(As seen on WZZM TV 13) More than 175 residential properties are set to return to local ownership and geared toward lower-income families.
The Inner City Christian Federation (ICCF) announced a deal late last month that the nonprofit is buying 177 properties representing 213 living units in the greater Grand Rapids and Lansing areas from Chicago-based investment firm Residential Dynamics Group.
ICCF CEO Ryan VerWys declined to talk about the specific details of the deal until it closes. He also declined to put a time frame on the closure of the deal.
Aside from being intentional with keeping the properties available as affordable homes and partnering with other organizations to make the goal feasible, VerWys said it is too early to tell what might happen with the properties.
The entire portfolio has 213 housing units, with 153 in Grand Rapids and Wyoming and 60 in Lansing and Eaton Rapids. Of the 177 properties, there are 151 single-family homes, 22 duplexes, and four multi-family buildings, including an eight-unit building.
The homes in Grand Rapids are spread throughout the four quadrants of the city and northern neighborhoods of Wyoming, “predominantly in those areas traditionally considered to be the area’s most affordable neighborhoods.”
Since the recovery of the Great Recession, West Michigan’s housing market has been on a tear, which has resulted in homes rising well above the pricing peak prior to the recession. The median home price in the Grand Rapids-Wyoming area is 22.78 percent above the pre-recession peak, according to HSH.com, a mortgage information website.
“We’ve seen property prices go up so dramatically the last six years, those values have gone up so quickly, it so far outpaces the incomes,” VerWys said. “There’s a bit of a challenge, as we want to be a community as a place (where) all walks of life can have a home and way of life.”
The rising prices put more pressure on families and a lack of access to affordable homes can create chaos, said BriAnne McKee, Habitat for Humanity of Kent County’s executive director.
“Without affordable housing options, low-income families are forced to make impossible decisions about how to stretch their limited resources,” McKee said. “This may mean going without healthy food or living in an unsafe home because it’s the only place they can afford. Without an intentional investment in affordable housing, the community must understand there will be an increased need for social services.”
Habitat for Humanity has partnered with ICCF on several projects, and McKee said collaborative partnerships and creative solutions will be the best way to meet the housing needs of the community.
Despite the portfolio’s mix of homes in the Lansing area, VerWys said the primary focus will be on the properties in Grand Rapids and Wyoming.
“West Michigan is thriving in so many ways, but our supercharged housing market is driving up prices and rents at alarming rates,” VerWys said. “These dramatic increases are creating a housing crisis for those of us living on the margins.”
The lack of affordable homes is not an issue unique to Grand Rapids, McKee said, but some communities like West Michigan are suffering more than others because of how quickly the housing market is growing. She said one in three families in the United States is paying more than 30 percent of its income on housing costs, which equates to unaffordable, and one in six families is paying more than 50 percent.
The U.S. Census Bureau has reported homeownership rates are at their lowest levels in decades.
All of those stats are compounded by the rapid real estate growth in Grand Rapids, McKee said.
“While strong markets are generally good for a city, there can be unanticipated consequences when a market grows rapidly and we are not intentionally focused on how it affects people who are materially poor,” she said. “That’s why it’s important that we keep front of mind the vitally important role that stable housing plays in creating a strong community for everyone.
“Partnering with families to make homeownership accessible in strong, vibrant neighborhoods is good for all of Grand Rapids — both economically and socially.”
Adding 177 homes to the ICCF portfolio is a large, one-time investment for the organization, which currently owns and operates 168 units geared toward tenants with lower incomes. In the organization’s 44 years, ICCF has produced more than 500 “owner occupied” homes. ICCF has multiple developments in the works as well, including 64 units as part of Rockford Construction’s mixed-use development on Seward Avenue and Bridge Street NW.
Keeping the homes in local ownership will help ensure neighborhoods will remain a mix of varied incomes, ethnicities, education levels and family types and sizes, VerWys said.
“This is no doubt a significant jump for us,” VerWys said. “A time like this is an opportunity to bring these properties back to local ownership.”