Metropolis, Grand Rapids Community Foundation partner to grow housing fund
GRAND RAPIDS – The City of Grand Rapids is working with the Grand Rapids Community Foundation on a year-long process to create a fund to increase the amount of affordable housing.
The city’s Great Housing Strategies initiative first recommended the establishment of a dedicated housing fund in 2015. The Grand Rapids Housing Commission helped move the fund forward in 2018, but the project’s momentum slowed when the former Kent County’s land banking authority dissolved.
About $ 900,000 is in the real estate fund today, but a planned policy change soon being considered by the Grand Rapids City Commission could help bring the balance up to at least $ 20 million by 2025.
“We are ready to go in a slightly different direction – still with the Housing Fund and participation in the Housing Commission, but in a different way,” said Eric DeLong, Deputy City Administrator for Grand Rapids.
The city commission is expected to vote on a new operational policy for the Grand Rapids Housing Fund in June and set up a new body to make spending decisions. The Grand Rapids Community Foundation is acting as the trustee of the fund.
“Essentially, the city would invest those dollars in the Community Foundation, which would then be the steward and try to make as much money as possible through portfolio management in order to earn additional interest that could be spent within the community, and that would be she’s also the steward long term, ”said Ryan Kilpatrick, executive director of Housing Next, who works with local governments, developers and nonprofits to break down housing barriers.
There are plans to create a non-endowed fund that will give the city access to the fund at a higher level than an endowed fund, said Marilyn Zack, vice president of the Grand Rapids Community Foundation for development. Other funds have been set up at the Community Foundation for the good of the city, but this will be the first relationship the nonprofit has with the city as a fund owner, Zack said.
“Our job is to easily manage these dollars, maintain them and make sure they are performing at their best,” said Zack. “We will not inform the decisions about the granting of grants.”
Kilpatrick said significant spending could be made in a few years – up to a quarter or a third of the fund – based on the city’s significant housing needs. Far less spending could be made in other years.
According to Housing Next’s latest housing needs assessment for the city, around 5,340 rental units at any price will need to be added to Grand Rapids’ housing portfolio by 2025 to keep up with demand. In combination with owner-occupied residential units, a total of around 9,000 additional residential units will be required over the next five years.
To meet this demand, the study says it will need to invest more than $ 1 billion in rental housing and about $ 250 million in gap funding.
“We have a big goal ahead of us,” said Kilpatrick. “$ 20 million is our first start, that’s our down payment. We want to seek additional state and federal funding to provide housing and stability. “
Given these funding differences, the Housing Fund Board needs to prioritize funding to serve most of the households in greatest need while recognizing that current funding can’t solve everything, Kilpatrick said.
Now roughly half of the tenants in Grand Rapids are burdened with costs – that is, they spend more than 30 percent of their income on housing – and just over 30 percent of tenants in the city spend more than half of their income on housing , after assessing the housing needs.
According to the Housing Needs Assessment, overall homeowners face far fewer costs than tenants in Grand Rapids. The number of homeowners who spend more than 30 percent of their income on housing is 19 percent, and the number of homeowners who spend more than half their income on housing costs is 7 percent.
The number of cost-burdened black households far exceeds white households, which must be a priority when using the housing fund, especially in deprived neighborhoods, Kilpatrick said.
“We want to get more people involved in this process of growing housing and wealth creation across the city,” said Kilpatrick.
The proposed 11-person Board of Directors of the Housing Fund would assist in this decision-making. Three members are appointed from each parish in the city, one member is appointed by the mayor, and five members are appointed from the parish. The City Administrator and Executive Director of the Housing Commission would also have a seat on the board.
“I hope we will bring in some major lenders from our community to discuss the homeownership barriers, both on the cost side of wages and down payments,” said Kilpatrick.
Neighboring communities in West Michigan are also working to address the lack of affordable housing, but Kilpatrick said he doesn’t know of any other city or town
Creation of your own housing fund.
DeLong noted that residential investment decisions are being submitted to the city commission for consideration. The aim is to acquire and maintain real estate, give loans to qualified and experienced nonprofit housing associations prior to development, fund gap funding for housing projects, and pay city fees for things like water and sewer connections for housing projects.
In the meantime, a new fund board would create “a lot more independence” and fundraising opportunities, Mayor Rosalynn Bliss said when the real estate fund’s plans were presented at a recent city commission meeting.
“This opens up the possibility of bigger investments for us,” said Bliss.