Smart city? The downtown development boom, examined

This article is the second of a two-part series about downtown's recent boom in residential development. You can read part I to see the numbers behind the story.

Cranes working on Arena Place tower over a nearby parking lot

“Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.” - Jane Jacobs, The Death and Life of Great American Cities

Earlier this month, we provided you with the staggering numbers: the 1800 rental units in the downtown Grand Rapids area are set to nearly double in the next couple of years, with total units projected to total close to 3000, if all of the projects in the development pipeline come to fruition. Those numbers didn't include projects announced since that article ran, in Monroe North and on the West Side of downtown.

As downtown's stock of old, vacant or underused buildings continues to get bought up and redeveloped, residential developers have turned their attention to new construction primarily on surface parking lots, a term that planners call "infill." This marks an important turning point for Grand Rapids: whereas many Great Lakes basin cities still have a slew of downtown area buildings that sit unused and continue to decay, GR's collection can basically be counted on one hand: the Keeler Building, the old Rowe Hotel, the Sligh Furniture Factory on Ellsworth South of Wealthy, and a smattering of small buildings in Heartside. 

So there's no doubt that a residential development boom is happening in our city. But what do all the numbers really mean?

Density creates vibrancy

Many of the individuals who are responsible for the planning and "city building" of downtown Grand Rapids are big fans of planning icons such as Jane Jacobs, Lewis Mumford, and Patrick Geddes. The basic tenet of most modern city planners is that adding increased density to a city, by packing in vertical residential, office and institutional projects, creates a vibrant city at the street level. In their opinions, increased vibrancy reduces crime (i.e. by adding "eyes on the street"), spurs commerce and makes a city more walkable and non-car-oriented. The enhanced qualify of life that comes from increased vibrancy feeds on itself, drawing even more residents, until it hits a point called "critical mass."

"To reach the critical mass needed to support the types of neighborhood uses the community is asking for, we need more people – and different kinds of people – that need different things. The greater the aggregate needs, the greater the demand," says Kris Larson, CEO of the recently formed Downtown Grand Rapids Inc. (the merging of the DDA, the Downtown Alliance and the Downtown Improvement District).

"This isn’t a chicken and egg scenario," says Larson. "Greater demand enables the sustainability of expanding supply – such as opening a new business – which then expands the local provision of a more diverse set of amenities and experiences. The more people we have, the more businesses and experiences that can be supported. The more people seeking out these businesses and experiences, the more vibrancy we experience."

"Achieving critical mass - which for our downtown means building another 3,500 residential units (inclusive of what is going up today) - enables a tipping point for economic sustainability of types of urban amenities that the community wants," Larson concludes.

Residential developer 616 Development, one company leading the recent charge of projects since the recession ended, also believes in critical mass -- and even encourages and supports other developers to do the same, particularly to spur downtown commerce. "We believe everything follows people so as we grow, retail follows," explains Derek Coppess, founder of 616 Development.



Who's moving in?

Whenever the subject of residential development comes up in local news article, there is a chorus of people who ask, "Who is renting all of these apartments? How do they afford those rents?"

According to local developers, the majority of apartments are being snatched up by young, unmarried professionals and empty nesters, a trend that started about 20 years ago and continues today. Most are seeking a lifestyle that gives them easy access to parks, restaurants, entertainment, art and culture within an easy walking distance.

The average rental rate of a lot of the new apartments hovers around $1600 - $1800 a month, about the same as a mortgage on a $300,000 home at current rates, and about 30 percent higher than the national median home price for a single family home. The primary difference is that the aforementioned apartment is about 1000 square feet, or about half the size of the median sized home. Many studies done recently, however, suggest that Millennials, especially, want smaller domiciles than their parents had.

According to John Wheeler of Orion Construction, they expect absorption of the apartments in their newest project, Arena Place, to be approximately six to nine months, with current market conditions holding steady.

As jobs and population continue to grow in the Grand Rapids area, making it one of the fastest-rebounding post-recession economies in the country, the demand for housing seems to be unabated in the near future.

Who's moving out?

A building on the verge of collapse is demolished on South Division Ave

Whenever an urban area experiences a sudden growth spurt, inevitably the subject of gentrification arises. Though many people use the "g" word when talking about all redevelopment in general, the true origin of the word refers to low-income populations being displaced as new, higher-income populations move in -- not necessarily the end result of every redevelopment project. In some cases, redevelopment projects occur in historically industrial areas, where there were no low-income households to begin with. Or a redevelopment project is proposed for an area that is block after block of vacant properties, with displacement dating back to the urban renewal and superhighway building era of the 1960s. Does gentrification take place if there have been no inhabitants in an area for 50 years?

In Grand Rapids' case, the current mix of new residential projects is holding steady at about half market-rate and half income-restricted. The area consistently gets ranked as one of the most affordable housing markets in the country. But that hasn't stopped calls for increasing the amount of affordable housing in Grand Rapids, as the number of applicants for Section 8 housing, for instance, far outstrips the supply.

In some areas of downtown such as the Heartside District, which has seen the largest influx of new projects, longtime residents say that artists and homeless people who have occupied the area for several decades are now beginning to feel the push to move elsewhere. Many of the homeless missions in the South Division corridor have been approached by developers to sell, but all have decided to stay in the area for now.

With the city beginning to divest in large surface parking lots south of the Van Andel Arena over the next five to 10 years, the possibilities of gentrification are expected to increase. Organizations such as the Grand Rapids Housing Commission and the Grand Rapids Community Foundation are keeping a close eye on the situation, and are working to keep the balance at the forefront of city building discussions.

Where will people park?

One of many large parking lots on the city's West Side

Some of the loudest local cries recently have come on the heels of parking displacement due to development projects. In one case, a downtown business has decided to move its 300 employees out to the suburbs because (in their words) downtown parking has become too expensive and too inaccessible. The majority of their employees used a surface parking lot that has been torn up for the new Arena Place project. Despite the fact that the new project will include its own parking ramp, it is expected to be at a higher usage rate due to the higher costs of constructing ramp spaces.

The city of Grand Rapids' zoning currently requires that developers provide a certain number of onsite parking spaces on new projects. This was put in place to provide relief to neighboring businesses and residents, so that on-street parking spaces were not gobbled up by new residents. But even this seemingly common sense provision has created division in some parts of the community, with one side calling for zero parking requirements, and the other side calling for the city and developers to provide more parking. The city has responded by hiring a parking consultant to fine tune the city's inventory, pricing and expansion plans for the next five to 10 years.

Grand Rapids isn't alone in this struggle; even in progressive "model" communities like Portland, residents of several downtown areas have called for building moratoriums because congestion has gotten too great due to poor planning. Does increased vibrancy lead to too much of a good thing? Proponents of fewer parking spaces point to an increased need to change lifestyles and behavior.

"As more people move to the downtown and near neighborhoods it encourages urbanistic thinking in regards to expanded public transportation options," explains Derek Coppess of 616 Development. "More residential development doesn’t mean that we need more parking, it means that we need to educate ourselves and others about other options available. We believe that quality of life is improved through easier access to public transportation and retail options within walking and biking distance."

As downtown and the near neighborhoods continue to burst at the seams, The Rapid is working to keep up with this growth and even get out ahead of it. The area's first bus rapid transit (BRT) system opened in August to serve the downtown and South Division corridor, and plans are in the works to add the next leg of BRT traveling between downtown GR and Allendale - the Grand Valley State University corridor, called the Laker Line.

There was also a lot of support in a recent Rapid Growth poll to continue investigating a downtown streecar, which would connect the far northern and southern ends of downtown. But calls for expanded transit service continue to grow.

Growing pains

A mural from the inaugural ArtPrize on the side of the Grand Rapids Community Foundation

The only way to describe all of these issues would be to characterize them as growing pains. Grand Rapids has now joined a class of rapidly-growing cities around the country, all of which are grappling with similar issues. How does a city accommodate the wants and needs of residents, businesses, and stakeholders while simultaneously taking care not to trample the impoverished and less fortunate in the community? How does a city balance land use policy with quality of life? How do we "city-build" in an inclusive manner, involving all walks of life in the process?

Grand Rapids has the advantage and reputation of being a collaborative city. A growing chorus in Grand Rapids believes that the key to continuing this is to provide open, transparent and inclusive input from as many residents as possible.

Get involved in the discussion

For additional discussions around the topic of growth and its ramifications, we recommend checking out the following:

The Grand Rapids Community Foundation's next "Knotty Cocktails" on November 18th at 5PM focuses on Inclusive Growth, headed by discussion leader Paul Doyle of Inclusive Performance Strategies. Space is limited so RSVP today.

Downtown Grand Rapids Inc. has opened a pop-up shop in the ground floor of the Trade Center Building at 50 Louis for the GRForward initiative. See their website for a listing of open house hours and upcoming events.

The local citizen-reporter publication The Rapidian has regular topics and conversations on the subject of gentrification. Check out what is being talked about on the neighborhood level.

Jeff Hill is the publisher of Rapid Growth Media.

Photos by Jeff Hill