacant land, I don't think that's a bad thing. A lot of it is way overpriced (thanks mostly to Spectrum IMO).

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  • 4 weeks later...

I've read a couple of articles saying that downtown is pretty much set for market rate apartments for the next couple of years, except for units in that elusive "missing middle." Wonder what this means for projects that haven't kicked off yet? (Creston, Bond II, etc). 

http://www.grbj.com/articles/86630-firm-tackles-missing-middle-housing-problem

In other news, we're not the only market that is seeing big ugly box apartment buildings. Saw this posted on flickr, a project in Des Moines. 

I think in 10 or 20 years we'll look at these projects like we look at Ransom Towers. Not good. 

 

ugly apartments.jpg

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I still think they look better than the hideous monsters that came out of the era that gave us Ransom Tower.  The plus side to the cheap exteriors cladding these characterless boxes is that they are WAY easier to renovate and update.  Even 5 years from now those Third Coast boxes could have an asthetic upgrade quite easily.   In comparison the time capsule brutalist architecture carries that look no matter what you do to it.

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52 minutes ago, MJLO said:

I still think they look better than the hideous monsters that came out of the era that gave us Ransom Tower.  The plus side to the cheap exteriors cladding these characterless boxes is that they are WAY easier to renovate and update.  Even 5 years from now those Third Coast boxes could have an asthetic upgrade quite easily.   In comparison the time capsule brutalist architecture carries that look no matter what you do to it.

ever been to Denver? Its littered with 10-20 story ransomish towers

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Good analogy . The renderings were so much nicer than what the actual product is.  Kind of sad too, because with a few modest design changes and better siding color and brick selections this could have been much better.  The brick selection really gets me, kind of like the brick on the new hotel next to the woman's health center on Michigan street .  What were they thinking there ?   These companies need and inhouse design pro to help manage these selections better . This was designed by concept design .  

Hopefully when it's landscaped that softens it.   

One of the best looking projects out there is the  building with holland brewing in it. 

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On 11/27/2016 at 11:51 AM, Aiga said:

Good analogy . The renderings were so much nicer than what the actual product is.  Kind of sad too, because with a few modest design changes and better siding color and brick selections this could have been much better.  The brick selection really gets me, kind of like the brick on the new hotel next to the woman's health center on Michigan street .  What were they thinking there ?   These companies need and inhouse design pro to help manage these selections better . This was designed by concept design .  

Hopefully when it's landscaped that softens it.   

One of the best looking projects out there is the  building with holland brewing in it. 

Agreed, I like it! Barley Flats it's called. 

And yes, why the hotel is bright orange and tan and dark gray and red?

 

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On 11/26/2016 at 0:59 PM, WMrapids said:

I agree.

IMG_2665.JPG

I have to agree.  This turned out extremely well, probably due in no small part to the efforts of the Eastown Community Association, which seems to be doing a superb job.  The only bad part of this is the balconies, which are almost never attractive.  

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6 hours ago, x99 said:

I have to agree.  This turned out extremely well, probably due in no small part to the efforts of the Eastown Community Association, which seems to be doing a superb job.  The only bad part of this is the balconies, which are almost never attractive.  

I think you had mentioned that you liked the one in Eastown above the Spoonlickers too? I for some reason think that one is well done too. No balconies.  It's basically just a big box but it's not bad. Reminds me of something you would've seen 100 years ago. 

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14 minutes ago, GRDadof3 said:

I think you had mentioned that you liked the one in Eastown above the Spoonlickers too? I for some reason think that one is well done too. No balconies.  It's basically just a big box but it's not bad. Reminds me of something you would've seen 100 years ago. 

I did.  That's also very nicely done.  What sets both of these buildings apart are 1) the decorative elements which appear to be in fairly good proportion, 2) facades that don't have lot of needless "breaking up" with bizarre offsets, and 3) cohesive materials and no "materials mishmash".  Facade variation and depth is achieved in the brickwork on this one, which is VERY refreshing to see.    These buildings are both simple, but competent, which is increasingly rare.  Somehow, they avoided the temptation to splash on some random fibercement or metal panels.  I don't know how that happened, but I'm hoping it's a trend.  

The building behind Fulton Square further down Carlton, on the other hand, went for more complexity and I think achieved an inferior result.  All of those offsets tend to look pretty cheesy, but I suppose that's a matter of opinion.  The could have better spent the money using decorative architectural elements which probably would have cost less and looked better.  Even getting rid of that protuberance in the middle would have helped.  It's just too busy.  

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21 minutes ago, x99 said:

I did.  That's also very nicely done.  What sets both of these buildings apart are 1) the decorative elements which appear to be in fairly good proportion, 2) facades that don't have lot of needless "breaking up" with bizarre offsets, and 3) cohesive materials and no "materials mishmash".  Facade variation and depth is achieved in the brickwork on this one, which is VERY refreshing to see.    These buildings are both simple, but competent, which is increasingly rare.  Somehow, they avoided the temptation to splash on some random fibercement or metal panels.  I don't know how that happened, but I'm hoping it's a trend.  

The building behind Fulton Square further down Carlton, on the other hand, went for more complexity and I think achieved an inferior result.  All of those offsets tend to look pretty cheesy, but I suppose that's a matter of opinion.  The could have better spent the money using decorative architectural elements which probably would have cost less and looked better.  Even getting rid of that protuberance in the middle would have helped.  It's just too busy.  

What do you think of the new townhouses behind Fulton Place? On the West Side? Too modern? 

This is about the only picture I could find:

30668731035_fd8a2ddc7f_m.jpg

Unless I have one. Maybe I have one. 

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19 minutes ago, GRDadof3 said:

What do you think of the new townhouses behind Fulton Place? On the West Side? Too modern? 

This is about the only picture I could find:

30668731035_fd8a2ddc7f_m.jpg

Unless I have one. Maybe I have one. 

Was just by there las night and noticed them.   I love the design.  Stay tuned...the Kent County Land Bank is about to come out with some new town home designs that are really different, very modern.  When we make our announcement I will post renderings on UP.  Please be kind everyone...who am I kidding x99 is going to hate them...:tw_angry:

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