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The Young Will Buy Homes Downtown
GRAND RAPIDS — The housing market study ordered from Zimmerman/Volk Associates Inc. by the Downtown Development Authority reported that the district could reasonably support 355 new housing units annually for each of the next five years.
Young singles, younger couples and empty nesters make up almost all of the potential market for those units. Another possible, but not as likely, market source is nontraditional families, especially those headed by minorities.
All are cited in the study as potential buyers and renters.
Although the study reported that rental units would create the critical residential mass that downtown needs faster than sale units would, 143, or about 40 percent, of the yearly 355-unit potential should be listed for sale.
The report said young singles and younger couples should account for 52 percent of the buyers’ market. Retirees should make up 36 percent of that market, with nontraditional families filling in the final 12 percent.
The annual income of these groups should range from at least $40,000 to $150,000. An income of $40,000 a year should qualify for a mortgage worth $100,000, while an annual take of $150,000 should be high enough to get a $400,000 mortgage.
The report went on to say that roughly two-thirds of the for-sale market should consist of loft apartments or condominiums, with the remaining third as rowhouses. The price mix has 54 percent of the rowhouses between $250,000-$300,000 and 51 percent of the condos from $100,000 to $200,000. (See related chart.)
In the spring, when Zimmerman/Volk did the study, the New Jersey-based consultant found there was “limited development of for-sale housing under construction” in the DDA district. But of that limited development, the firm said condo prices ranged from a low of $130,000 to more than $600,000 for a new loft unit.
As for the potential rental market, the study said young singles and couples would comprise 66 percent of it. Empty nesters are next at 24 percent, while non-traditional families make up 10 percent of the market.
Laurie Volk, a principal with Zimmerman-Volk, told DDA members in June that for the district to succeed in reaching a critical housing mass, the city has to convert downtown into one big neighborhood. She said that could be accomplished by using an appropriate urban design throughout the district.
“People that want to live in a city don’t want to live in a suburban setting,” said Volk.
The DDA paid $12,000 for the housing study. DDA Executive Director Jay Fowler said he would be meeting with developers in September to get their take on the report’s findings and recommendations.