Parks said he and Morgan assessed the immediate vicinity of the McConnell and found “lots” of affordable housing, but not much at market price.
There are competing resorts nearby, but little evidence that they have trouble renting. Klingman Lofts, another market-rate building, is on the same block as the McConnell site, and north of Wealthy Street are the market-rate buildings Loose Leaf Lofts, Metropolitan Park Apartments, and The Globe. Klingman and Loose Leaf Lofts are fully leased, and the other two have very few openings.
And there’s more on the way: Olsen Loeks Development broke ground on the $62 million second phase of Studio Park in August, about half a mile from The McConnell site. It includes a 16-story tower with 165 market-rate units that are expected to come online in 2024.
Data from CoStar shows that existing apartments at market price in downtown Grand Rapids – of which there are about 9,566 units – were 97.1% occupied in the third quarter of 2022, with only 255 additional units under construction. .
“One of the goals (of the city) is to create housing for all levels, and so having the market rate (McConnell project) in this area should bring a lot of vibrancy to the neighborhood,” Parks said.
Ryan VerWys, CEO of nonprofit housing developer ICCF Community Homes, agreed there were plenty of affordable units nearby, but said many more were needed.
Among them is Dwelling Place Grand Rapids, which has several public housing buildings in the 300 block of South Division Avenue, north of The McConnell. And south of the McConnell, in blocks 800 and 900 of the South Division, are apartments subsidized by the Grand Rapids Housing Commission. Other projects, such as the development of a low-income housing tax credit by the nonprofit United Methodist Community House, are underway. And ICCF has three developments near Wealthy and Division that are either completed or underway, representing approximately 100 mixed-income housing units.
Still, VerWys is reluctant to say there is “enough” affordable housing in the city.
“There is clearly a need for more affordable units,” he said. “But I think we’re still in favor of building communities that have a variety of housing types for people of varying incomes. Anytime you get one or the other exclusively, that’s usually a sign that there is a lack of health. … That is why we try to build mixed housing wherever we can.”
Jason Wheeler, vice president of marketing at real estate developer Wheeler Development Group (WDG), called affordable housing in Grand Rapids a “sensitive” topic right now, but said the city is suffering from a housing shortage in all prices.
WDG owns about 200 market-priced units in the city center – which it defines as rents ranging from $1,000 to $2,600 per month – and they are 100% leased. Based on his experience with WDG downtown, he expects a development like The McConnell to be fully let within six months to a year.
In recent years, WDG has seen an influx of residents come to downtown Grand Rapids from Lansing, central Michigan, Ann Arbor, Detroit, Chicago and other parts of western Michigan. . With people at different income levels migrating to the city, there is a need to diversify rental prices.
“If we don’t have a balanced range of housing in downtown Grand Rapids, the population suffers anyway,” he said. “If you can’t attract those looking for market-priced housing to the city, they’ll go elsewhere. And if you can’t provide affordable housing for those who live in those neighborhoods that could potentially be threatened by gentrification…you going to have exoduses of people no matter what.