Economic Development and Real Estate

Outbreak of residential projects supports changing lifestyle

One of the developers feels the days of suburbia are fading away.

September 27, 2013
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Outbreak of residential projects supports changing lifestyle
Shayne Malone, principal of Cherry Street Apartments LLC, is among the many developers turning to residential projects in the city. Cherry Street will be renovating two vacant buildings in the East Hills neighborhood into 18 apartments. Photo by Jim Gebben

Call it a rash or a flurry. Or maybe it’s simply filling a pent-up demand in the market after years of inactivity during the Great Recession.

Whatever the reason — and there are likely a dozen, developers have come forward over the past few months with a slew of residential projects, large and small, for downtown and its nearby neighborhoods.

At just one meeting in July, Grand Rapids city commissioners heard proposals for 247 new apartments. There haven’t been that many rental units proposed for the city in a year’s worth of commission meetings. So what gives?

Shayne Malone is one of those developers. He is a principal in Cherry Street Apartments LLC, a firm that is getting ready to renovate two vacant buildings in the East Hills neighborhood into 18 market-rate apartments. One is on Cherry Street, while the other is nearby on Eastern Avenue.

Although Malone has invested in real estate for some time, has worked for Colliers International of West Michigan and Grand Bank, and is a licensed builder and realtor, he only stepped into the spotlight earlier this year with his southeast side proposal, which the city has embraced with open arms.

The Business Journal asked Malone, a fresh voice in the field, why he thought so many projects have been proposed in such a short timeframe. In a nutshell, he felt the demographic movement away from suburbia, which has been simmering for quite some time, finally has taken hold.

“My take on it is (that), as a country, we’re rediscovering cities. I think cities have always had a strong economic value and we’ve lost touch with that over the last 30 or 40 years. What I think is really driving it is the younger generations are looking for places where they feel more connected, and cities provide that,” he said. “Connectedness is the nature of living in a city: its walk-ability and not being car dependent.”

His comment about young people not wanting to be car dependent has been validated by independent research efforts. Two University of Michigan researchers, Michael Sivak and Brandon Schoettle, found that the percentage of 19-year-olds with a driver’s license has steadily fallen over the past 30 years to a new low. Using data from the Federal Highway Administration and the U.S. Census Bureau, they found that, in 1983, 87.3 percent of 19-year-olds had licenses. That number fell to 75.5 percent in 2008 and to 69.5 percent in 2010.

Sivak and Schoettle then conducted a survey for the university’s Transportation Research Institute to determine why those between the ages of 18 and 39 hadn’t applied for licenses, and the reasons were interesting. The top six were: They had been too busy and didn’t have the time; owning and maintaining a vehicle is too expensive; they were able to get transportation from others; they preferred to bike or walk; they used public transportation; and they were able to communicate with others virtually.

Finally, 22 percent of the 618 respondents surveyed told Sivak and Schoettle they never plan to get a driver’s license. “On the other hand, 69 percent expect to get a driver’s license within the next five years,” said Sivak.

Malone said those findings play into his idea of what is happening.

“I think that people can connect in different ways now. And I think by living in a neighborhood, people can identify with that and it becomes a part of who they are. And I think it tends to attract businesses that are local and little bit more creative with less of a franchise focus,” he said.

Malone is finalizing his renovation plans for 822 Cherry St. SE and 220 Eastern Ave. SE and is spending about $860,000 to revitalize the buildings. He felt his choice of East Hills was the right one because it has the attributes he thinks young people are looking for in a place to live.

“I think the East Hills neighborhood is unique because it was built for streetcars 100 years ago, so it’s already positioned to accommodate that. And these kind of urban infill and adaptive reuse projects just kind of build on the infrastructure that is already there,” he said.

“I feel the demand has been coming for quite some time. You’ve seen that across the country. New York, San Francisco and Chicago are where young people flock,” he added.

“Even after they have families, people want to live in cities because they want to be in places that are built on a human scale and more accommodating to everyday life. I think this East Hills neighborhood and parts of Grand Rapids certainly appeal to that demand.”

This movement marks a return to where the city was before the highways dissected it in the middle. Back then, stores, theaters, restaurants and taverns all were in walking distance until the highways created the suburbs.

So is urban living coming full circle and is suburbia on its way out?

“That’s my take on it,” he said.

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