Grand Rapids to give tax exemptions for 6 affordable, low-income housing developments

UPDATE: The Grand Rapids City Commission approved the tax exemptions. GRAND RAPIDS, MI — Grand Rapids elected leaders have given initial approval on tax exemptions for six proposed affordable and low-income housing developments in the city. If all six projects are completed as planned, they would bring 299 apartment units […]

UPDATE: The Grand Rapids City Commission approved the tax exemptions.

GRAND RAPIDS, MI — Grand Rapids elected leaders have given initial approval on tax exemptions for six proposed affordable and low-income housing developments in the city.

If all six projects are completed as planned, they would bring 299 apartment units to the city, of which 78 units are anticipated to be permanent supportive housing serving people with disabilities or chronically homeless.

The tax exemptions, called “payment in lieu of taxes,” were given initial approval Tuesday morning, Jan. 12, by city commissioners at their Fiscal Committee meeting. Final approval of the exemptions is expected to happen at the commission’s 7 p.m. meeting Tuesday via a sweeping consent agenda vote.

The exemptions are conditional on the projects being approved for low-income housing tax credits through the state and securing the financing needed to move forward on development, Connie Bohatch, the city’s managing director of community services, told commissioners Tuesday.

“While it looks like a whole lot today, it may take some time for those to actually be successful and actually come to fruition,” Bohatch said.

Tentative completion dates for all six apartment projects were not given.

Bohatch told commissioners that six additional affordable housing developments seeking tax exemptions will likely come before them at their next meeting.

The proposed projects, if completed, would help provide much needed housing stock in the city. A Grand Rapids-commissioned housing study released in summer 2020 found the city needs an additional 5,340 rental units and 3,548 for-sale units by 2025 to meet demand and ensure low-income residents aren’t displaced.

Developers approved for the city’s “payment in lieu of taxes” program pay a percentage of all rents collected each year to the city instead of paying property taxes.

Developers can choose either to pay 4% of annual rents collected to the city or 1% to the city and another 2% to the city’s affordable housing fund, which is used for investments in affordable housing incentives and initiatives. All developers given initial approval Tuesday chose the second option.

The only housing developments eligible for the tax exemption are ones that are financed with federal or state housing aid; that serve low-income families, the elderly or those with disabilities; and that are owned by a qualifying nonprofit or association.

Here are the six projects given initial approval Tuesday for the tax exemptions. All information on the projects was provided by city staff.

Bradley Commons

The developer, Woda Cooper Companies, plans to build a 54-unit, four-story building at 3555 Lake Eastbrook Boulevard SE, the site of a former furniture store near the Shops at CenterPoint.

Of the 54 units, 19 are anticipated to be permanent supportive housing serving people who are chronically homeless and another nine, one-bedroom units will serve very low- and low-income adults with disabilities.

The remaining units will be available to households with income at or below 80% of the area median income, which in Kent County is an income of up to $44,960 for one person and up to $51,360 for two people, according to the Michigan State Housing Development Authority.

One bedroom units are priced between $594 and $1,029 a month; two bedrooms between $715 and $1,255; and three bedrooms at $1,459.

The estimated project cost is $13,797,502, and about $10,490,951 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $4,799 to the city and another $9,597 to the city’s housing fund. Without the exemption, the development would generate about $87,798 in property taxes annually.

Breton Grove

The developer, Woda Cooper Companies, plans to build a 52-unit, four-story building at 2400 43rd St. SE.

Of the 52 units, 19 are anticipated to be permanent supportive housing serving people who are experiencing homelessness or have a disability.

The remaining units will be available to households with income at or below 80% of the area median income.

One bedroom units are priced between $590 and $925 a month; two bedrooms between $709 and $1,084; and three bedrooms between $823 and $1,425.

The estimated project cost is $14,933,398, and about $11,961,304 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $4,478 to the city and another $8,956 to the city’s housing fund. Without the exemption, the development would generate about $79,079 in property taxes annually.

Stockbridge Landing

The developer, Woda Cooper Companies, plans to build two, four-story buildings at 585 and 601 Stocking Ave. NW with a total of 58 units. The development will see the demolition of the Arsulowicz Brothers Mortuary building.

Of the 58 units, 21 are anticipated to be permanent supportive housing serving people who are chronically homeless and another nine, one-bedroom units will serve very low- and low-income adults with disabilities.

The remaining units will be available to households with income at or below 80% of the area median income.

One bedroom units are priced between $600 and $980 a month; two bedrooms between $719 and $1,209; and three bedrooms between $818 and $1,403.

The estimated project cost is $16,493,841, and about $13,048,695 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $5,279 to the city and another $10,559 to the city’s housing fund. Without the exemption, the development would generate about $93,310 in property taxes annually.

Read more: Developer proposes $16.7M mixed-income housing development in Grand Rapids

Boston Square Together I

The developer, a joint venture between Brinshore Development and Amplify GR, plans to build a three- and four-story structure at 1480 Kalamazoo Ave. SE with 45 units and 8,350 square feet of commercial space on the ground floor.

The project is part of a larger initiative to redevelop a portion of the Boston Square neighborhood.

Of the 45 units, 36 will be available to households at or below 60% of the area median income, which is up to $33,720 for one person and up to $38,520 for two people, according to the Michigan State Housing Development Authority. The remaining nine units will be market rate.

For the affordable units: one bedroom units are priced between $421 and $841 a month; two bedrooms between $506 and $1,011; and three bedrooms between $585 and $1,170.

Market rate units are priced at $1,000 for a one bedroom, $1,150 for two and $1,325 for three.

The estimated project cost is $15,909,773, and about $11,023,898 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $9,046 to the city and another $4,721 to the city’s housing fund. Without the exemption, the development would generate about $22,215 in property taxes annually.

Leonard Apartments

The developer, Genesis Nonprofit Housing Corporation, plans to repurpose a former funeral home and its parking lot to create a 38-unit apartment building.

Of the 38 units, 19 are anticipated to be permanent supportive housing serving people with special needs who have income at or below 30% of the area median income, which is up to $16,860 for one person and $19,260 for two.

The remaining 19 units will be available to those earning between 40% and 60% of the area median income, which is between $22,480 and $33,720 for one person and between $25,680 and $38,520 for two.

One bedroom units are priced between $595 and $825 a month and two bedrooms between $890 and $1,000.

The estimated project cost is $12,700,053, and about $10,530,229 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $2,966 to the city and another $5,933 to the city’s housing fund. Without the exemption, the development would generate about $35,172 in property taxes annually.

Read more: Affordable housing development planned for Grand Rapids’ Northwest Side

Union Suites

The developer, Union Suites and Dwelling Place of Grand Rapids, plan to build a three-story, courtyard-style apartment building with 52 units.

All units will be available to people at or below 80% of the area median income.

One bedroom units are priced between $444 and $1,179 a month; two bedrooms between $537 and $1,379; and three bedrooms at $1,242.

The estimated project cost is $13,167,928, and about $9,786,521 is being sought in low-income housing tax credits from the state.

Annually, the development’s payment in lieu of taxes will generate about $4,281 to the city and another $8,563 to the city’s housing fund. Without the exemption, the development would generate about $72,390 in property taxes annually.

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