GRAND RAPIDS, Mich. (WOOD) — A housing project aimed at helping “missing middle” homebuyers is getting the green light in Grand Rapids.
On Wednesday morning, the Downtown Development Authority approved $100,000 for Dwelling Place, an affordable housing development group, to hire a professional planning firm that would set up a community land trust pilot program.
Dwelling Place CEO Denny Sturtevant called the project an experiment to “move the needle” on the city’s issue with affordable housing for the “missing middle” — people who don’t qualify for low income assistance but are priced out of Grand Rapids’ home ownership market.
“Historically, nationally, these things have worked best in markets where real estate is appreciating. It doesn’t work very well when it’s going the other way. And I think in downtown Grand Rapids, we feel pretty confident — hopefully no more recessions like we had before — but pretty confident this is going to be successful here in the downtown area,” he said during the meeting at Downtown Grand Rapids, Inc.
The plan calls for converting Dwelling Place’s Martineau Apartments on South Division Avenue into 23 condominiums, which would be sold at 60% to 110% of the area median income, according to Sturtevant.
He said the organization would be contributing $1 million in equity to the pilot program to allow each condo to be sold significantly below appraised value. A regional community land trust overseen by a board of homebuyers, Dwelling Place appointees and community representatives would own the land under each condo, eliminating that cost from the home purchase.
“That creates a lot of affordability,” said Sturtevant, adding that such a program is something that has never been done in Grand Rapids.
When buyers are ready to sell their condo, they will get back what they invested in the condo’s value as well as 25% of the appreciation value of the land. The remaining 75% of the appreciation value would go into the trust to lower the cost barrier for future buyers.
Sturtevant told the board that Dwelling Place is working with Huntington Bank and Opportunity Resource Fund, which would identify and refer potential buyers with credit scores at or below 700.
Sturtevant said the plan would not displace anyone currently living in the complex; only when they move out would the space be converted to a condominium managed under the community land trust model.
Grand Rapids Mayor Rosalynn Bliss called the pilot program “long overdue” and Kent County Commissioner Jim Talen said the program is innovative and “hits the bull’s-eye” for affordable housing.
“I think it’s a really cool project,” Talen added.
Sturtevant said the community land trust model started on the East Coast, has been around for many years and is successful in other communities.
The timeline calls for four months of renovations to Martineau, starting in April. If all goes well, the first community land trust condo buyers would move into their renovated condos buy September.
If the pilot program succeeds, Dwelling Place would expand the model to two other rental properties it owns on the city’s southwest side: New Hope Homes and Grandville Homes.
Sturtevant said he wants to tap the Inner City Christian Federation’s home ownership training program to support new owners taking part in the pilot program.