Tag: housing projects

The LIHTC Will Bring Balance to the Force in Real Estate for Grand Rapids, MI

In real estate there’s a tension between two categories of homes:  Market-Rate and Affordable Housing. It’s almost another way to say The-Haves and The-Have-Nots…or more accurately the Haves and the Hardly-Haves.

Yoda’s job was the train the one that would save the world from a great imbalance.  The federal government here acts as Yoda, training or giving money, to the States in order to prevent great imbalance in the housed versus the homeless.  Money from the feds pours into the state at $1.75 per resident and many states have a handler for this money and deals with the applications from the builder. Michigan’s handler is Michigan State Housing Development Authority (MSHDA).  Out of every 4 application 1 is awarded the credit towards their property taxes, which generally is about 9% of their project cost IF somewhere around 40% of the apartments in the project will be rent-restricted for 18 years.

Low-Income Housing Tax Credit for the High-Rise Builder

Some businesses have choosen Grand Rapids as their land for the plentiful, and just enough.  In 2015 there were 5 different LLCs, individuals or corporations who applied for this money for building projects in Grand Rapids.  The 20 East Fulton project, a mixed-use high-rise development, proposed by Midland-based Brookstone Capital, LLC was another benefactor in the past.  affordable housing

The LIHTC does nothing directly towards making buying a home more affordable for a lower-income-bracket family or individual.  The tax credit is for the builder. Directly it creates an incentive for builders (with extra time and knowledge of the application process) to create space for people or a restricted (disability, retired) or low-income (qualifies for public assistance). Without something like LIHTC there would be no force creating low-income housing, even though individuals with low-income have population growth just like upper-income or middle-income does.

The LIHTC keeps the light sabers at a stand-still. The rich do not push the poor totally away, and the poor do not kill the rich.  They live together in one apartment complex.  If you live with someone who pays way less rent than you do for the same apartment, the LIHTC might be why.  If you pay less than your neighbor does, don’t tell them.

If you still need housing click here...may the force be with you.

Driving Demand for Home Building in Grand Rapids, Michigan

Those surviving on low-income are driving the demand for home building in Grand Rapids, but indirectly. The MSHDA, Michigan State Housing Development Authority, comes in to give the businesses looking to expand a push in the right direction. Through a LIHTC, Low-Income Housing Tax Credit towards the property tax a business can make serving the demand profitable.

It’s not that Michiganders Are Lazy…

Low-income driving the demand for more, more-affordable, homes isn’t because too many people are sitting at home on their comfortable couch. Just in March 2016 the employment rate in Michigan dropped to a 4.8. That’s .2 below the National Average. That feels nice, but ‘averages’ when speaking to individuals sit with Diddy and Squat.  There’s Diddily, Squat and Average sitting on a couch..where is Tall? He’s working with you!

Meet the MSHDA:

There’s a movement around Grand Rapids to renovate old, unused spaces and create livable space. That’s a utopian dream, right. And it just so happens, there’s a high demand for low-income housing and there’s a benefit to the economy is people can live with expendable incomes. The MSHDA works on behalf of people earning too low an income to keep up, whether this is through single parent homes, disability, back-to-school (temporarily-under-employed) situation, temporary unemployment. Individually, Going the Mortgage route is one way. The MSHDA has stakes in another. Click here to read more about MSHDA. 

Meet the LIHTC:Money-Cycle-290x300

The fact that there is such a thing as market-rate rent and affordable rent is a sign, is it not? There’s a division in the market and the upper class has the money so claims the market-rent and the rest of the market can be subsidized somehow through government programs and legislation. It’s better than tearing down all the old buildings and putting up new, for only the wealthy-enough… actually even that will help. Those property taxes flow in and are turned into tax credits for OTHER businesses that will house at a rent-restricted rate. The symbiotic being of the government, business and people… amazing.

Places like Rockford Construction will come drive the Fulton stretch, Leonard St… and see an open space and throw up a new apartment complex…like the dozy going up across from adobe by GVSU and charge market-rate rent. Yeah these buildings will make it nicer, and then someone like Karl Chew with Brookstone Capital, LLC of Midland will come in and use the LIHTC to renovate an old building and have a 50-50 market-rate rent and affordable rent. Click here to learn more…

Click here to forget all that and buy a home…

 

2 Reasons Why Grand Rapids, MI, Needs the LIHTC for Affordable Housing

Wealth isn’t distributed based on how hard you work, not even in the glorious Grand Rapids. If it were a hard-working lower-class citizen would make the same as the hard-working upper-class. And it would be the working-class and the lazy-class.

Laissez-Faire Is Not Lazy-Free: It’s Free Market

Laizzez-Faire is said today by businessmen wanting government subsidies and incentives out of the picture entirely. It was originally used by Physiocrats in the eighteenth-century France, who believed that self-interest meant people would act in the direction of the common-good. Let’s see how that plays out…

affordable housing

“Hi, builder. Could you accept less every month than you COULD so that other less healthy parts of the economy can heal and thrive?”

“No, I’ll use my self-interest to maximize my profit.”

Yes, People have the right to their self-interested business decisions. All people have a right-to-life and life looks like food-shelter-water. I repeat, SHELTER. So protecting low-income people is vital to a healthy community. A sort of boomer-rang in the plan is needed to redirect self-interest towards the interest of other-selves. It’s called learning to share.

The LIHTC, Low-Income Housing Tax Credit plays the role of an invisible-hand of the free-market when income disparity causes the rich to serve the rich and the poor get displaced. Instead of putting money right into the real hands of the lower-rung, the LIHTC is an incentive for a builder to serve a lower-income need: cheaper than market-rate rent; affordable rent. For this promise a business will not pay as much in property taxes, and a penny saved is a penny earned – for everybody.

LIHTC #1 Drives the Market For Builders, #2 Creates a Space For Individuals or Families With Low-Income To Rent

So LIHTC does 2 things. It drives the market. It connects builder to renter. It lets the market be free and do it’s own thing but it also protects affordable options. Click here to Read more about how the LIHTC accomplishes this here.

Without the LIHTC, imagine this ask, “Hi, builder. Could you accept less every month than you COULD so that other less healthy parts of the economy can heal and thrive?”

“No, I’ll use my self-interest to maximize my profit.”

Yes, People have the right to their self-interested business decisions. All people have a right-to-life and life looks like food-shelter-water. I repeat, SHELTER. So protecting low-income people is vital to a healthy community. A sort of boomer-rang in the plan is needed to redirect self-interest towards the interest of other-selves. It’s called learning to share.

 

If Affirmative Action is an example of an invisible hand within the job market, then the LIHTC is an invisible hand in the real estate market, specifically for renting. Click here to Read more here.

Local Grand Rapidians made GR a Grand Place to Belong…

Great, unless…GR fills with outsiders with more money and the market-rate rent within downtown would increase with increased competition, and then the areas surrounding downtown rent would increase, outward and so on. As these areas fill with wealth, suburban areas swell in the opposite direction with refugee-like environments.Social_Network_Diagram_(segment).svg

This trickle down effect isn’t healthy for a community: it’s divisive. Clearly it can cause resentment and a whole slew of cultural problems, including gangs and violence. Of course, given it’s course, it would eventually flip back over. The cool is still cool and the money would still follow it around.

Instead of all that…we can have places like 20 East Fulton. 54 affordable renting people living next to people able to pay market-value prices. Read more here…

There’s the wealthy building-owners and the building-renters. There’s wealthy renters and not-wealthy renters. The LIHTC works to bridge the gap.

If you need help bridging your gap to affordable housing CLICK HERE.

What the 20 East Fulton Project Will Do for Families in Grand Rapids, MI

Brookstone Capital, a Midland-based LLC, is building a new multi-use space on Fulton, right across from the Children’s Museum.   Mr. Karl Chew, president of Brookstone, is no one to scoff at around town if you are looking for a rental.Since 2006 Brookstone has built 300 rental units in Grand Rapids. This project at $37million is set to be their largest yet.

Brookstone Capital LLC, Your Next Landlord?

$3million of that budget is footed by tax payers through the Low-Income-Housing-Tax-Credit.  No, not because Karl Chew is low-income.  Mr. Chew gets the tax break because impressively 50% of the apartments will be designated for low-income families/individuals. That’s 54 affordable units and 54 market-rate.  40% of the units is typical for approval of the LIHTC. Good Job, Mr. Chew, working the system.

All people, but especially families in Grand Rapids can benefit indirectly from this development because of the prime location of this building. Broken window theory says that urban decay, empty or vandalized buildings, correlates to serious crime in that neighborhood. No, the empty building does not make crime happen. Yes, the shiny new 20 East Fulton could prevent crime from happening. If something looks nice, people are more likely to treat it nice. If something looks messy, people are less likely to take care of it.  Karl Chew is all over Grand Rapids making unused spaces livable ones.6961230324_1b0d85eb32_b

Back in the day, there were three major department stores in Grand Rapids, not on Alpine or 28th Street but right downtown.

Mr. Chew’s might be the next department store of GR at 20 East Fulton on the lower level in the 10,000 feet of retail space. No, just kidding. But something new will be there.

Looks like Rick Devos’s Artprize scheme is working! This savvy business man uses art as the medium for community, yes, that’s natural, and the American Idol model, yes, that’s capitalist, to create hype for his hometown. He wanted to give a kickstart to the economy and transform the downtown area; re-imagine a whole new thing in the ghostly buildings of the prior GR glory.

Devos can have Chew’s tennants as neighbors right across division to his big state-of-the-arts building. The new-er UICA, Urban Institute of Contemporary Art, is a similar muti-use space. At the tippy-top is an outdoor fireplace and patio for the GR elite. 20 East Fulton might have the same glitzy vibe, we’ll see, but it can boast that it’s 50/50 market-value (glitzy) and affordable (gritty).

At some point in the future, maybe someone can site this article for how past humans of GR handled gaps in income. They will write a sparkling article about how 20 East Fulton is now (then) 100% affordable housing for 100% of families. Until that day…here’s Mr. Chew helping families in GR by renovating eye sores for people to rent, encouraging the government to offer incentives to businesses that protect the marginalized, making ArtPrize look even nicer, creating some needed parking and downtown retail space in a centralized location – ultimately making Grand Rapids safer and happier.

Click here if you need housing to a part of this glitzy and gritty grand city.