The Grand River?! You mean GR has a River?

[GRDadof3]

On 7/29/2015 at 0:37 PM, GRDadof3 said:

There's a new 3 story apartment building being proposed for a parcel along the river by the old Amtrak station parking lot, 449 Market Ave. It's working its way through the city now.

I didn't find any images online but here's the parcel.

https://farm1.staticflickr.com/455/20124239871_dac86468df_z.jpg

DTS - Winkelmann is working on the design (Verne Barry Place). Apparently one of the concerns is the large number of bonfires that are lit along the floodwall (on the river side, when the water is low).

 

Business Journal has an article today, 449 Market, going before the planning commission. (breaking news):

http://www.grbj.com/articles/84491-developer-plans-apartment-building-on-riverfront

[EastownLeo]

470 Market, across the street has had a significant amount of its interior gutted.  I used to rent in the building at it was a maze of walls and divided space.  Looking through the windows now, you can see many of those have been removed.  I know that last year this space was asking to be rezoned, but I never heard if that went through.  Has there been any updates on this space?

[ctpgr34]

Found this, not sure where it stands-  http://www.mlive.com/news/grand-rapids/index.ssf/2015/03/apartments_eyed_at_old_industr.html

[GRDadof3]

3 hours ago, EastownLeo said:

470 Market, across the street has had a significant amount of its interior gutted.  I used to rent in the building at it was a maze of walls and divided space.  Looking through the windows now, you can see many of those have been removed.  I know that last year this space was asking to be rezoned, but I never heard if that went through.  Has there been any updates on this space?

In the biz journal article it says:

The city re-zoned 14 properties last year from industrial to transitional city center. This development is the first proposed for any of the lots. 

I believe 470 was one of those 14. 

[GR_Urbanist]

20 hours ago, GRDadof3 said:

Business Journal has an article today, 449 Market, going before the planning commission. (breaking news):

http://www.grbj.com/articles/84491-developer-plans-apartment-building-on-riverfront

 

Wood TV report on it.

[GRDadof3]

Here's some more imagery for 449 Market. The reason they're going before the PC at this time is to get special approval for the facade treatment on the ground floor parking that faces the river side. Very similar to what the Orion project is going through along Monroe across from the Boardwalk. 

 

 

That poor guy is being pulled by his partner and the dog!  In two images!

 

[GR_Urbanist]

Gotta love arch. rendering humans. They are as interesting as the buildings!

This building looks good enough. The parking looks screened as well as it can be. It isnt like there is anything on the other side of the river that will be looking at it.

 

I cant see any reason why this will be held up.

[EastownLeo]

Here We Go!!!!

River front Property For Sale.

http://www.mlive.com/news/grand-rapids/index.ssf/2016/02/5_public_properties_going_up_f.html?ath=01f1f25885b9c5bb8186d5ecd336a9db#cmpid=nsltr_stryheadline

[x99]

 

On 2/11/2016 at 5:13 PM, GRDadof3 said:

In the biz journal article it says:

The city re-zoned 14 properties last year from industrial to transitional city center. This development is the first proposed for any of the lots. 

I believe 470 was one of those 14. 

It's a cool project, and exciting to see, but it does make you wonder how much of this will actually happen, and how much carnage there will be if the residential apartment boom pops.  I still can't get over talking to a developer not that long ago and asking him how much demand his market studies indicated was there at current rates.  He looked at me like I was crazy.  They never did a market study.  Just built.  The typical mantra is that it won't fall apart because "lending standards are better now" but that is only partially true.  The projections are based on the available rents.  But how long can you keep getting those rents when everyone is building as fast as possible?

There was an article a day or two ago where the DDA seemed to be questioning exactly the same thing.  Each one of these buildings, they observed, is basically equivalent to a small subdivision, and some rather large subdivisions.  And there are DOZENS of them all going up at once consisting of over a thousand residences being built, basically, as spec houses.  So at least someone realizes this is all slightly nuts.  Developers might want to "sit on" some of these projects, the DDA thought.  It's not a bad thought.  If there is only a market for 150 $1300 a month apartments, and we built ten times that... oh, my.  

The irony to me (so far) is that we're still basically building suburbs downtown since everything else you need to live is out in the suburbs... The retail infrastructure is not there and there are no plans for it.  Go figure.  

Edited February 23, 2016 by x99

[GR8scott]

1 hour ago, EastownLeo said:

Here We Go!!!!

River front Property For Sale.

http://www.mlive.com/news/grand-rapids/index.ssf/2016/02/5_public_properties_going_up_f.html?ath=01f1f25885b9c5bb8186d5ecd336a9db#cmpid=nsltr_stryheadline

 I hope they require certain utilization of the river front like a marina and walk ways also might be a good time to realign Monroe st  just south of Leaonard while they still own it

[GRDadof3]

21 minutes ago, x99 said:

 

It's a cool project, and exciting to see, but it does make you wonder how much of this will actually happen, and how much carnage there will be if the residential apartment boom pops.  I still can't get over talking to a developer not that long ago and asking him how much demand his market studies indicated was there at current rates.  He looked at me like I was crazy.  They never did a market study.  Just built.  The typical mantra is that it won't fall apart because "lending standards are better now" but that is only partially true.  The projections are based on the available rents.  But how long can you keep getting those rents when everyone is building as fast as possible?

There was an article a day or two ago where the DDA seemed to be questioning exactly the same thing.  Each one of these buildings, they observed, is basically equivalent to a small subdivision, and some rather large subdivisions.  And there are DOZENS of them all going up at once consisting of over a thousand residences being built, basically, as spec houses.  So at least someone realizes this is all slightly nuts.  Developers might want to "sit on" some of these projects, the DDA thought.  It's not a bad thought.  If there is only a market for 150 $1300 a month apartments, and we built ten times that... oh, my.  

The irony to me (so far) is that we're still basically building suburbs downtown since everything else you need to live is out in the suburbs... The retail infrastructure is not there and there are no plans for it.  Go figure.  

The true test is to start condo projects again. If there's that much of a demand, you should be able to pre-sell 75% of your project in less than a year (since a mortgage payment is way less than a rent payment now), if you kept your project to a decent size. 

There are about 150 condos sold every year downtown and very near downtown every year. I think that number could be easily expanded to 200 a year with some new projects, if the demand for apartments is really 1000 or 1500 new ones over the next 3 years. 

It's difficult to compare an apartment building to a suburban neighborhood. But yes shear number of "units absorbed" for an 80 apartment building is equivalent to a new suburban neighborhood around here, that would take at least 3 years to sell out. I assume the turn rate on an apartment building needs to be faster than 3 years..

Out by the Knapp's Corner Meijer two apartment projects are about to kick off totaling nearly 500 units. The two companies are national apartment developers and they actually do quite a bit of market study, I've seen it. 

 

 

[arcturus]

I'm guessing developers talk to each other to learn what their occupancy numbers are.  Apparently they must be robust enough (at least for now) for the new ones breaking ground to proceed unhesitatingly.  How quickly plans develop for the structure(s) on N Monroe near SpeakEZ should be an insight.  Ditto for the proposed one near Founders.

Edited February 23, 2016 by arcturus

[GRDadof3]

I was at a public hearing tonight where a national apartment developer gave a presentation for a new project. They stated that Kent County is projected to grow by 6800 households per year over the next 3 years, with about 57% of those households needing rental (and the rental vacancy rate in the county is in the 5 - 6% range). In their project, their household population averages about 1.7 people/unit. 

Those stats sounded pretty legit to me. The metro area will easily grow by 30,000 and about 2/3's of that is Kent County. If occupancy is basically full, then there's room for 11,628 new apartment units in the entire county over the next 3 years (6800x3x.57), if current growth trends continue for the next three years. I think there's probably a slow down on the horizon for the economy but not until 2018 or 2019.  

How many of those apartments will be suburban vs urban is another question. 

[GRDadof3]

15 hours ago, GR8scott said:

 I hope they require certain utilization of the river front like a marina and walk ways also might be a good time to realign Monroe st  just south of Leaonard while they still own it

How would you realign Monroe Street. Sounds interesting but how would you do it?

I didn't realize they were putting the water department building and the development center on the market too. Yowza.

 

 

[MJLO]

15 hours ago, GRDadof3 said:

How many of those apartments will be suburban vs urban is another question. 

I think we are already seeing the answer to that question.  The city has been much more growth and development friendly in comparison to the suburbs (particularly vs. the plebian minded township residents.)  Even the bulk of the newly planned "suburban" units are within the city limits out by Knapp.  What I can't account for is price point.  At some point the price point around the core will be brought down by the market, or we will all be surprised by what people are willing to pay.  It would be awesome to see the 2020 census show growth rates for the city of GR over 10%.   I think that's likely.

[x99]

28 minutes ago, MJLO said:

can't account for is price point.  At some point the price point around the core will be brought down by the market, or we will all be surprised by what people are willing to pay.  It would be awesome to see the 2020 census show growth rates for the city of GR over 10%.   I think that's likely.

That's exactly it.  Price point.  I would love to see these projects clustered around the river and elsewhere all come to fruition.  But it would be interesting to see how much rents can fall while the projects still remain viable.  When it comes down to numbers, (taking Morton's asking rents for an example) a $1300 single bedroom apartment is the rough equivalent of the mortgage (including taxes and insurance) on a $215,000 house.  The $1900 a month two bedrooms are--you ready for this?--about a $320,000 two bedroom house.  And that doesn't even include the cost to park.  Tack on two cars and you're up close to a $400,000 house.  If you already work downtown, or the development includes parking, the parking cost might not be incurred.  But no matter how you look at it, this is enough money for a brand new, 2500 square foot house with 4 bedrooms in a nice neighborhood.  Or enough for a decent used 3000 square foot house with 3 bedrooms in a nice neighborhood and those houses are only a 10 minute drive to downtown.  And living at the Morton or other downtown project, you still gotta drive those 10 minutes to where the houses are in order to buy groceries and other sundries.  

I love the growth, but when you put Chicago or East Coast apartment prices into an area where housing costs are a fraction of those areas, the equation starts to look really, really strange.  In some ways, I would actually be more confident about it if these projects did include major retailing components design to serve the residents.  The phantom "megaproject" was less weird to me.  As it stands, the financial equation for living in these places is a little hard to fathom.  Chicago?  I get it.  The downtown Grand Rapids office park?  Um, okay.  Again, I don't want to rain on anyone's parade.  This is all very exciting and great for the city, but it is also somewhat puzzling.  When the financial equation looks so weird, and there are no real "amenities" to living downtown, it's all somewhat concerning whether we're going to wind up with Icon On Bond Parts 2, 3, 4, 5 and 6.

[MJLO]

59 minutes ago, x99 said:

That's exactly it.  Price point.  I would love to see these projects clustered around the river and elsewhere all come to fruition.  But it would be interesting to see how much rents can fall while the projects still remain viable.  When it comes down to numbers, (taking Morton's asking rents for an example) a $1300 single bedroom apartment is the rough equivalent of the mortgage (including taxes and insurance) on a $215,000 house.  The $1900 a month two bedrooms are--you ready for this?--about a $320,000 two bedroom house.  And that doesn't even include the cost to park.  Tack on two cars and you're up close to a $400,000 house.

I do think your point is valid, and as I've stated prior the prices will follow the market.  I don't think you're taking into account operating costs when considering your mortgage comparison.  Yes these price points are high, and yes you could get a great deal of house in mortgage terms.  As far as I can see that's where the similarities end.  The utilities of a 2 bedroom downtown apartment are a fraction of what they would be in a home.  That is also not taking in property taxes and upkeep into account.  Once those are considered you're still paying hundreds less than you would be taking on the added responsibility of single unit home ownership.   Doing an apples to apples comparison the price of similar housing goes back down when considering the cost of operation, and maintenance.  

Also keep in mind that there is already a cheaper rental market for people who want to live in those same suburban locales. Be it renting a home, or in one of the suburban communities the rates are about 70% of the downtown rates.   Part of this price point goes to there being a pent up demand for people who want to live downtown.   Grand Rapids core in itself is somewhat of a desirable location and "brand" if you will.  People aren't being forced into it due to a lack of options, or because they couldn't find a $400,000 home in the suburbs.  They are paying those prices and willing to make those sacrifices because they want to be there.  That needs to be taken into consideration when talking about these prices.  They may seem over priced to you based on your personal desires,  but they would already be cheaper if more people thought that way.

[x99]

44 minutes ago, MJLO said:

That needs to be taken into consideration when talking about these prices.  They may seem over priced to you based on your personal desires,  but they would already be cheaper if more people thought that way.

Your points are all valid.  To clarify, though, I did include property taxes.  The difference would be the maintenance and utilities.  On a new house, the maintenance over the first 10-20 year period is virtually zero.  That's why people buy them.  At about 20 years you need a roof, furnace, and water heater.  It's well under $100 a month if you amortize it.  Marginally higher utilities would be an added cost.  Again, I'm not contesting that there is a market. My concern is whether there is a market for the one thousand units in the pipeline, and then some.  I guess we'll find out soon enough.  If all the stuff currently under construction can fill up without reducing prices, that will be a good sign.  

[GRDadof3]

1 hour ago, x99 said:

Your points are all valid.  To clarify, though, I did include property taxes.  The difference would be the maintenance and utilities.  On a new house, the maintenance over the first 10-20 year period is virtually zero.  That's why people buy them.  At about 20 years you need a roof, furnace, and water heater.  It's well under $100 a month if you amortize it.  Marginally higher utilities would be an added cost.  Again, I'm not contesting that there is a market. My concern is whether there is a market for the one thousand units in the pipeline, and then some.  I guess we'll find out soon enough.  If all the stuff currently under construction can fill up without reducing prices, that will be a good sign.  

Don't forget too that a home in the "vinyl suburbs", like a lot of urbanites call them, are usually way more energy efficient than an older home in the city. Most new homes are built to such strict energy standards (a whole bunch of new energy codes came out just a few weeks ago) that your average gas and electric bill on a 2400 square foot home is in most cases less than $150/month (if you use the plan where it averages out over a year). I know someone with a 2600 sf old home in the city who has a $600/month gas bill in the winter, just for heat!! That's a BMW car payment. That's a Fat Bike payment! 

I'm not at all saying that one way of life is better than another, but there are REALITIES and there's a lot to consider in these equations. I agree that the way to satisfy everyone's craving to have housing "in the middle" between overpriced market rate and LIHTC is to build new condos downtown. 

 

 

[organsnyder]

1 hour ago, GRDadof3 said:

Don't forget too that a home in the "vinyl suburbs", like a lot of urbanites call them, are usually way more energy efficient than an older home in the city. Most new homes are built to such strict energy standards (a whole bunch of new energy codes came out just a few weeks ago) that your average gas and electric bill on a 2400 square foot home is in most cases less than $150/month (if you use the plan where it averages out over a year). I know someone with a 2600 sf old home in the city who has a $600/month gas bill in the winter, just for heat!! That's a BMW car payment. That's a Fat Bike payment! 

I'm not at all saying that one way of life is better than another, but there are REALITIES and there's a lot to consider in these equations. I agree that the way to satisfy everyone's craving to have housing "in the middle" between overpriced market rate and LIHTC is to build new condos downtown. 

Old homes can be improved, however. In the few years we've owned our old house—which turns 100 this year—our gas bill has topped out at $250; we're not on the budget plan, so that's actual usage for the coldest months of winter. This is for 2500 sqft. We did spend quite a bit of money to insulate as much as possible, as well as installing a mod-con 95%-efficiency boiler.

[jas49503]

Many people are willing to pay a steep premium not to have to live in the suburbs. This is probably what is driving the price premiums for these apts.  in heritage hill home prices (at least what people are asking) have gone up considerably in the last 6 years, some of this is probably being driven by high rental costs. It seems to me that high rental costs are certainly going to stimulate new home building. Until this starts though I don't see any challenge to the high rents as people that want to live in he city have nowhere else to go. Your alternative right now is to tear something down in EGR or outside a historic district in GR (nowhere near as appealing) or renovate the heck out of a crappy multifamily building in heritage hill. When you are considering those as the alternatives to renting, 2000 dollars a month doesn't seem so bad. 

[GRDadof3]

30 minutes ago, jas49503 said:

Many people are willing to pay a steep premium not to have to live in the suburbs. This is probably what is driving the price premiums for these apts.  in heritage hill home prices (at least what people are asking) have gone up considerably in the last 6 years, some of this is probably being driven by high rental costs. It seems to me that high rental costs are certainly going to stimulate new home building. Until this starts though I don't see any challenge to the high rents as people that want to live in he city have nowhere else to go. Your alternative right now is to tear something down in EGR or outside a historic district in GR (nowhere near as appealing) or renovate the heck out of a crappy multifamily building in heritage hill. When you are considering those as the alternatives to renting, 2000 dollars a month doesn't seem so bad. 

When we first moved here 22 years ago, the story was the same. There were a lot fewer apartment choices downtown (mostly Plaza Towers) and units were easily 40% higher than bigger apts in the burbs. The salesperson said "That's the price you pay for living downtown." That was 22 years ago when there wasn't much of anything downtown. The arena was just being built. 

Still, the downtown population has grown to what, 3500 people? The suburban apartment population is probably somewhere around 200,000 (1/5th of the metro). There's still a heavy "price elasticity of demand" for downtown housing. 

[x99]

16 hours ago, GRDadof3 said:

Don't forget too that a home in the "vinyl suburbs", like a lot of urbanites call them, are usually way more energy efficient than an older home in the city. Most new homes are built to such strict energy standards (a whole bunch of new energy codes came out just a few weeks ago) that your average gas and electric bill on a 2400 square foot home is in most cases less than $150/month (if you use the plan where it averages out over a year). I know someone with a 2600 sf old home in the city who has a $600/month gas bill in the winter, just for heat!! That's a BMW car payment. That's a Fat Bike payment! 

Sort of off topic, but maybe not if it explains why people are paying premiums for new construction apartments and condos?  Anyhow, to get gas bills that bad, you have to be downright lazy when it comes to weatherization.  I had the has bills down to about $200 (plus electric to run the furnace blower) for a 3000 square foot place that was 120 years old.  Current house is maybe $400 worst-case, but we're heating an absolutely enormous house with 10'+ ceilings.  And that's on steam heat, so no juice to run a furnace fan.  But we take weatherization seriously with insulation, window rebuilding, and quality storms.  The energy auditor said it tested like it was built in 1995, not more than 100 years before that.  $600 on a 2600sf place just mean you've been inexcusably negligent.  

Anyhow, that's sort of an side.  If the "necessary" downtown amenities arrive that will allow for a true "downtown" experience, I will be far less skeptical about the downtown building boom.  As I see it though, downtown hasn't advanced much on its "livability" metrics since the last boom.  Sure, my commute to work or the isolated event at the Arena is short, but my commute everywhere else is awful.  For this boom to be sustainable over the long term, that need to change.  Lots of chickens, but still no eggs, so to speak (as I've suggested before, leasing Downtown Market to Whole Foods for a $1 a foot would be a GENIUS way to keep this all going in high gear).  

[arcturus]

The typical urban dwelling downtown resident doesn't cook much ... they eat out almost as cheaply as at home.  Just a few food essentials are sufficient for most.  A smaller market would probably be adequate.  A drug store would be nice.  Give me a list of other downtown must-have's.  No mattress stores please.

[GR8scott]

On 2/24/2016 at 6:19 AM, GRDadof3 said:

How would you realign Monroe Street. Sounds interesting but how would you do it?

I didn't realize they were putting the water department building and the development center on the market too. Yowza.

 

 

Well I would hate to see the water building completely torn down, I think the easiest solution is to make Monroe the through street again and have a stop sign or light at Coldbrook. It could also be done by routing the road behind the building and closer to the river which would be more expensive but would be a nice sized buffer for canal park. The important thing is they think about all the potential increase traffic with so many apartments and hotel rooms going in an area sandwiched between the hill and the river with other barriers like 196. Realigning Monroe would be easier access to Leonard/131