Some Miscellaneous Housing Data From The Zoning Reform FAQ
In response to the currently proposed zoning reforms the city has assembled 👉an extensive FAQ👈; I used data from that document as the basis for the 👉"The Myth Of The Out-Of-State Housing Hoover"👈 post. That post lays out the data making it clear that the phenomenon of out-of-state developers collecting housing en masse has not happened here. Beyond laying that NIMBY trope to rest this document contains some particularly interesting nuggets which are worth calling out.
Under Michigan's regressive tax regime the Principal Residence Exemption (PRE) discounts the property tax paid if the owner lives on the property. In a Single Family Unit inhabited by its owner the PRE is 100%, but it can be less (fraction), if some part of the property is leased, or otherwise not residential.
Of the 5,855 residentially classed properties that have 2-4 units, there are 1,106 that claim a Principal Residence Exemption greater than 0%, which is 18.9%.
18.9%! This means that of the small rental properties in the city almost one (1) in (5) are inhabited by the owner. Owning, and living in, a multi-family home is one of the ultimate housing hacks, and it is encouraging to see that it is this common. I would not have guessed the number was that high. Purchasing and then renting is a path to enter ownership, and one I used myself after purchasing my, then ramshackled, home. Even a hundred dollars a month from a rented bedroom helped keep the roof on.
Since 2013, the City Planning Commission has considered approximately 1,100 cases. Of those cases, 87 cases included support for a parking waiver that resulted in 2,944 spaces being waived using the standards of the City’s Zoning Ordinance.
It is disappointing that all those meetings, and all that bureaucratic hoopla, and the total impact on parking was -2,944 spaces. The impact of the all the parking waivers has been -6.5 parking spaces per square mile per year. What are doing? 🙄
Relative to equity, what impacts should we expect if these amendments are adopted? Who stands to financially benefit? Who may be harmed?
There is significant empirical evidence to demonstrate that exclusionary zoning (local regulations that limit who is able to live in which neighborhoods based on their income) places artificial constraints on supply, exacerbates residential racial segregation, and contributes to rising housing costs. As described in detail in the 2020 publication, The Color of Law, modern single-family only zoning has perpetuated racial segregation and undermines housing equity. The City of Grand Rapids eliminated exclusive single-family zone districts in 2008.
This is perhaps the first time I have seen the city recognize, in a document, the implication of zoning with structural racism.
But, I call BS that the City of Grand Rapids eliminated single-family zoning in 2008. I'm am genuinely surprised to read the city still claiming this as their bluff has been called out multiple times. The City of Grand Rapids has single-family zoning today, as I write this. Allowing duplexes or ADUs by Special Land Use (SLU) was not an elimination of single-family zoning. The current ordinance's response to "can I build something other than a single family unit?" is ... "well, maybe". Calling that the elimination of a practice implicated in structural racism is gross. Single-family zoning has been eliminated when the answer to that questions is: "Yes."
The economic development team is currently working with Housing Next and Cinnaire to create an equitable development initiative that is designed to provide training, mentorship, and access to capital to small scale and emerging developers
Hopefully that process moves along more rapidly than it took the city to get to this point.
Will these changes have a disproportionate impact to a historic district?
The average sale price of a home in Heritage Hill is currently $650,000 with several homes selling for well over $1 million. This means that the cost of acquisition is much higher than comparable neighborhoods nearby. Existing homes just two blocks away still sell for $200,000 to $250,000.
The average sales price for a home in Heritage Hill is $650K! As a resident of Highland Park, which is near Heritage Hill, I've heard from those moving into the neighborhood that they wanted to purchase in Heritage Hill, but Highland Park is as near as they could afford. I don't take that as a dig, I've assumed there was a significant price difference, I did not realize it was 3X+. This does mean I will chuckle louder when someone in Heritage Hill wrings their hands about "gentrification" [as that process, at those prices, is complete].
The city, in its response to this question, does not mention that new construction, infill or otherwise, would be subject to review by the Historic Commission. Changing zoning does not change that. Review by the Historic Commission is a significant disincentive to invest there, when a less onerous process is only a few blocks away.
Do we have any indication that our current rule of 4 results in tenant abuse?
...From 2019 through 2023 (five years) Code Compliance received 171 overcrowding complaints, of which 21 (12%) resulted in fees.
One (1) in ten (10) such complaints were substantiated. Hmmm.
There currently are 141 residential properties on the blight list and 21 open enforcement cases for commercial properties that are being reviewed for transition to the Blight Monitoring Program.
141 is low. With ~57,000 residential properties, assuming no large apartment buildings are blighted/vacant, that's 0.2% of residential properties. A common NIMBY argument about housing is that there are blighted or vacant properties all over the city, and "what about those?". Well, bring them all back to use and . . . meh, it's basically nothing.