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The "Affordable Housing" Discussion in GR


GRDadof3

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21 minutes ago, demhem said:

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? 

Habitat and ICCF along with the other non-profit housing corps are having a hard time getting houses, just like everyone else, but I would point out that Habitat and ICCF are currently sitting on a large number of build-able lots and tracks of land.  The KCLBA has a ton of sites/lots available to build on our web site www.kclba.org  click on the "Buy from Us" link.  Problem is builders are having a hard time making the numbers work on these sites.

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There still seems to be quite a few undeveloped areas in the Northeast and even a little on the northwest side of town. Also not the best layout of main roads and the city should think about that to develop those areas with higher density and a few extensions such as Plymouth and west Fulton. 

 

 I don't know much about the public housing commission but they did a nice job renovating some of the old projects, just not sure why they don't expand and build new buildings especially some higher density ones? I know many big cities are tearing down large towers and replacing them with med rises. I think that would be A good option for more affordable housing, plus it would keep some of the section 8 out of the privately and apartment complexes in the suburbs. There's obviously overflow demand for it.

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Not sure if this land would be able to be developed on or be restructured in a way that could be used for residential and commercial, but I've always thought that this piece of land could be developed in a well planned out manner so it gives a new dimension to the city. A walkable gridlike area where all buildings are close together and could add density (mid-rise buildings) and also be used as affordable housing, even though it would be right by downtown. 

Maybe it's a pipedream, but having this much land right by the city that hasn't really been developed on could be put to better use than whatever it's being used as now.

20170818_092333.png

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2 hours ago, KCLBADave said:

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.  [SNIP]

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.  

... On top of a property tax and income tax issue.  The tax rate on rental property is unbelievable.  $1300 is a fantasy!  That would be a $50,000 house/unit.  Try more like $3,000 a year for a place that rents for $900 to $1000 a month.   That's $250 a month per unit.  Now tack on the $50 a month in city income tax, and you're at $300 in local tax before you even start talking other tax.  Each time the city sticks its hand out, it happily screws those who can least afford it the worst.

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6 minutes ago, x99 said:

... On top of a property tax and income tax issue.  The tax rate on rental property is unbelievable.  $1300 is a fantasy!  That would be a $50,000 house/unit.  Try more like $3,000 a year for a place that rents for $900 to $1000 a month.   That's $250 a month per unit.  Now tack on the $50 a month in city income tax, and you're at $300 in local tax before you even start talking other tax.  Each time the city sticks its hand out, it happily screws those who can least afford it the worst.

At least we don't have millage rates of 60 to 90 mills, like many Detroit area cities have. But that's a topic for another time. 

1 hour ago, demhem said:

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? 

Oh I know, I'm a huge supporter of Habitat and the E.D. is a friend of mine. But what Habitat and ICCF provide for low income households, is still taking from an ever shrinking pie. Whoever thought we'd be having this discussion, when the picture was very different just 5 or 6 years ago. 

My big issue is the number of out-of-state investors/flippers who have latched onto the area and are buying up low priced homes. Carpet baggers. :)

 

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49 minutes ago, Raildude's dad said:

That's the Butterworth landfill. Google it. Capped with a clay layer

Forgive my ignorance, I assume this means it cannot be redeveloped at least for a while?  I've always felt the north side of the river west of downtown has been ridiculously underdeveloped.  Does anyone think it ever would be?

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3 minutes ago, MJLO said:

Forgive my ignorance, I assume this means it cannot be redeveloped at least for a while?  I've always felt the north side of the river west of downtown has been ridiculously underdeveloped.  Does anyone think it ever would be?

most of that area can not be developed because of historic gypsum mines underneath.  The means no sound foundations and a bunch of other issues.  Making it a park or bike trails is the most its going to get for a long while.

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14 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 West Side has some of the most poorly-maintained neighborhoods in town full of homes that are far past their due date. That's just an unfortunate fact. What I said will likely be played out by all of the development that will take place between the Zoo and GVSU in the next 10 years, as well as plenty of properties south of Leonard. I could easily cite the neighborhood W. of Division, E. of US-131, and north of Hall as another that needs to be flattened and rebuilt, or a great deal of the area north of I-196, along Lafayette, which is already heading towards this end as we speak.

And there simply aren't enough random scattered parcels to make up the deficit on its own. On top of that, everything you build between two occupied homes introduces almost guaranteed opposition or headaches, from "neighbors" whom will fight almost every one of these new developments. This process could take years to complete when we have a shortage today.

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1 hour ago, GR_Urbanist said:

The West Side has some of the most poorly-maintained neighborhoods in town full of homes that are far past their due date. That's just an unfortunate fact.

I feel like this could be said about the NE, SE and SW sides of town too. Really any area that housed working class families/people in the 50's and fell on hard times in the last few decades. 

 

2 hours ago, GRDadof3 said:

My big issue is the number of out-of-state investors/flippers who have latched onto the area and are buying up low priced homes. Carpet baggers. :)

 

It's the new 'safe' investment strategy for aging baby boomers. I get at least one letter a quarter from a lawyer representing out-of-state investors with a cash offer and willing to close in two weeks if I 'name my price' on my lower Westside home. 

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3 hours ago, GR_Urbanist said:

The West Side has some of the most poorly-maintained neighborhoods in town full of homes that are far past their due date. That's just an unfortunate fact. What I said will likely be played out by all of the development that will take place between the Zoo and GVSU in the next 10 years, as well as plenty of properties south of Leonard. I could easily cite the neighborhood W. of Division, E. of US-131, and north of Hall as another that needs to be flattened and rebuilt, or a great deal of the area north of I-196, along Lafayette, which is already heading towards this end as we speak.

And there simply aren't enough random scattered parcels to make up the deficit on its own. On top of that, everything you build between two occupied homes introduces almost guaranteed opposition or headaches, from "neighbors" whom will fight almost every one of these new developments. This process could take years to complete when we have a shortage today.

The replacement cost for many of those homes though is way more than the market value. That makes insurance adjusters nervous because it's a motivator for arson. 

The only way that mowing down homes for new housing will help this situation is if you pick up at least 2 - 3 units in the space that was previously occupied by 1 home.

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16 hours ago, GRDadof3 said:

The only way that mowing down homes for new housing will help this situation is if you pick up at least 2 - 3 units in the space that was previously occupied by 1 home.

Call it crazy but we should start our own investment pool.  Considering the knowledge here we should break even at least lol.

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On 8/18/2017 at 0:49 PM, x99 said:

... On top of a property tax and income tax issue.  The tax rate on rental property is unbelievable.  $1300 is a fantasy!  That would be a $50,000 house/unit.  Try more like $3,000 a year for a place that rents for $900 to $1000 a month.   That's $250 a month per unit.  Now tack on the $50 a month in city income tax, and you're at $300 in local tax before you even start talking other tax.  Each time the city sticks its hand out, it happily screws those who can least afford it the worst.

It not a fantasy in my experience as a rental property owner .  And i'm guessing its not for a lot of  others who bought in the aftermath of the 2008 ish crash.  

For example:

We paid 20k for a  3 bedroom house in 2010.  Put 50K into it.  Almost everything in it is  new other that the foundation and the studs. It rents for about $1350 a month. Taxes are about $1400 a month.   I think insurance is around $1000 a year for $200k of coverage .  It may cost more to build it new, but i never have had an insurance agent nervous when we have asked for a lower insurance amount than the rebuild cost.

There are still deals more recent than that -

About two years ago, we bought a 3 bedroom house for 30k.  It had been a land bank house that had sold for 10k.  The person we bought it from flipped it in a month putting at best 10k into it in a somewhat sloppy redo.  We spent an additional 5k in improvement.  While it not not very fancy, and still looks a bit rough on the outside, it rents at substantially below market rate to a family was previously  living on someones couch.  The property doesn't make a lot of profit but still beats most mutual funds.  

 I have several more examples.    i think there are still opportunities like this out there.  There are just fewer than 7-8 years ago.

I see that land bank has properties that sale is restricted to people with certain income levels.  What those same homes could be sold to an investor who would agree to rent to people below certain income levels?

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On ‎8‎/‎18‎/‎2017 at 10:37 AM, EastownLeo said:

most of that area can not be developed because of historic gypsum mines underneath.  The means no sound foundations and a bunch of other issues.  Making it a park or bike trails is the most its going to get for a long while.

Good to know. It would be nice to use that land someday for development if and whenever that soil will be adequate enough to build on.

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11 hours ago, TheSutterKing said:

Good to know. It would be nice to use that land someday for development if and whenever that soil will be adequate enough to build on.

It will never be suitable to develop. Not only is it a former landfill, it's a toxic waste dump (medical waste in parts of it from the hospitals going back to the mid 1900's). It's clay capped so that that waste will never leach out into the environment from now until perpetuity (one can hope). The only thing you can do is put concrete pads on it, that don't pierce the cap, which is what they talked about doing with the solar field array that was planned there but is now dead. 

https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0502576&msspp=med

http://www.mlive.com/news/grand-rapids/index.ssf/2017/02/solar_company_working_on_forme.html

Unless we become like China and they loosen environmental standards and just build on it, for which I ask, who would want to live on top of a toxic waste dump? 

 

 

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11 hours ago, uncus said:

It not a fantasy in my experience as a rental property owner .  And i'm guessing its not for a lot of  others who bought in the aftermath of the 2008 ish crash.  

For example:

We paid 20k for a  3 bedroom house in 2010.  Put 50K into it.  Almost everything in it is  new other that the foundation and the studs. It rents for about $1350 a month. Taxes are about $1400 a month.   I think insurance is around $1000 a year for $200k of coverage .  It may cost more to build it new, but i never have had an insurance agent nervous when we have asked for a lower insurance amount than the rebuild cost.

There are still deals more recent than that -

About two years ago, we bought a 3 bedroom house for 30k.  It had been a land bank house that had sold for 10k.  The person we bought it from flipped it in a month putting at best 10k into it in a somewhat sloppy redo.  We spent an additional 5k in improvement.  While it not not very fancy, and still looks a bit rough on the outside, it rents at substantially below market rate to a family was previously  living on someones couch.  The property doesn't make a lot of profit but still beats most mutual funds.  

 I have several more examples.    i think there are still opportunities like this out there.  There are just fewer than 7-8 years ago.

I see that land bank has properties that sale is restricted to people with certain income levels.  What those same homes could be sold to an investor who would agree to rent to people below certain income levels?

 

What's the market value of your first example? 

We own a rental and our PITI + other costs is about $1050 - $1075 a month. We charge $1450 a month. We could most likely get more but the tenants are great and take good care of the place. We paid about $150,000 two years ago, put about $5000 - $6000 into cosmetic changes like changing out carpet, exposing hardwood floors in the bedrooms, new laminate in the kitchen that we installed and repainted much of it, right after we bought it. The last I checked comps it would probably sell for $195,000 now. But we don't feel like kicking the tenants out. Might as well hang onto it. Yes, way better than a mutual fund, although my mutual funds have been on fire lately. 

But are we part of the problem? :) Or is it just market demand? 

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Hard to say

Houses in the same block and a couple blocks in one direction sell for under 100k.  Two blocks in the other direction things are going to 200-300k.  I'm guessing it would sell for mid to high 100k

I should say, that this house is a very atypical situation.  The seller had gutted it, made it into an open floor plan,  new roof, windows and siding and then bank foreclosed on it.

As far as being part of the problem . . . i'd rather have someone local own and manage it than someone out of state or a private equity first.

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On 8/18/2017 at 1:48 PM, GR_Urbanist said:

The West Side has some of the most poorly-maintained neighborhoods in town full of homes that are far past their due date. That's just an unfortunate fact. What I said will likely be played out by all of the development that will take place between the Zoo and GVSU in the next 10 years, as well as plenty of properties south of Leonard. I could easily cite the neighborhood W. of Division, E. of US-131, and north of Hall as another that needs to be flattened and rebuilt, or a great deal of the area north of I-196, along Lafayette, which is already heading towards this end as we speak.

And there simply aren't enough random scattered parcels to make up the deficit on its own. On top of that, everything you build between two occupied homes introduces almost guaranteed opposition or headaches, from "neighbors" whom will fight almost every one of these new developments. This process could take years to complete when we have a shortage today.

4

You could say this about almost any neighborhood in the City. Maybe I'm biased, but as a neighbor of the Zoo I disagree with you once more. My house, as well as most of the houses around me are in exceptional condition for their age. Most are owner-occupied and most are very well kept. There are outliers, but this was the case in every older urban neighborhood I've lived in (Heritage Hill, Eastown, and Heartside). There is no evidence of my neighborhood "heading towards this end." 

Where do you live? 

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  • 2 months later...

There was a speaker series put on by the Grand Rapids Public Library on this topic (actually more on gentrification) and interestingly yesterday the city announced its Housing Now! initiative to come up with concrete policy and legislative changes to address the housing affordability issues.

http://www.mlive.com/news/grand-rapids/index.ssf/2017/11/grand_rapids_affordable_housin_2.html

Some of highlights:

  • Proposed ordinance amendment to reduce PILOT (Payment in Lieu of Taxes) fees
  • Proposed policy amendment to provide homeownership incentives
  • Proposed ordinance to provide incentives for small-scale development
  • Proposed policy amendment to provide incentives for affordable housing in the Neighborhood Enterprise Zone (NEZ) tool
  • Proposed policy to encourage voluntary development agreements for affordable housing
  • Proposed ordinance to provide incentives for increased density
  • Proposed policy to provide requirements for affordable housing whenever the city is a partner in an affordable housing project
  • Proposed ordinance to permit accessory dwelling units by right
  • Proposed ordinance to permit non-condo, zero-lot-line housing
  • Proposed ordinance to regulate rental applications
  • Proposed policy to establish the Affordable Housing and Preservation Fund
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3 hours ago, GRDadof3 said:

There was a speaker series put on by the Grand Rapids Public Library on this topic (actually more on gentrification) . . .

The speaker series panel discussion at the library last night was live streamed and is posted on YouTube for anyone who is really really interested and has got the time to watch.   The star of the show is Dave Allen, aka KCLBADave.  Audio begins at 3:45:

Gentrification Meeting

EDIT: For a short less raw version, here's a summary that Mlive just posted:

Mlive summary

 

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1 hour ago, walker said:

The speaker series panel discussion at the library last night was live streamed and is posted on YouTube for anyone who is really really interested and has got the time to watch.   The star of the show is Dave Allen, aka KCLBADave.  Audio begins at 3:45:

Gentrification Meeting

EDIT: For a short less raw version, here's a summary that Mlive just posted:

Mlive summary

 

Back story, I got a call on Friday from someone telling me that they saw that I was on this panel.  That was news to me! :tw_expressionless:.  Since my mug was already distributed for the event and I had the evening open, I participated.  Frankly, it was kind of hard for me to answer some of the questions because they were so pointed as it relates to the City Commission.  Regardless, I was open and blunt and will own what I said.  The room was packed.

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1 hour ago, KCLBADave said:

Back story, I got a call on Friday from someone telling me that they saw that I was on this panel.  That was news to me! :tw_expressionless:.  Since my mug was already distributed for the event and I had the evening open, I participated.  Frankly, it was kind of hard for me to answer some of the questions because they were so pointed as it relates to the City Commission.  Regardless, I was open and blunt and will own what I said.  The room was packed.

My beef with the event is that not only for these panel events do you need to have diversity of culture/color/background, you also have to have diversity of thought. If your panel all completely agrees with each other, why have a panel? My guess is that nothing that was said last night will become anything beyond last night's event. Not aimed at you Dave, as I know you're working on this issue behind the scenes, but nothing earth-shattering was said, IMO. 

I'm much more optimistic about the report coming out at the next city commission meeting (mentioned in the Mlive article ^^^). 

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1 hour ago, GRDadof3 said:

My beef with the event is that not only for these panel events do you need to have diversity of culture/color/background, you also have to have diversity of thought. If your panel all completely agrees with each other, why have a panel? My guess is that nothing that was said last night will become anything beyond last night's event. Not aimed at you Dave, as I know you're working on this issue behind the scenes, but nothing earth-shattering was said, IMO. 

I'm much more optimistic about the report coming out at the next city commission meeting (mentioned in the Mlive article ^^^). 

Jeff, I could not agree with you more.  The housing recommendations are live now, we finished them up this AM.  Potentially even more impactful is the recommendations from the Rose Fellowship.  As I just stated in the morning commission meeting, if one understands the full implications of many of these recommendations, they have the potential to be incredibly controversial and impactful (the latter is my personal opinion.

Here is a link:

http://s3.amazonaws.com/downtowngr.org/general/Rose-Center-Presentation-to-City-Commission-11.14.17.pdf?mtime=20171114104222

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1 hour ago, arcturus said:

We had those, they spray painted A's (anarchy) on a bunch of buildings in East Hills, threw bricks through windows at Winchester and other businesses, and torched a garage at Fairmount Square. Turned out not to be disenfranchised African Americans, but a bunch of white kids squatting in a house in Grandville with too much time and too much entitlement on their hands.

Not saying that gentrification doesn't happen or has not happened in Grand Rapids. In fact, someone who used to post here purchased 40+ properties in a single neighborhood, jacked up the rents on residents, and even joined the neighborhood association and heavily pushed an area specific plan that would benefit his "dream" development projects. Those things happen.

Just like residents on the West Side who are (were) part of the Challenge Grants Scholarship program started at Harrison Park Elementary, guaranteeing funding for a college degree if the kids stayed all the way through high school, put in place by the Grand Rapids Community Foundation. Now the investors/landlords on the West Side in that area have jacked up rents to where the residents can no longer afford it, and are now losing out on the challenge grant scholarships, even though their kids did everything asked of them and have made it into their Junior and Senior years of high school with good grades. 

Gentrification does happen, and is happening. But to say that a new restaurant opening in an defunct East Hills building is dangerous to people's health? C'mon.

One of the items proposed in the new Housing Now! initiative is increased efforts to foster homeownership. If you're a renter, you're a victim when rates start to rise. If you own your home, on a fixed rate mortgage, you're much more in control. Proposal A passed over 20 years ago in Michigan caps your property tax rates (to inflation or 3%) so that you don't get hammered by rising property values around you. 

So I think to say that all small neighborhood businesses moving into an area like Wealthy or Bridge Street is not only wrong, it's irresponsible. 

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