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GRDadof3

The "Affordable Housing" Discussion in GR

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GRDadof3    1837

In case you haven't heard, there's a housing shortage in the U.S. and it's particularly bad in the Grand Rapids area with its booming economy. It affects lower-income households the most.

The city of GR/Rosalynn Bliss nominated a 20 member Housing Advisory Committee to start addressing the issue. Some really good ideas came out of it, actually. 

http://www.mlive.com/news/grand-rapids/index.ssf/2017/08/12_affordable_housing_strategi.html

 

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EastownLeo    140

I know other cities have reduced the minimum Sq footage requirement.

I wonder if GR has looked into smaller homes and the proportional lower cost of ownership.  

"City of Grand Rapids requires that single family dwelling units must have a minimum gross floor area of 750 square feet"

I know tiny houses are a trend, but putting a mortgage payment closer to mid level rent allows for building of equity and the first step to progress.

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I'd like to see the city encourage density.  but if we're going to encourage construction of "mother in-law" apts, studios or "tiny homes" we need to ensure they're used for living and not just AirBnB rentals, which is what's happened in many other boom cities recently.  

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GRDadof3    1837
19 minutes ago, scottythe1nonly said:

I'd like to see the city encourage density.  but if we're going to encourage construction of "mother in-law" apts, studios or "tiny homes" we need to ensure they're used for living and not just AirBnB rentals, which is what's happened in many other boom cities recently.  

Pretty sure AirBnB's are not allowed in Grand Rapids? I haven't kept up on that recently. 

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GVSUChris    133
10 minutes ago, GRDadof3 said:

Pretty sure AirBnB's are not allowed in Grand Rapids? I haven't kept up on that recently. 

They are allowed but there are many regulations, including a license/permit and I believe the owner technically has to live there as well/be a primary resident. I'm probably not doing justice to the structure of how they are allowed here but I know that barring you've taken all the steps they require, AirBnb is allowed here. 

Edited by GVSUChris

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GRDadof3    1837
Just now, GVSUChris said:

They are allowed but there are many regulations, including a license and I believe the owner technically has to live there as well/be a primary resident. 

Ah! That's right. So technically you could AirBnB an inlaw flat, as long as you lived in the primary residence.

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EastownLeo    140
30 minutes ago, GRDadof3 said:

Ah! That's right. So technically you could AirBnB an inlaw flat, as long as you lived in the primary residence.

For Accessory Dwelling Units "inlaw flats"  The city says.  

"Leasing or rental of the ADU for tenancies of less than 30 days or to more than 11 different parties in any calendar year shall be prohibited. "

So NO AirBnB.

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x99    365
2 hours ago, GRDadof3 said:

Doesn't really tell you much though about why beyond the superficial.  And I'm not sure deceasing the size for a single family home would help that much.  Basic square footage is not that expensive, since all square footage does not cost the same. You still have to build all of the most expensive rooms (bathroom and kitchen) and put in all of the expensive mechanical systems no matter the size.  Building a house used to mean slapping up walls, putting in a few outlets, cutting some holes for HVAC, tossing in some fiberglass batts, drywalling the thing, and bam you're done.  Now, it's a much more technologically involved process involving far more details and skills.  Fire caulk, air sealing, ice and water shield, foundation ties, hurricane clips, portal framed garage doors, overframed roofs (ever see an old 2x6 attic collapse?  no? Hmm..), vast numbers of circuits and fancy breakers, huge amounts of insulation, blower door testing, 60' wide lots, 24' wide streets, fire rated walls if the houses are spaced close ... It's all tens of thousands of dollars of added cost, labor and materials. Better houses, yes, but now so expensive that the poor/lower middle class cannot them.  They get trailers or used up houses.  Law of unintended consequences.  

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Onekama    46

A few new construction "small" houses just hit the market this week in downtown Holland for $110k.  488 sq. ft, 1 bed, 1 bath.  Would this ever fly in GR?

https://www.zillow.com/homedetails/385-395-Central-Ave-Holland-MI-49423/2093156508_zpid/

http://www.hollandsentinel.com/entertainmentlife/20170131/jubilee-ministries-busy-constructing-small-homes-in-holland

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wmrharris    26
5 hours ago, Onekama said:

A few new construction "small" houses just hit the market this week in downtown Holland for $110k.  488 sq. ft, 1 bed, 1 bath.  Would this ever fly in GR?

https://www.zillow.com/homedetails/385-395-Central-Ave-Holland-MI-49423/2093156508_zpid/

http://www.hollandsentinel.com/entertainmentlife/20170131/jubilee-ministries-busy-constructing-small-homes-in-holland

I saw them the other day -- they have a certain style and being compact, create an interesting mix on the street.

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GRDadof3    1837
8 hours ago, x99 said:

Doesn't really tell you much though about why beyond the superficial.  And I'm not sure deceasing the size for a single family home would help that much.  Basic square footage is not that expensive, since all square footage does not cost the same. You still have to build all of the most expensive rooms (bathroom and kitchen) and put in all of the expensive mechanical systems no matter the size.  Building a house used to mean slapping up walls, putting in a few outlets, cutting some holes for HVAC, tossing in some fiberglass batts, drywalling the thing, and bam you're done.  Now, it's a much more technologically involved process involving far more details and skills.  Fire caulk, air sealing, ice and water shield, foundation ties, hurricane clips, portal framed garage doors, overframed roofs (ever see an old 2x6 attic collapse?  no? Hmm..), vast numbers of circuits and fancy breakers, huge amounts of insulation, blower door testing, 60' wide lots, 24' wide streets, fire rated walls if the houses are spaced close ... It's all tens of thousands of dollars of added cost, labor and materials. Better houses, yes, but now so expensive that the poor/lower middle class cannot them.  They get trailers or used up houses.  Law of unintended consequences.  

Ha, I know. :) (I work in residential construction and development, dontcha know).  But what you're talking about doesn't really address the reason for the "housing shortage," which is affecting all price ranges. Even if you had a budget of $600,000 - $700,000, you're going to have a hard time finding a decent home that doesn't need $50 - $100,000 in updating. And good luck finding a nice lot for less than $150,000 to build your $450,000 - $500,000 home. Why do you think East Grand Rapids is being mowed down and rebuilt house by house, lot by lot? Because there is nothing decent to buy.

 

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GR_Urbanist    419

Well GR simply doesn't have any virgin plots in the city to build much of anything new.

It is going to be unpopular to suggest, but the only way any of this is going to work, is to demolish large tracts of obsolete housing stock in parts of the city, and start over with more compact, dense and diverse housing options. If low-income peoples cannot afford the current housing in the city, and much of that housing is slowly becoming dilapidated, or is barely kept in decent condition, then maybe it is just time to bite the bullet, and just wipe it clean.

 

What do we have to lose? We aren't talking about priceless architecture, especially on the west side. But we have tons to gain!

Edited by GR_Urbanist
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GRDadof3    1837
2 minutes ago, GR_Urbanist said:

Well GR simply doesn't have any virgin plots in the city to build much of anything new.

It is going to be unpopular to suggest, but the only way any of this is going to work, is to demolish large tracts of obsolete housing stock in parts of the city, and start over with more compact, dense and diverse housing options. If low-income peoples cannot afford the current housing in the city, and much of that housing is slowly becoming dilapidated, or is barely kept in decent condition, then maybe it is just time to bite the bullet, and just wipe it clean.

 

What do we have to lose? We aren't talking about priceless architecture, especially on the west side. But we have tons to gain!

If you've ever heard Darel Ross of LINC speak at a housing discussion, he says precisely that same thing. 

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jdkacz    38
10 hours ago, arcturus said:

Is it actually enforced effectively?

Yes, the city is serious in enforcing their Airbnb rules.

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GRLaker    249
18 hours ago, Onekama said:

A few new construction "small" houses just hit the market this week in downtown Holland for $110k.  488 sq. ft, 1 bed, 1 bath.  Would this ever fly in GR?

https://www.zillow.com/homedetails/385-395-Central-Ave-Holland-MI-49423/2093156508_zpid/

http://www.hollandsentinel.com/entertainmentlife/20170131/jubilee-ministries-busy-constructing-small-homes-in-holland

I saw that and actually considered looking at them...My only concern is will they stay nice and would equity be made on them? 

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GRDadof3    1837
18 hours ago, Onekama said:

A few new construction "small" houses just hit the market this week in downtown Holland for $110k.  488 sq. ft, 1 bed, 1 bath.  Would this ever fly in GR?

https://www.zillow.com/homedetails/385-395-Central-Ave-Holland-MI-49423/2093156508_zpid/

http://www.hollandsentinel.com/entertainmentlife/20170131/jubilee-ministries-busy-constructing-small-homes-in-holland

Interesting concept. I assume they're slab-on-grade or just a crawl space to keep the costs down? 

Found the plans for them on their fb page:

599440c2d8bb8_CentralCommonsHolland.thumb.JPG.cb07b3ae04267ae114a54ae9c9cb0465.JPG

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GRLaker    249
36 minutes ago, GRDadof3 said:

Interesting concept. I assume they're slab-on-grade or just a crawl space to keep the costs down? 

Found the plans for them on their fb page:

599440c2d8bb8_CentralCommonsHolland.thumb.JPG.cb07b3ae04267ae114a54ae9c9cb0465.JPG

My hope is that this and the redone homes to the east of it start to increase value and safety to the area. As it stands now, this is a pretty rough area.

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Onekama    46
2 minutes ago, GRLaker said:

My hope is that this and the redone homes to the east of it start to increase value and safety to the area. As it stands now, this is a pretty rough area.

An added bonus to these is that Central Ave. is part of the snowmelt system now!

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demhem    17
On 8/15/2017 at 9:31 PM, GR_Urbanist said:

Well GR simply doesn't have any virgin plots in the city to build much of anything new.

It is going to be unpopular to suggest, but the only way any of this is going to work, is to demolish large tracts of obsolete housing stock in parts of the city, and start over with more compact, dense and diverse housing options. If low-income peoples cannot afford the current housing in the city, and much of that housing is slowly becoming dilapidated, or is barely kept in decent condition, then maybe it is just time to bite the bullet, and just wipe it clean.

 

What do we have to lose? We aren't talking about priceless architecture, especially on the west side. But we have tons to gain!

I disagree, mostly. There are quite a few opportunities for small-scale development all over the city. These are not whole blocks but parcels here and there which are prime for infill development and could accommodate missing middle housing and small mixed-use structures. It's the diversity of housing stock (age, design, units) in neighborhoods which makes them eclectic, interesting, and affordable. You really love hating on the west side, don't you?

Edited by demhem
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GRDadof3    1837
9 hours ago, demhem said:

I disagree, mostly. There are quite a few opportunities for small-scale development all over the city. These are not whole blocks but parcels here and there which are prime for infill development and could accommodate missing middle housing and small mixed-use structures. It's the diversity of housing stock (age, design, units) in neighborhoods which makes them eclectic, interesting, and affordable. You really love hating on the west side, don't you?

The problem with that is you're competing with the non-profits like Habitat and ICCF to gather up those small lots here and there. Or you have landowners who are holding out with no desire to sell, or lots where it's really difficult to figure out who the true owner is (caught up in probate, trust or an estate, etc..). 

The ultimate goal should be that we no longer need affordable housing, because wages and employment rise enough to make home ownership and renting do-able for pretty much everyone.

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KCLBADave    119
29 minutes ago, GRDadof3 said:

The ultimate goal should be that we no longer need affordable housing, because wages and employment rise enough to make home ownership and renting do-able for pretty much everyone.

For obvious reasons I always have to be careful when I comment on this forum, especially on this topic.  But Jeff has really hit the nail on the head.  When discussing "affordable housing" I think it is extremely important that the discussion NOT focus on the actual price for rent or cost of a monthly mortgage, but rather on how much a person can afford based on what they earn.  Industry standard is that a person should not pay more than 30% of their monthly income on their housing costs, 45% for total monthly debt to income. 

Average rent in GR for a 2 bedroom is $900 a month.  So, to "afford" this much rent a household must be earning at least $39,000 annually, this equates to about $19 per hour. Too many people say, "well then rent should be lower!"  That is an easy assumption to make.  Problem is that whether it is a 2 bedroom home or duplex, or a 2 bedroom unit in a larger complex, rental property owners will tell you that it is hard to keep up a home unless you are taking in that amount of monthly rent.  Think about it:

Property Taxes: $1,300 annually (at least) or $108 a month, insurance $75 a month, water $40 a month, maintenance $50 a month, replacement reserves (putting away money for large repairs or replacements) $75 a month, vacancy (5% of rent) or $45 a month, and then debt service (when one considers the vast amount of rental property in our city, very few are owned free and clear) let's plug in $300 a month.  This adds up to $693 in monthly costs.  So the owner is netting $207 per month in a best case scenario.

If the landlord is charging less, there is a great risk of the property falling into blight.

Let's get back to the $39,000 in annual household income a family must earn in order to "afford" a two bedroom rental unit.  There are 73,026 households in GR.  The Median Household income for Grand Rapids is $40,355, meaning half of the households in the City earn below the $39,000 threshold I mentioned earlier.  

I could go on and on, but I think I have made my point.  Jeff is right, we have a wage issue here in Grand Rapids.  

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arcturus    145
12 minutes ago, KCLBADave said:

Jeff is right, we have a wage issue here in Grand Rapids.  

A wage issue which extends to the building trades.  Pay them more and watch the term 'shortage' used less IF you can convince them to come back or stick around.

The irony isn't lost ... higher wages mean higher home prices and less affordability UNLESS wages keep pace or exceed home prices.

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demhem    17
2 hours ago, GRDadof3 said:

The problem with that is you're competing with the non-profits like Habitat and ICCF to gather up those small lots here and there. Or you have landowners who are holding out with no desire to sell, or lots where it's really difficult to figure out who the true owner is (caught up in probate, trust or an estate, etc..). 

The ultimate goal should be that we no longer need affordable housing, because wages and employment rise enough to make home ownership and renting do-able for pretty much everyone.

The irony in that is that I've heard the leadership at Habitat say the exact same thing about private developers and landowners. It seems that everyone is having the same issue in acquiring land.

Do we have any small-scale developers on this forum that could shed light on the small infill topic? Difficulties? 

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