A Market Analysis of Housing Located in Downtoen Grand Rapids

A Market Analysis for Housing
Located in Downtown
Grand Rapids, Minnesota
Prepared for:
Grand Rapids Economic Development Authority
Grand Rapids, Minnesota
January 2007
615 First Avenue NE

Suite 400
Minneapolis, MN 55413
612.338.0012
January 15, 2007
Robert Mattei
Community Development Director
Grand Rapids Economic Development Authority
420 North Pokegama Avenue
Grand Rapids, Minnesota 55744
Dear Mr. Mattei:
Attached is our study entitled, “A Market Analysis for Housing Located in Downtown Grand
Rapids, Minnesota.” Our research includes a review of the potential sites for Downtown rede-
velopment, an examination of the demographic characteristics and growth trends in the Grand
Rapids Area, and an examination of the market conditions for housing.
Based on this analysis, we find that Block 19 sites would be the most appropriate location for
housing redevelopment. This site has the best positioning relative to traffic. In addition, the
proximity to the historic hotel and the river would be desirable to potential residents, especially if
design features could maximize these qualities.
Overall, based on our demand calculations and interviews with housing officials, apartment
managers, and Realtors, we find the greatest demand potential for affordable senior rental hous-
ing. We provide recommendations on a project totaling 40 units.
We have enjoyed performing this study and are available if you need additional information.
Sincerely,
MAXFIELD RESEARCH INC.
Mary C. Bujold Grant Martin

President Senior Research Analyst
Attachment
612-338-0012 (fax) 612-904-7979

615 First Avenue NE, Suite 400, Minneapolis, MN 55413
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY ............................................................................................... i
Introduction ..................................................................................................................... i
Summary of Findings...................................................................................................... i
Conclusions and Recommendations ............................................................................... ii
PURPOSE AND SCOPE OF STUDY.............................................................................. 1

Study Impetus ................................................................................................................. 1
Scope of Work ................................................................................................................ 1
SITE ANALYSIS ............................................................................................................... 2

Introduction ..................................................................................................................... 2
Downtown Redevelopment Master Plan......................................................................... 2
Strengths and Weaknesses of Downtown Grand Rapids for Housing............................ 4
Redevelopment Site Comments ...................................................................................... 9
Appropriateness of Downtown Grand Rapids for Multifamily Housing........................ 13
DEMOGRAPHIC ANALYSIS ......................................................................................... 15

Introduction ..................................................................................................................... 15
Market Area Definition ................................................................................................... 15
Population, Household and Employment Growth Trends and Projections..................... 15
Age Distribution.............................................................................................................. 15
Household Income .......................................................................................................... 20
Tenure by Age of Householder ....................................................................................... 22
Household Type .............................................................................................................. 25
Demographic Summary .................................................................................................. 27
EMPLOYMENT ANALYSIS........................................................................................... 28
Introduction ..................................................................................................................... 28
Covered Employment...................................................................................................... 28
Resident Employment ..................................................................................................... 29
Economic Development Projects in the Grand Rapids Area .......................................... 30
Interviews........................................................................................................................ 31
Summary of Employment Analysis ................................................................................ 32
FOR-SALE MULTIFAMILY ANALYSIS ..................................................................... 33

Introduction ..................................................................................................................... 33
Market Area Home Sales ................................................................................................ 33
For-Sale Multifamily Market Situation........................................................................... 34
Pending For-Sale Multifamily and Affordable Developments ....................................... 36
Interviews........................................................................................................................ 37
TABLE OF CONTENTS (continued)
Page
RENTAL MARKET ANALYSIS..................................................................................... 39
Introduction ..................................................................................................................... 39
Rental Market Situation .................................................................................................. 39
Pending Rental Developments ........................................................................................ 39
Interviews........................................................................................................................ 45
INDEPENDENT SENIOR HOUSING MARKET ANALYSIS .................................... 47

Introduction ..................................................................................................................... 47
The Evolution of Senior Housing Alternatives............................................................... 47
Types of Senior Housing in Today’s Market.................................................................. 48
Independent Senior Housing Market Analysis ............................................................... 50
Pending Independent Senior Housing Developments..................................................... 56
Interviews........................................................................................................................ 57
CONCLUSIONS AND RECOMMENDATIONS........................................................... 59

Introduction ..................................................................................................................... 59
Market-Rate Housing Demand Analysis ........................................................................ 59
Affordable Housing Demand Analysis ........................................................................... 65
Recommendations ........................................................................................................... 71
LIST OF TABLES
Table Number and Title Page

1. Population and Household Growth Trends and Projections, Grand Rapids Market
Area, 1990 to 2020................................................................................................... 17
2. Projection Age Distribution, Grand Rapids Market Area, 1990 to 2020................... 18
3. Household Income by Age of Householder, Grand Rapids Market Area,
2006 & 2011 ............................................................................................................ 21
4. Tenure by Age of Householder, Grand Rapids Market Area, 1990 & 2000 ............. 23
5. Household Type, Grand Rapids Market Area, 1990 & 2000 .................................... 26
6. Covered Employment by Industry, Itasca County, 1990 to 2005.............................. 28
7. Annual Average Resident Employment, Itasca County, 2000 to 2005 ..................... 29
8. Residential Resales, Grand Rapids Market Area, 1998-2006.................................... 33
9. Unit Mix , Sizes, Prices, & Absorption, Competitive Active For-Sale Developments,
December 2006, Grand Rapids Market Area........................................................... 35
10. Competitive General-Occupancy Rental Projects, Grand Rapids Market Area,
December 2006 ........................................................................................................ 40
11. Independent Senior Projects, Grand Rapids Market Area, December 2006.............. 51
12. Amenity Comparison, Independent Senior Projects, Grand Rapids Market Area,
December 2006 ........................................................................................................ 53
13. Services Comparison, Independent Senior Projects, Grand Rapids Market Area,
December 2006 ........................................................................................................ 54
14. Projected Demand for Market-Rate General-Occupancy For-Sale Housing,
Grand Rapids Market Area, 2005 to 2015 ................................................................. 60
15. Projected Demand for Market-Rate General-Occupancy Rental Housing,
Grand Rapids Market Area, 2005 to 2015 ............................................................... 62
16. Market-Rate Independent Senior Housing Demand, Grand Rapids Market Area,
Grand Rapids Market Area, 2006 & 2011 ............................................................... 64
17. Projected Demand for Affordable General-Occupancy For-Sale Housing,
18. Projected Demand for Affordable General-Occupancy Rental Housing, .
19. Affordable Independent Senior Housing Demand, Grand Rapids Market Area,
Grand Rapids Market Area, 2006 & 2011 ............................................................... 70
20. Summary of Housing Demand, Downtown Grand Rapids, 2005 to 2015................. 71
21. Recommended Unit Mix and Rents, Affordable Senior Housing Development,
Block 19 in Downtown Grand Rapids, January 2007.............................................. 72
EXECUTIVE SUMMARY
Introduction
Maxfield Research Inc. was engaged by the Grand Rapids Economic Development Authority to
conduct an analysis of the market potential for multifamily housing uses that would be located at
proposed redevelopment sites in Downtown Grand Rapids.
Summary of Findings
Site Analysis
4 Overall, Downtown Grand Rapids has several strengths that would make it attractive to po-
tential residents. It is an existing commercial district that sees a good deal of car and pedes-
trian traffic. It is close to the river and other natural amenities, and it offers a unique quality
unlike any other neighborhood in Grand Rapids. The greatest hurdle to overcome for hous-
ing in Downtown Grand Rapids is the perception that Downtown has nothing to offer poten-
tial residents. It would be important that any potential project provides greatest opportunity
for success to overcome this perception.
4 For the first phase of redevelopment that includes housing, we recommend focusing atten-
tion on Block 19. Among all redevelopment sites, this redevelopment site offers the best
site potential for housing. It has the best positioning relative to traffic. In addition, the
proximity to the historic hotel and the river would be desirable to potential residents, espe-
cially if design features could maximize these qualities.
Demographic and Economic Analysis
4 The Market Area is projected to add 2,271 persons (7%), with an increase of over 1,000
households (8%) between 2000 and 2010. Much of the growth occurring outside the City of
Grand Rapids will be driven by the demand for lake shore property. Household growth is
projected to be driven by households who are the market for multifamily housing – those
ages 25 to 34 typically are looking for rental options, those ages 55 to 65 have higher in-
comes and desire maintenance-free options, and those ages 65 and older may consider age-
restricted housing.
4 Several significant employment developments are proposed in the area. All of these would
increase the number of permanent jobs in the area, with most of them higher-wage jobs. In
addition, an aging workforce in the area means that there will be increased opportunities for
younger workers who will be needed to replace these workers. This trend will drive demand
for a spectrum of housing options that would serve single workers, families, and seniors.
Competitive Market Analysis
4 The market-rate for-sale homes range in price from $164,900 to $239,900, or between $120
and $148 per square foot. The affordable homes range in price from $138,000 to $145,000,
or $145 per square foot. Market-rate units have been absorbing at between one unit per
MAXFIELD RESEARCH INC. i

EXECUTIVE SUMMARY
three months and one unit per four months. Interviews suggested that absorption has slowed
recently and that earlier phases sold at a more rapid rate. Affordable homes have absorbed
at slower rates.
4 For general-occupancy rental units, the vacancy rate for market-rate units is 3% and the va-
cancy rate for subsidized/affordable units is 1%. Rents at the market-rate projects range
from $420 to $930. Rents at affordable projects range from $425 to $599.
4 For independent senior projects, there are only two units available, for an overall vacancy
rate of less than 1% – one market-rate vacancy and one subsidized vacancy. Rents/monthly
fees at market-rate units range from $625 to $1,065. Monthly rents at subsidized and af-
fordable units range from $440 to $520, or 30% of adjusted gross income.
Conclusions and Recommendations
4 Based on the demand analysis for housing in Downtown Grand Rapids, summarized in the
table below, we recommend developing an affordable senior rental project of about 40 units.
We believe this project would have the greatest opportunity to be successful given the pro-
jects location, demographic trends, and the current housing market.
SUMMARY OF HOUSING DEMAND

DOWNTOWN GRAND RAPIDS
2005 to 2015
Housing Type 2005 to 2010 2010 to 2015

General-Occupancy
Market-Rate
Townhome For-Sale Units Less than 5 5 to 10
Condominium For-Sale Units 0 Less than 5
Rental Units 0 8 to 17
Affordable
Condominium For-Sale Units 0 0
Rental Units 8 to 11 50 to 67
2006 2011
Age-Restricted (Senior)
Market-Rate
Adult/Few Service For-Sale Units 0 0
Adult/Few Service Rental Units 18 18
Affordable
Source: Maxfield Research Inc.
MAXFIELD RESEARCH INC. ii

EXECUTIVE SUMMARY
4 The table that follows shows our recommended development concept for an affordable sen-
ior rental project at Block 19. We assume that the project would most likely be funded with
essential function bonds issued through the local economic development authority (EDA).
The rents in the table include all utilities, except telephone and cable, along with grounds
keeping and snow removal. We recommend underground or covered parking and recom-
mend charging a fee of about $35 per month for the use of this facility. The rents recom-
mended in the table are somewhat higher than other affordable projects restricted to seniors
in the Market Area. However, we believe higher rents would be justified by the fact that the
project is newer.
RECOMMENDED UNIT MIX AND RENTS

AFFORDABLE SENIOR RENTAL
BLOCK 19 IN DOWNTOWN GRAND RAPIDS
JANUARY 2007
No. of % of Recommended Rent /

Unit Type Units Units Square Feet Rent Sq. Ft.
1 BR 15 38% 600 - 700 $550 - $600 $0.86 - $0.92
1 BR +Den 15 38% 800 - 900 $650 - $750 $0.81 - $0.83
2 BR 10 25% 1,000 - 1,100 $800 - $900 $0.80 - $0.82
TOTAL 40 100% AVG 825 $650 $0.89
4 We estimate that given the existing senior rental market the project proposed would absorb
at a relatively rapid pace. We believe that half of the units would be pre-leased prior to oc-
cupancy. The remaining units would absorb at a rate of between 4.0 and 5.0 units per
month, for a lease-up period of between four and five months following occupancy.
MAXFIELD RESEARCH INC. iii

PURPOSE AND SCOPE OF STUDY
Study Impetus
Maxfield Research Inc. was engaged by the Grand Rapids Economic Development Authority to
conduct an analysis of the market potential for multifamily housing uses that would be located at
proposed redevelopment sites in Downtown Grand Rapids.
Scope of Work
The scope of this study includes:
• an assessment of Downtown Grand Rapids as a site for multifamily housing.

• a definition of the primary draw area (“Market Area”) for multifamily housing in Grand Rap-
ids;
• an analysis of the demographic growth trends and characteristics in the Market Area;
• an analysis of employment growth trends and characteristics in the Market Area;
• an assessment of for-sale housing development trends and current market conditions in the
Market Area;
• an assessment of rental housing development trends and current market conditions in the
Market Area;
• an assessment of independent senior housing development trends and current market condi-
tions in the Market Area;
• a projection of demand for retail and office space and multifamily housing in the Market
Area and the proportion of demand that could potentially be captured by the proposed rede-
velopment sites in Downtown Grand Rapids; and
• recommendations of appropriate types of housing to meet market demand based on analysis.
The report contains primary and secondary research. Primary research includes interviews with
Realtors, builders/developers, property managers, City staff and others involved in the housing
market in the Grand Rapids area. All of the market data on existing/pending developments was
collected by Maxfield Research Inc. and is accurate to the best of our knowledge. Secondary
data, such as U.S. Census, is credited to the source, and is used as a basis for analysis.
MAXFIELD RESEARCH INC. 1

SITE ANALYSIS
Introduction
This section provides an assessment of the physical qualities that affect the potential market for
housing in Downtown Grand Rapids. For purposes of this analysis, Downtown Grand Rapids is
defined the same as in the Downtown Redevelopment Master Plan – with NW and NE Sixth
Street serving as the northern border, NE Third Avenue serves as the eastern border, the Missis-
sippi River is the southern border, and NW Sixth Avenue is the western border.
Made up of the several blocks surrounding the intersection of Highway 2 and Highway 169,
Downtown Grand Rapids is characterized by a mix of uses, ranging from civic and governmental
to specialty and neighborhood retail. Approximately 17,000 vehicles pass through the area every
day, and the area sees a good deal of pedestrian traffic as people buy goods and use services in
the area. Retailers include gift shops, antique stores, drug stores, florists, banks, computer stores,
clothing and shoe stores, and a few restaurants. In addition, services such as Realtors, account-
ants, and information system consultants have located in Downtown. While no longer the pri-
mary commercial district in Grand Rapids, Downtown still serves as a secondary commercial
center and a primary gathering place for community functions.
There are currently only a few housing units in Downtown, consisting mainly of the PHB
Apartments and a few units above storefronts. However, Downtown transitions into traditional
residential neighborhoods at its borders.
This section briefly reviews the Downtown Redevelopment Master Plan, highlights the strengths
and weaknesses of the Downtown for housing, and reviews each block under discussion for re-
development.
Downtown Redevelopment Master Plan

Adopted in February 2006, the Downtown Redevelopment Master Plan for Grand Rapids out-
lines a plan to guide private and public redevelopment efforts in order to achieve a vibrant and
sustainable Downtown. The plan puts forward descriptions of the character and quality of a de-
sired Downtown and recommends a course of actions in order to achieve this vision.
With recommendations for a variety of uses, the plan identifies five redevelopment opportunity
sites – Block 17/18, Block 19, Block 29, Block 26, and Block 37. These sites are discussed in
greater detail in the sections that follow and shown on the following map. Along with housing,
the plan provides recommendations on land uses, including commercial, civic, industrial, mixed-
use, and neighborhood transition.
Housing in the Downtown Plan
Housing recommendations in the plan are exclusively mixed use, with residential units above ei-
ther retail or office uses. These residential uses are recommended for Block 17/Block 18, Block
19, and Block 29.

SITE ANALYSIS
Key Redevelopment Activities, Downtown Grand Rapids
Source: Downtown Redevelopment Master Plan, February 2006, Hoisington Koegler Group Inc.

SITE ANALYSIS
Strengths and Weaknesses of Downtown Grand Rapids for Housing

Based on our visual analysis of the existing physical structures and layout of the Downtown and
its community orientation, Maxfield Research Inc. identified key characteristics of the Down-
town and classified them as strengths and weaknesses, as they pertain to the potential to support
additional housing units in the Downtown.
Downtown Strengths
4 Activity. Because of its location at the intersection of two highways, Downtown Grand
Rapids has a good deal of traffic moving through it. However, beyond that traffic, there is
also a good deal of local car traffic and pedestrian traffic, primarily people shopping at re-
tailers in the area. While there could be even more activity if the right kinds of retailers
were drawn to the area, the existing activity level will be a draw for residents looking to live
in an area that has some life to it.
4 Existing businesses. With a couple of drug stores, a grocery store, and a small mall, Down-
town Grand Rapids offers potential residents several shopping options that would be close to
home, all of which would be within walking distance. In addition, there are several restau-
rants and coffee shops that would also be attractive to potential residents.
4 Proximity to other commercial districts. Because of its central location, residents of

Downtown would be within close proximity to other commercial areas of Grand Rapids, in-
cluding the primary commercial area along South Pokegama Avenue and retailers and busi-
nesses on both ends of town along Highway 2. All of these businesses would be minutes
away.
The Central School serves as the focal point of Downtown Grand Rapids.

SITE ANALYSIS
Blandin Paper Plant, looking south across NW Fourth Street.
4 Downtown employers. Home to several small businesses along with Blandin Corporation
and the Itasca County government center, Downtown Grand Rapids has a large workforce.
Many of these workers are potential residents who may desire to live closer to their work-
place. If the right type of housing is provided, these workers may choose to relocate to save
on commuting costs and reduce their automobile use.
4 Civic/government presence. While most likely not a primary reason for moving to Down-
town Grand Rapids, we believe that many potential residents would appreciate the proximity
to government services that housing in Downtown would offer.
4 Riverfront. The Mississippi River offers an excellent natural amenity for residents in
Downtown. Recent improvements along the river have improved the connection between
this area and the river.
4 Trails and other natural amenities. In addition to the riverfront, Downtown is close to
several natural trails. The Downtown Plan recommends additional connections along with a
bicycle system for the City. Additionally, Downtown is within a half-an-hour drive to state
parks, forest reserves, and hundreds of lakes. Some residents may want to live within walk-
ing distance of retail amenities, but in a region with a wealth of natural amenities within
driving distance.
4 Historic buildings. Along with the Central School, City Hall, and the Pokegama Hotel,
Downtown Grand Rapids has several older buildings that provide character to the Down-
town unlike any other place in Grand Rapids. We believe these buildings, especially the
ones that can be maintained and used, will draw residents to the Downtown.

SITE ANALYSIS
Downtown retail along NW First Avenue, across from the Central School.
4 A few “commercial nodes.” Downtown Grand Rapids is bisected by two highways and
railroad tracks. The result is that several smaller commercial nodes have developed rather
than one large node. We recognize that this poses challenges (see weaknesses section that
follows). However, it has also resulted in a patchwork of uses, with differing characteristics,
all within walking distance. We believe this helps make this area unique and ultimately a
more desirable place to live.
4 Transition areas between commercial and traditional residential neighborhoods.

Downtown Grand Rapids transitions gradually from its commercial district to traditional
single-family neighborhoods. We believe this feature would be good for housing in Down-
town Grand Rapids, making the area distinct from residential neighborhoods but still part of
a residential community.
Downtown Weaknesses
4 Traffic. Two major highways intersect in Downtown Grand Rapids, bringing high traffic
counts through the area. In general, residents prefer areas that provide appropriate buffering
between traffic and housing.
4 Lack of particular types of retail. Downtown Grand Rapids has many retail establish-
ments. However, it is likely that residents of Downtown would have to leave the area for
many of their shopping needs. This fact may be seen as a drawback for housing in the area.

SITE ANALYSIS
Block 17, looking southwest across NW First Ave.
4 Blandin plant. The Blandin plant in Downtown Grand Rapids is a monolithic structure that
dominates the area. Many potential residents would likely see this as a drawback to living in
the area. In addition, the proposed expansion of the Blandin plant creates uncertainty for the
Downtown, as plans call for taking existing commercial blocks, and may make marketing a
newer housing project more difficult, especially if such a project is in close proximity to the
expansion area.
4 Railroad tracks. The tracks that run east-west through the Downtown separate the north
end from the south end. Although the tracks do not see substantial traffic, they still carry
trains. Some residents may see this train traffic as a drawback to living in Downtown.
4 Downtown is spread out/lacks a focal point. With the railroad tracks, the two highways,
and the river, Downtown Grand Rapids has developed into a decentralized commercial dis-
trict. This adds a unique character to the area, but makes it difficult to site housing which
could take advantage of a critical mass of activity and services.
4 Older structures in disrepair. While the older buildings in Downtown create a unique
space, the buildings are often in bad shape. These buildings make the area a less than desir-
able place for housing. Obviously, the most dilapidated buildings are currently under con-
sideration for rehabilitation or redevelopment.
4 Cost issues associated with redevelopment. Although not analyzed in a detailed way in
this study, there are several cost issues – primarily demolition and soil remediation costs –
that would make redevelopment in Downtown Grand Rapids expensive.

SITE ANALYSIS
Old Pokegama Hotel on Block 19, currently the PHB Apartments, looking south.
Block 19, looking west. Pokegama Hotel is tan building center right.

SITE ANALYSIS
Redevelopment Site Comments

Maxfield Research Inc. analyzed the five proposed sites for redevelopment in Downtown Rede-
velopment Plan. A discussion of the redevelopment sites and their potential for housing follows.
Block 17/Block 18
Block 17 and Block 18 make up a small commercial node in the southwest corner of Downtown,
with storefronts along North Third Street and West First Street. The area is somewhat discon-
nected from the remainder of Downtown because of the railroad tracks and Pokegama Avenue.
However, the businesses generate a decent level of car and pedestrian traffic.
Redevelopment on Block 17 and Block 18 depends on a proposed expansion of the Blandin

plant. Blandin, which controls Block 17 and areas west of the block, is waiting on federal and
corporate approvals to begin an expansion that would increase paper production at the plant from
450,000 tons per year to 760,000 tons per year. The expansion would occur on an area south of
the railroad tracks, west of West First Avenue, and east of the existing plant.
Under the Downtown Redevelopment Plan, specific redevelopment goals for Block 17 and
Block 18 are not discussed at length if the expansion does not move forward, which makes sense
considering the uncertainty associated with the area if the proposed expansion is postponed. If
the project does not move forward in the next year, it is likely that the proposal will resurface in
the near future.
Block 29, looking southeast across North Pokegama Avenue.

SITE ANALYSIS
City Hall on Block 29, looking northeast across North Pokegama Avenue.
The Downtown Redevelopment Plan does consider redevelopment options if the expansion
moves forward, specifically for Block 18. The plan proposes mixed use development on Block
18, oriented to Blandin and designed to connect this area of Downtown with the rest of the
Downtown. “Housing related to Blandin” is suggested as a potential use on the block.
According to the general manager of the Blandin Plant, it is unlikely that the company would
need additional housing near the plant. At this point, the company only has one worker on-site
under short-term conditions, and the manager said that the number does not increase signifi-
cantly. Blandin currently owns three townhome units on Golf Course Road to accommodate
these situations. With only one worker, two of these units are unoccupied. In the rare occasion
when the company needs to house more workers over a short-term period, Blandin uses nearby
resorts, which are set up to offer housekeeping and meal services on site.
We believe general-occupancy housing unrelated to the plant may not be desirable on this block
due to the proximity to the plant itself. Due to the uncertainty of the expansion and the special-
ized nature of such housing, we recommend focusing housing efforts in Downtown on other
blocks, until after the plant expansion occurs. If the expansion occurs, the City can begin discus-
sions with Blandin to determine if such a need for housing exists and the best way to coordinate
redevelopment efforts around such a need.

SITE ANALYSIS
Block 19
Block 19 is directly east of Block 18, across Pokegama Avenue. The northeastern corner of the
block is occupied by the Pokegama Hotel, a historic structure dating from the 1890s. The eastern
portion of the block is currently used for parking and there are commercial structures on the
southwestern corner.
The Downtown Redevelopment Plan analyzed concepts for Block 19 that included both a focus
on surface level parking and structured parking options. All concepts call for retaining the Poke-
gama Hotel. The proposed concept with surface parking includes a bank on the southwest corner
of the block with a mixed-use, commercial and residential building on the northeastern corner.
The structured parking concepts include multi-story mixed-use buildings with residential units
on the upper floors and commercial space on the first level. One structured parking concept in-
cludes a bank on the southwestern corner and one does not.
The Downtown Redevelopment Plan contends the structured parking options are more finan-
cially feasible, use the property better, and can better attract potential residents with dedicated
parking.
Block 37, looking south across NW Fourth Street.
We believe Block 19 represents the greatest opportunity for housing of all the redevelopment
sites. Of all the proposed redevelopment sites, the eastern side of the block would provide the
greatest opportunity to be in the center of Downtown while being buffered against the traffic that

SITE ANALYSIS
moves through Downtown. In addition, the proximity to the historic hotel and the river would be
desirable to potential residents, especially if design features could maximize these qualities.
Of all the redevelopment sites, Block 19 is closest to the redevelopment at the former site of
Grand Itasca Clinic and Hospital. About 90 units of housing, including senior, rental town-
homes, and affordable for-sale homes, are proposed at this site. We believe that the redevelop-
ment on the south side of the river may create momentum on the north side of the river.
As the Downtown Redevelopment Plan points out, there are soil issues associated with this
block. We believe these issues may present significant costs for a redevelopment project. Any
development on this site would need to maximize to the greatest extent possible the income gen-
erated from housing on this project in order to reduce the finance “gap” to make this project fea-
sible.
Block 29
Block 29 is east of the Central School, with Highway 2 as its southern border. The northern end
of the block has the Grand Rapids City Hall and the fire station. The southern part of the block –
the area proposed for redevelopment – consists of a single-story commercial building.
Block 36, looking southwest across the intersection of NW First Avenue and
NW Fourth Street. The Blandin plant is in the background.
The Downtown Redevelopment Plan recommends a mixed-use redevelopment concept on the

southern part of Block 29, with housing oriented towards Central School along North Pokegama
Avenue on the upper levels and commercial space on the lower levels. Housing would be buff-
ered as best as possible from the traffic along Highway 2.

SITE ANALYSIS
We believe that it may be difficult to appropriately buffer traffic and that the site does not offer
much potential for housing. We recommend prioritizing other areas for housing uses over this
block.
Block 36/Block 37
Block 36 and Block 37 are directly south of Central School across Highway 2. Block 36 is cur-
rently vacant and Block 37 contains several dilapidated, unused buildings. These blocks see a
good deal of vehicle traffic, including truck traffic, along the Highway.
The Downtown Redevelopment Plan does not envision housing on Block 36 or Block 37. This
assessment of appropriate uses on these sites is correct. There is too much traffic along Highway
2 for these sites to successfully accommodate residential uses. Sandwiched between the highway
and the railroad tracks, these sites are much more appropriate for commercial uses. In addition,
there is some uncertainty associated with uses south of Block 36, which could be included in the
proposed Blandin expansion. It is also likely that either Block 36 or Block 37 would be used as
parking that would serve all of Downtown.
It is our understanding that, because of a fire that occurred in an existing structure on the site, the
City may be interested in redeveloping Block 36 and Block 37 sooner than some of the other
blocks. If this event creates an opportunity, we recommend the City pursue it. However, we
recommend staying with the commercial concept and not attempting to place a residential use on
either of these blocks.
Appropriateness of Downtown Grand Rapids for Multifamily Housing

Overall, Downtown Grand Rapids has several strengths that would make it attractive to potential
residents. It is an existing commercial district that sees a good deal of car and pedestrian traffic.
It is close to the river and other natural amenities. And it offers a unique quality unlike any other
neighborhood in Grand Rapids.
In general, the greatest hurdle to overcome for housing in Downtown Grand Rapids is the per-
ception that Downtown has nothing to offer potential residents. Based solely on our site analysis
and not considering demographic and market trends, we believe that, if appropriate housing were
built and priced well for the market, such a project would do well. Downtown has many attrib-
utes the residents would appreciate. It would be important that any potential project provides
greatest opportunity for success to overcome this perception.
For the first phase of redevelopment that includes housing, we recommend focusing attention on
Block 19. Among all redevelopment sites, this redevelopment site offers the best site potential
for housing. It has the best positioning relative to traffic. In addition, the proximity to the his-
toric hotel and the river would be desirable to potential residents, especially if design features
could maximize these qualities.

SITE ANALYSIS
We understand that redevelopment costs at Block 19 may be significant because of soil issues on
the eastern portion of the block. Combined with the fact that any housing project in Downtown
would have to be affordable, these higher redevelopment costs may mean a larger public subsidy
to make the project work.

DEMOGRAPHIC ANALYSIS
Introduction
This section analyzes population and household growth trends and demographic characteristics
of an area defined as the primary draw area, or “Market Area,” from which new housing devel-
opments in Downtown Grand Rapids would draw the majority of their residents.
Market Area Definition

Based on traffic and community orientation patterns, geographical and man-made barriers, and
our experience in senior housing feasibility, we believe multifamily housing in Grand Rapids
would draw prospects primarily from the following communities:
Cities: Grand Rapids, La Prairie, Bovey, Calumet, Cohasset, Coleraine, Marble, and Taconite.
Townships: Grand Rapids, Arbo, Blackberry, Deer River, Greenway, Harris, Iron Range, Law-
rence, Splithand, Trout Lake, Wabana, and Wildwood.
We estimate that approximately 80% of the demand for housing projects in Grand Rapids would
come from the above area while the remaining portion would come from outside the defined
Market Area. These potential residents will include people currently residing just outside the
Market Area who have an orientation to the area (i.e. church, doctor, etc.), employees who work
in Grand Rapids but who cannot find appropriate housing, people who once resided in the area
that desire to move back to be near friends and family, and parents of adult children living in the
Market Area. These groups are estimated to account for at least 20% of the total demand for
housing in the Market Area.
A map of the Market Area, highlighted in orange, is shown on the following page.
Population and Household Growth Trends and Projections

Table 1 presents population and household growth trends and projections for the Market Area
from 1990 to 2020. The 1990 and 2000 population and household figures were obtained from
the U.S. Census Bureau, while the projections for 2010 to 2020 were made by Maxfield Re-
search, based on data from the Minnesota Department of Administration. The following summa-
rizes key demographic findings.
4 Grand Rapid’s population declined slightly during the 1990s, from 7,976 people in 1990 to
over 7,764 people in 2000 (-3%). The Remainder of the Market Area increased during the
1990s (+2,200 people, or 11%).
4 According to the U. S. Census Bureau, Itasca County contained 43,992 persons and 17,789
households in 2000. Grand Rapids city, with a population of 7,764 persons and 3,446
households accounted for about 20% of the County’s population and household base.

4 In 2000, the Primary Market Area, with a population of 30,619 persons and 12,406 house-
holds accounted for about 70% of the County’s population and household base.
4 During the 1990s, Itasca County’s population increased by over 3,100 persons (8%), while
its household base grew similarly to the State’s rate of growth, by over 2,300 households
(15%).

TABLE 1
POPULATION & HOUSEHOLD GROWTH TRENDS
GRAND RAPIDS MARKET AREA
1990-2020
Maxfield Change
U.S. Census Projections 1990-2000 2000-2010
1 1
1990 2000 2010 2020 No. Pct. No. Pct.
Population
Grand Rapids 7,976 7,764 11,871 12,349 -212 -2.7 4,107 52.9
Remainder of Market Area 20,654 22,855 21,019 22,646 2,201 10.7 -1,836 -8.0
Market Area Total 28,630 30,619 32,890 34,995 1,989 6.9 2,271 7.4
Itasca County 40,863 43,992 47,600 51,030 3,129 7.7 3,608 8.2
Minnesota 4,375,099 4,919,479 5,452,500 5,909,700 544,380 12.4 533,021 10.8
Households
Grand Rapids 3,246 3,446 5,396 5,880 200 6.2 1,950 56.6
Remainder of Market Area 7,656 8,960 8,024 9,206 1,304 17.0 -936 -10.4
Market Area Total 10,902 12,406 13,420 15,087 1,504 13.8 1,014 8.2
Itasca County 15,461 17,789 20,000 22,000 2,328 15.1 2,211 12.4
Minnesota 1,647,853 1,895,127 2,182,200 2,440,800 247,274 15.0 287,073 15.1

1
2010 and 2020 projections include adjustments for the fact that the City of Grand Rapids will annex most of
Grand Rapids Township. Between 2005 and 2010, 3,500 people are shifted to Grand Rapids from the
Remainder of the Market Area.
Sources: U.S. Census Bureau; MN Department of Administration; Maxfield Research Inc.

4 Based on our review of growth trend projections for the County and considering the trend of
lakefront property attracting retiring households from outside the County, we expect that the
County will continue to see steady growth throughout this decade. Based on projections
from the State demographer, between 2000 and 2010, Itasca County is projected to add
3,608 persons (8%) and 1,801 households (10%).
4 Between 2000 and 2010, the City of Grand Rapids is expected to add over 4,100 people
(53%) and about 2,000 households (57%). Much of this growth is from an annexation by
the City of nearly all of Grand Rapids Township in phases over the 2005 to 2010 period.
4 The Market Area is projected to add 2,271 persons (7%), with an increase of over 1,000
households (8%) between 2000 and 2010.
Age Distribution
Table 2 and the accompanying graphic show the age distribution of the Market Area population
in 1990 and 2000 as well as estimates for 2010. The 1990 and 2000 distributions are from the
U.S. Census. Maxfield Research Inc. derived the 2010 estimates from data obtained from the
State’s Department of Administration.
The following are key trends in the Market Area’s age distribution.
TABLE 2
POPULATION AGE DISTRIBUTION
1990 to 2010
Maxfield Change
U.S. Census Estimate 1990-2000 2000-2010
Age 1990 2000 2010 No. Pct. No. Pct.
Under 20 8,786 8,397 8,150 -389 -4.4 -247 -2.9

20 to 24 1,369 1,516 1,820 147 10.7 304 20.1
25 to 34 3,960 3,014 3,825 -946 -23.9 811 26.9
35 to 44 4,480 4,739 3,805 259 5.8 -934 -19.7
45 to 54 3,059 4,822 4,890 1,763 57.6 68 1.4
55 to 64 2,619 3,161 4,530 542 20.7 1,369 43.3
65 to 74 2,475 2,502 2,920 27 1.1 418 16.7
75 and over 1,882 2,468 2,950 586 31.1 482 19.5
Total 28,630 30,619 32,890 1,989 6.9 2,271 7.4
Sources: U.S. Census; MN Dept. of Administration ; Maxfield Research, Inc.
4 The largest gain in population between 1990 and 2000 occurred in the 45-to-54-age cohort;
these gains can be attributed to the aging of the oldest baby boomers (persons born between

1946 and 1964). Overall, the Market Area’s 45-to-54-age cohort increased by 1,763 persons
(58%). Some younger households in this age group are entering their peak earning years
and looking for move-up housing while some older households will consider downsizing
their housing as children leave home and form households of their own.
4 During the 2000s, the 55-to-64 age cohort is expected to see the largest increases in popula-
tion, as the leading edge of the baby boomers age into their late 50s and early 60s. In the
Market Area, this age cohort is expected to increase by 43%, a gain of 1,369 persons.
4 This data reveals two trends. First, the Market Area’s population is aging in place, and, sec-
ond, retirees are purchasing lakefront property and second homes in the County.
4 During the 2000s, the 35-to-44-age cohort is expected to see a significant decline as younger
baby boomers age out of this cohort and are replaced by the much smaller baby-bust genera-
tion (a period of low birth rates that occurred between 1965 and 1976). Overall, during the
2000s, the Market Area is expected to lose roughly 934 people (20%) in this age group.
4 The number of persons ages 75 and older in the Market Area (1,882 in 1990), has increased
steadily since 1990, but the rate of growth will slow during 2000 to 2010, as the Great De-
pression of the 1930s resulted in lower birth rates. This age cohort is expected to increase
by 20% between 2000 and 2010, a gain of almost 500 people.
4 Trends in the City of Grand Rapids are generally similar to the Market Area as a whole.
POPULATION AGE DISTRIBUTION

10,000
9,000
8,000
7,000 1990
NUMBER
6,000 2000
2010
5,000
4,000
3,000
2,000
1,000
0
Under 20 20 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 and
over
AGE

Household Income
Household income data helps in determining the demand for different types of owned and rented
housing based on the size of the market at specific incomes levels. Table 3 shows the estimated
household income in the Grand Rapids Market Area for 2006 and 2011. Household income data
was compiled by Claritas, Inc. (a nationally recognized demographics firm) and adjusted by
Maxfield Research Inc., based on our household projections.
4 The median household income in the Market Area in 2006 is estimated to be $44,800. By
2011, the Market Area’s median income is projected to climb to $49,500 (a 10% increase).
4 Households under age 35 are typically in the rental market or entry-level for-sale market,
and, along with seniors, are one of the primary markets for housing in Downtown Grand
Rapids. The median income in 2006 of households ages 15 to 24 was estimated to be
$24,500. With this income, a household could afford a monthly rent of about $600 (using a
30% affordability benchmark that would include rent, utilities, and garage parking) or a
maximum purchase price of about $61,000 to $73,500 (calculating a home purchase price of
2.5 to 3.0 times household income). Younger households earning above the median income
will primarily be a market for entry-level ownership housing or higher-end rental housing.
4 Households ages 35 to 54 had the highest estimated median incomes in the Market Area in
2006 (at $55,200 and $65,100, respectively). Most of these households will seek single-
family homes and will not be a primary market for multifamily housing in Downtown Grand
Rapids.
4 While most will continue to live in their single-family homes, households ages 55 to 64
would represent a market for multifamily housing in Downtown Grand Rapids. As house-
holds become empty-nesters, they often opt for for-sale townhomes or condominiums,
which require less maintenance, allowing them to spend more time on other activities. The
units that they purchase may often have an equal amount of square feet with upgraded fin-
ishes than their current single-family homes. The number of households ages 55 to 64 is
projected to grow by 430 households during the next five years and will continue to grow
through 2015 as the bulk of the baby boom generation ages into their 50s and 60s.
4 Seniors ages 65 and over are also a market for multifamily housing, including rental and
owner housing. Typically, seniors no longer need the amount of space in their single-family
homes and will seek multifamily housing that will free them from home maintenance. The
median income in 2006 is an estimated $33,500 for younger seniors (ages 65 to 74) and
$23,700 for older seniors (ages 75 and over). While their incomes are lower (since most are
retired), they generally have full equity in an existing home that they can allocate toward the
purchase of a new multifamily unit.

TABLE 3
HOUSEHOLD INCOME BY AGE OF HOUSEHOLDER
(Number of Households)
2006 & 2011
Age of Householder
Total 15-24 25-34 35-44 45-54 55-64 65 -74 75+
2006
Less than $15,000 1,723 183 126 187 202 235 268 521
$15,000 to $24,999 1,692 130 217 168 201 247 291 437
$25,000 to $34,999 1,740 120 288 237 224 312 296 264
$35,000 to $49,999 2,072 88 333 322 384 398 322 224
$50,000 to $74,999 2,825 73 400 559 763 618 241 170
$75,000 to $99,999 1,540 10 141 317 554 292 121 105
$100,000 or more 1,423 10 94 273 620 262 82 81
Total 13,014 612 1,601 2,063 2,949 2,364 1,621 1,803
Median Income $44,790 $24,503 $42,596 $55,244 $65,147 $49,636 $33,514 $23,700
2011
Less than $15,000 1,565 131 146 169 169 239 268 443
$15,000 to $24,999 1,570 88 235 147 171 225 284 422
$25,000 to $34,999 1,593 102 261 153 192 307 283 294
$35,000 to $49,999 2,105 86 463 227 285 452 339 255
$50,000 to $74,999 2,863 75 483 430 614 687 356 218
$75,000 to $99,999 1,733 17 262 270 502 429 151 101
$100,000 or more 2,092 36 204 336 723 455 180 159
Total 13,521 534 2,053 1,733 2,656 2,794 1,861 1,891
Median Income $49,480 $29,673 $47,475 $59,883 $70,787 $56,351 $39,254 $27,765
Change 2006 -2011

Less than $15,000 -158 -52 19 -18 -33 5 0 -79
$15,000 to $24,999 -121 -42 17 -21 -30 -23 -8 -15
$25,000 to $34,999 -147 -18 -27 -83 -31 -5 -13 29
$35,000 to $49,999 33 -2 130 -95 -100 53 17 31
$50,000 to $74,999 38 2 82 -129 -150 70 115 48
$75,000 to $99,999 193 7 121 -47 -52 137 30 -4
$100,000 or more 669 26 109 63 103 193 98 78
Total 507 -79 452 -331 -293 430 240 88
Median Income $4,690 $5,170 $4,879 $4,639 $5,641 $6,715 $5,740 $4,065
Sources: Claritas, Inc.;

Maxfield Research Inc.

Growth and Income Trends by Age of Householder

Grand Rapids Market Area - 2006 to 2011
3,500 $70,000
2006
3,000 2011 $60,000
2006 Median Income

2006 Income
No. of Households
2,500 $50,000
2,000 $40,000
1,500 $30,000
1,000 $20,000
500 $10,000
0 $0
15-24 25-34 35-44 45-54 55-64 65 -74 75+
Age of Householder
Tenure by Age of Householder
Table 4 shows the number of owner and renter households in the Grand Rapids Market Area by
age group in 1990 and 2000. This data is useful in determining demand for certain types of
housing since housing preferences change throughout an individual’s life cycle. Key points de-
rived from the table follow.
4 In 2000, 81% of the households in the Market Area owned their housing. The homeowner-
ship rate in the City of Grand Rapids was 60% in 2000, down from 65% in 1990. In the re-
mainder of the Market Area, the homeownership rate increased from 88% in 1990 to 89% in
2000.
4 The significantly higher homeownership rates in the County compared to Grand Rapids re-
flects the rural nature of the County, where a lack of infrastructure does not support high
density rental housing.
4 In general, the homeownership rate in Grand Rapids declined across all age groups over the
period. In the remainder of the Market Area, it remained relatively constant across age
groups. In other words, the decline in households over this period occurred for owner
households more than for renter households.

TABLE 4
TENURE BY AGE OF HOUSEHOLDER
1990 & 2000
City of Grand Rapids Remainder of Market Area Market Area Total

1990 2000 1990 2000 1990 2000
Age No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct.
15 to 24 Own 23 13.6 22 9.3 111 42.7 134 43.2 134 31.2 156 28.6
Rent 146 86.4 214 90.7 149 57.3 176 56.8 295 68.8 390 71.4
25 to 34 Own 287 49.2 185 46.5 1,034 78.7 782 74.8 1,321 69.6 967 67.0
Rent 296 50.8 213 53.5 280 21.3 263 25.2 576 30.4 476 33.0
35 to 44 Own 475 74.1 400 65.6 1,657 90.2 1,736 89.9 2,132 86.0 2,136 84.1
Rent 166 25.9 210 34.4 181 9.8 194 10.1 347 14.0 404 15.9
45 to 54 Own 332 78.7 461 75.5 1,232 93.6 1,977 93.2 1,564 90.0 2,438 89.2
Rent 90 21.3 150 24.5 84 6.4 144 6.8 174 10.0 294 10.8
55 to 64 Own 326 80.1 304 77.4 1,073 94.1 1,416 95.2 1,399 90.4 1,720 91.4
Rent 81 19.9 89 22.6 67 5.9 72 4.8 148 9.6 161 8.6
65 to 74 Own 386 74.8 320 71.9 969 92.5 1,075 93.9 1,355 86.6 1,395 87.7
Rent 130 25.2 125 28.1 79 7.5 70 6.1 209 13.4 195 12.3
75+ Own 278 54.7 375 49.8 657 88.8 811 88.1 935 74.9 1,186 70.8
Rent 230 45.3 378 50.2 83 11.2 110 11.9 313 25.1 488 29.2
Total Own 2,107 64.9 2,067 60.0 6,733 87.9 7,931 88.5 8,840 81.1 9,998 80.6
Rent 1,139 35.1 1,379 40.0 923 12.1 1,029 11.5 2,062 18.9 2,408 19.4
Source: U.S. Censu Bureau, Maxfield Research Inc.

4 While rates remained relatively stable in the Grand Rapids Market Area, homeownership
rates throughout Minnesota increased during the 1990s. A primary reason for the increasing
homeownership rate is that the greatest household growth occurred in the age groups 35 to
64 – or the age groups with the highest homeownership rates. An aging population, low
mortgage-interest rates, and a lack of rental housing development were the primary reasons
for increased homeownership.
4 The proportion of households that rent their housing decreases significantly as households
age. However, by the time households reach their senior years, rental housing often be-
comes a more desirable option than homeownership. This trend can be seen more in house-
holds in Grand Rapids, where there are likely more senior housing options, than in the re-
mainder of the Market Area, where there are likely fewer options.
TENURE BY AGE OF HOUSEHOLDDER

CITY OF GRAND RAPIDS, 2000
800
700
Own Rent
600
378
150
500 210
Number
400 125
89
300 213
461
200 400 375
304 320
214
100 185
0 22
15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75+
Age
4 We project that the homeownership rate will remain high during this decade because the
baby boom generation will remain in high homeownership stages of their lives (they will be
ages 46 to 64 in 2010) and relatively low mortgage rates are continuing to make ownership
more affordable to moderate-income households.
4 We believe that these two factors will contribute to demand for multifamily for-sale housing
in the Market Area. Whether or not Downtown Grand Rapids has the potential to capture a
portion of this demand depends on the site and the pricing. We believe that older, more af-
fluent buyers will be very particular about their housing. These buyers may not be willing to
be “pioneer” buyers in a Downtown that has not yet established a residential base.

Household Type
As with age distribution, the trends in types of households have an impact on the demand for dif-
ferent types of housing. Table 5 presents data on the types of households in the Market Area in
1990 and 2000. Family households include married-couple families with children (so-called
"traditional" families), married couples without children (mostly empty nesters, but also young
married couples who have not yet had children or will never have children), and other-family
households (single parents and unmarried couples with children). Non-family households in-
clude people living alone and roommates (unrelated individuals living together, including unmar-
ried couples without children). The following are key findings from the table.
4 During the 1990s, the greatest growth among family households in the Market Area was
married couples without children, which grew by 740 households (21%). Married couples
without children include empty-nesters and younger couples without children, both of whom
are a market for multifamily housing.
4 There were 1,600 non-family households in the Market Area in 2000. This includes 1,130
people living alone and 460 roommate households. Roommate households consist of unre-
lated people living with each other to share housing costs and also unmarried couples with-
out children. Roommate households had the highest percentage of growth during the 1990s,
increasing by 67%. These people tend to be younger and often prefer to live in locations
that are closer to shopping, employment, entertainment, and activities. Within the Market
Area, Downtown Grand Rapids could be one of the most highly desirable locations for these
roommate households.
4 People living alone are also a strong market for housing in Downtown Grand Rapids, as sen-
iors comprise a significant portion of people living alone and they often value housing lo-
cated near shopping and services. This group increased by 26% between 1990 and 2000.
4 The increased diversity of household types in the Market Area as highlighted in Table 5 is
creating a need for a wider range of housing options. For example, non-family householders
tend to rent their housing, as this category includes many elderly widows as well as young
people. Young people typically do not have sufficient incomes to purchase housing, while
single seniors are more likely to move to multifamily housing to shed the burden of home
maintenance and increase opportunities for socialization. The household base is projected to
continue diversifying over the next decade, creating increased demand for multifamily hous-
ing options.

TABLE 5
HOUSEHOLD TYPE
1990 & 2000
Family Households Non-Family Households
Total HH's Married w/ Child Married w/o Child Other * Living Alone Roommates**
1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000
Number of Households
Grand Rapids 3,246 3,446 740 533 902 896 464 513 1,024 1,314 116 190
Remainder of Market Area 7,656 8,960 2,433 2,260 2,671 3,417 738 931 1,579 1,955 235 397
Market Area Total 10,902 12,406 3,173 2,793 3,573 4,313 1,202 1,444 2,603 3,269 351 587
Percent of Total
Grand Rapids 100.0 100.0 22.8 15.5 27.8 26.0 14.3 14.9 31.5 38.1 3.6 5.5
Remainder of Market Area 100.0 100.0 31.8 25.2 34.9 38.1 9.6 10.4 20.6 21.8 3.1 4.4
Market Area Total 100.0 100.0 29.1 22.5 32.8 34.8 11.0 11.6 23.9 26.4 3.2 4.7
Change
No. Pct. No. Pct. No. Pct. No. Pct. No. Pct. No. Pct.
Grand Rapids 200 6.2% -207 -28.0% -6 -0.7% 49 10.6% 290 28.3% 74 63.8%
Remainder of Market Area 1,304 17.0% -173 -7.1% 746 27.9% 193 26.2% 376 23.8% 162 68.9%
Market Area Total 1,504 13.8% -380 -12.0% 740 20.7% 242 20.1% 666 25.6% 236 67.2%
* Single-parents and unmarried couples with children
** Includes unmarried couples without children and group quarters
Sources: U.S. Census Bureau; Maxfield Research Inc.

Demographic Summary
Key points from the demographic analysis follow.
4 Between 2000 and 2010, the City of Grand Rapids is expected to add over 4,100 people
(53%) and about 2,000 households (57%). Much of this growth is from an annexation by
the City of nearly all of Grand Rapids Township in phases over the 2005 to 2010 period.
The Market Area is projected to add 2,271 persons (7%), with an increase of over 1,000
households (8%) between 2000 and 2010.
4 Much of the growth occurring outside the City of Grand Rapids will be driven by the de-
mand for lake shore property.
4 During the 2000s, the 55-to-64 age cohort is expected to see the largest increases in popula-
tion, as the leading edge of the baby boomers age into their late 50s and early 60s. In the
Market Area, this age cohort is expected to increase by 43%.
4 The household growth is projected to be driven by households who are the market for multi-
family housing. Households ages 25 to 34 typically are looking for rental options and may
consider housing in Downtown. Households ages 55 to 65 have higher incomes and desire
maintenance-free options. Households ages 65 and older may consider age-restricted hous-
ing or may prefer general-occupancy housing that is maintenance free.

EMPLOYMENT ANALYSIS
Introduction
Employment trends are a reliable indicator of housing demand as employment growth generally
fuels household growth. Typically, households prefer to live near work for convenience. How-
ever, if housing is less expensive in smaller towns, commuting from outlying communities to
work in larger employment centers is attractive for households concerned about housing afforda-
bility. Recent employment growth trends for the Market Area are shown in Tables 6 and 7.
Covered Employment
Table 6 presents covered employment in Itasca County in 2000 and 2005. Covered employment
data is calculated as an annual average and reveals the number of jobs in the County, which are
covered by unemployment insurance. Most farm jobs, self-employed persons, and some other
types of jobs are not covered by unemployment insurance and are not included in the table. The
data was compiled by the Minnesota Workforce Center of the Department of Employment and
Economic Development (DEED).
TABLE 6
COVERED EMPLOYMENT BY INDUSTRY
ITASCA COUNTY
2001 to 2005
Employment Change
2001 2005 2001-2005
No. Pct. No. Pct. No. Pct.
Natural Resources, Mining 652 4.1 558 3.5 -94 -14.4
Construction 804 5.1 931 5.8 127 15.8
Manufacturing 1,637 10.4 1,380 8.6 -257 -15.7
Trade,Transportation, Utilities 4,424 28.1 4,452 27.7 28 0.6
Information 144 0.9 233 1.5 89 61.8
Financial Activities 419 2.7 474 3.0 55 13.1
Education/Health Services 3,605 22.9 3,927 24.5 322 8.9
Services1 764 4.8 661 4.1 -103 -13.5
Leisure and Hospitality 2,100 13.3 2,096 13.1 -4 -0.2
Public Administration 1,212 7.7 1,333 8.3 121 10.0
Total 15,761 100.0 16,045 100.0 284 1.8
1
Services includes business services and all other services not included in Education and Health Services.
Sources: Minnesota Dept. of Employment and Economic Development; Maxfield Research Inc.
4 Between 2000 and 2005, Itasca County added 284 jobs for a 1.8% increase for a total of
16,045 jobs in Itasca County in 2005.

EMPLOYMENT ANALYSIS
4 Three sectors dominated the employment in the County in 2005 – Trade, Transportation and
Utilities with 4,452 jobs, Education and Health Services with 3,927 jobs, and the Leisure
and Hospitality sector with 2,096 jobs. These three sectors also dominated in 2001.
4 Employment losses in Itasca County between 2001 and 2005 were seen in the Manufactur-
ing sector with a loss of -257 jobs (-16%), Natural Resources and Mining sector with a loss
of -94 jobs (-14%), and Services with a loss of -103 jobs (-14%).
4 The largest percentage increases in employment in Itasca County between 2001 and 2005
were the Information sector (+62%), Financial Activities (+13%), Public Administration
(+10%), and Education and Health Services sector (+9%).
4 In the last year, the area saw two significant employment events. First, Ainsworth Lumber
closed its Grand Rapids OSB plant, laying-off 150 employees. Second, Grand Itasca Clinic
and Hospital announced that up to 10% of its workforce would be laid off prior to the hospi-
tal’s move to its new location.
Resident Employment
Table 7 presents resident employment data for Itasca County from 2000 through 2005. Resident
employment data is calculated as an annual average and reveals the work force and number of
employed persons living in the County. It is important to note that not all of these individuals
necessarily work in the County. The data is from DEED.
TABLE 7
ANNUAL AVERAGE RESIDENT EMPLOYMENT
ITASCA COUNTY
2000 to 2005
Unemploy- Comparative Rates
Year Labor Force Employment ment County MN USA
2005 22,784 21,447 1,337 5.9% 4.0% 5.1%
2004 23,152 21,456 1,696 7.3% 4.6% 5.6%
2003 22,864 21,160 1,704 7.5% 4.9% 6.0%
2002 22,931 21,486 1,445 6.3% 4.6% 5.8%
2001 22,474 21,048 1,426 6.3% 3.9% 4.7%
2000 21,641 20,416 1,225 5.7% 3.1% 4.0%
Change 2000-2005
No. 1,143 1,031 112 0.2% 0.9% 1.1%
Pct. 5.3% 5.0% 9.1% N/A N/A N/A
Sources: MN Workforce Center; Maxfield Research Inc.

EMPLOYMENT ANALYSIS
4 The number of employed residents and number of residents in the labor force has increased
by five percent in Itasca County between 2000 and 2005. The labor force increased 5.3%,
while the employment increased 5%.
4 The County experienced an increase in number of unemployed residents between 2000 and
2005 by 112 persons (0.2%), after seeing rates of over 7% in 2003 and 2004. Itasca County,
with an unemployment rate at 5.9% in 2005, has consistently had a somewhat higher unem-
ployment rate than the State (4.0%) and the national rate of (5.1%).
Economic Development Projects in the Grand Rapids Area

The following bullet points outline large proposed business expansions in the Grand Rapids
Market Area and the area surrounding in the next few years.
4 Blandin expansion. Discussed previously, Blandin is waiting on federal and corporate ap-
provals to begin an expansion that would increase paper production at the plant from
450,000 tons per year to 760,000 tons per year. The proposed expansion is projected to
bring 27 permanent new jobs, with hundreds of temporary jobs created through the three-
year construction process.
4 Mesaba Energy Project. Excelsior Energy’s $2 billion coal gasification project, to be lo-
cated near Taconite, is awaiting a decision from the state’s public utilities commission in
2007. Recent news on the proposal suggests that Excelsior Energy may have to rework its
proposal due to some pollution control concerns. Excelsior Energy officials said the project
would create 107 permanent jobs, in addition to the construction jobs created. Excelsior En-
ergy is projecting that construction would begin in 2008 for a completion date of 2011.
4 Minnesota Steel. At a site near Nashwauk, Minnesota Steel has proposed the first complex
in North America to include iron mining, ore processing and steelmaking on a single site. If
completed as proposed by 2009, the $1.6 billion project would produce up to 2.5 million
tons of steel products each year and employ up to 700 people. The Minnesota Land Ex-
change Board recently approved a 7,800-acre land swap giving Minnesota Steel the land it
needs to move forward.
4 Worthington Aviation. This aircraft maintenance company is considering an expansion of

its facility at the Grand Rapids-Itasca County Airport. The company is considering adding
dozens of high paying jobs at the facility.
4 Wal-Mart Supercenter. City officials approved a conditional use permit in December

2006 for a new Wal-Mart store to be located at the intersection of Highway 169 and 29th
Street SE. The new 183,000-square-foot store replaces an existing store located north of this
site on Highway 169. Employment increases as a result of the new store are expected to be
relatively small.

EMPLOYMENT ANALYSIS
4 Mesabi Nugget project cancelled. In November 2006, Cleveland Cliffs cancelled a pro-
posed high iron nugget production facility in Hoyt Lakes. The company said that they were
unable to complete agreement on some key economic and commercial arrangements to
make the product viable. Economic development officials had estimated that the project
would have created 100 new permanent jobs, in addition to construction jobs created.
Interviews
Maxfield Research Inc. interviewed employers, business leaders, and other sources familiar with
the employment market in the Grand Rapids Market Area. Key findings from these interviews
follow.
4 The economy of the area is dominated by a few larger industrial employers, such as Blandin
Corporation and Minnesota Power, with many small employers, typically in services indus-
tries.
4 Many of the larger employers will see a good deal of turnover in their workforces in the next
few years as older workers retire. An aging workforce means that there will be a good deal
of turnover in some companies that tend to have older workers, providing good opportuni-
ties to residents who have the training and skills for these positions. In addition, these em-
ployers will have to attract new workers to the area.
4 Several sources said that new workers will have to be attracted back to the area to fill the
jobs left by these retiring workers. “Boomerang Kids,” as they are called, are people who
move away from the area after high school to work in other cities but who would come back
if the right jobs are available.
4 There is a perception that even if the jobs go to the communities northeast of Grand Rapids,
people who accept these jobs would prefer to live in Grand Rapids.
4 One economic development official said that the school district expects one-third of teachers
to retire in the next few years. The area will need to attract teachers to fill these jobs and
these teachers will need appropriate housing.
4 One source said that it is time for the community leaders to become more aggressive in de-
veloping housing and redeveloping the Downtown. That person said that he felt the market
is there but the community has not worked to resolve the challenges.
4 Another source said that there will be additional demand for housing to employ new work-
ers. However, due to the costs of redevelopment in Downtown, it may be more cost effec-
tive to develop new rental housing elsewhere.
4 One source said that the aging of the population combined with a need for workers to re-
place aging workers means there will need to be new housing across the spectrum of hous-
ing types.

EMPLOYMENT ANALYSIS
Summary of Employment Analysis

Key points from the employment analysis follow.
4 Three sectors dominate the employment in the Grand Rapids area – Trade, Transportation
and Utilities, Education and Health Services, and the Leisure and Hospitality sector.
4 Several significant employment developments are proposed in the area. All of these would
increase the number of permanent jobs in the area, with most of them higher-wage jobs. In
addition, all of the projects would provide a one-time increase in employment, due to the in-
crease demand for construction jobs.
4 An aging workforce in the area means that there will be increased opportunities for younger
workers who will be needed to replace these workers. This trend will drive demand for a
spectrum of housing options that would serve single workers, families, and seniors.

FOR-SALE MULTIFAMILY MARKET ANALYSIS
Introduction
This section of the report presents our analysis of the market potential for for-sale multifamily
housing in Downtown Grand Rapids. Data on the current market conditions for housing in the
Grand Rapids Market Area are analyzed. Combined with the review of demographic and growth
trend data in the previous section, this data will be utilized to project demand for different types
of housing in Downtown.
Market Area Home Sales
It is expected that households purchasing new residential housing will use the equity proceeds
from the sale of their homes (or interest earned on these proceeds) to help pay for a home. For
for-sale senior housing, seniors will often use the proceeds of a home sale dollar for dollar to pay
for the cost of a new residence. For age-restricted rental housing, seniors will often use a portion
or perhaps all of their proceeds to fund a monthly income to support the costs of alternative
housing. In order to understand the extent of proceeds that seniors may be able to derive from
the sale of their homes, we examined recent home sale data, compiled by the Itasca County As-
sessor and the Itasca County Board of Realtors. Table 8 presents data on home values.
4 In 2006, the average home resale price in the Grand Rapids Market Area was about
$138,000. The average resale price as a whole has increased steadily since 1998, with prices
increasing over 6% each year, except in 2003, when there was a -2% decrease.
TABLE 8
RESIDENTIAL RESALES
1998 - 2006
Median % Average %
Year Sale Price chg. Sale Price chg.
1998 $57,450 -- $70,922 --

1999 $67,799 18% $79,101 12%
2000 $73,000 8% $89,552 13%
2001 $81,000 11% $98,405 10%
2002 $85,000 5% $110,512 12%
2003 $92,000 8% $108,492 -2%
2004 $94,900 3% $115,396 6%
2005 $107,530 13% $128,533 11%
2006 $110,833 3% $138,041 7%
Sources: Itasca County Assessor; Maxfield Research Inc.

4 The median home resale price in the Grand Rapids Market Area has increased in every year
since 1998. The largest percentage increase was in 1999, at (18%). In 2005, there was a
13% increase.
4 The primary market for for-sale housing in Downtown would be senior buyers. If a Market
Area senior sold their home for 93 percent of the median sold price in the Grand Rapids
Market Area in 2006 ($110,800), a monthly return of roughly $345 could be contributed to
fees for senior housing (sale price minus 7% Realtor fees and a 4% annual return on their
investment). If a senior owned their home outright (which according to the American Asso-
ciation of Retired Persons (AARP) 85% of senior homeowners do), the sale proceeds could
cover a portion of their monthly rent.
For-Sale Multifamily Market Situation

In order to review the potential market for for-sale housing in Downtown Grand Rapids, Max-
field Research Inc. identified four projects actively marketing similar to for-sale multifamily
housing that could be developed at the redevelopment sites. Due to space issues at the redevel-
opment sites, for-sale multifamily homes would most likely be single- or multi-level townhomes
or condominiums.
In essence, the competitive for-sale market in the Market Area can be separated into distinct
groups – single-level homes marketed to seniors or lower-price point homes sold to low- and
moderate-income households. There is really very little overlap between products and markets.
The projects identified represent the current market of these types of homes.
No condominium projects were identified in the Market Area. The projects identified consist of
one attached twin-home development, two detached patio home developments, and one afford-
able multilevel, detached development. All of these projects are in the City of Grand Rapids.
Key points follow.
4 The three market-rate projects currently marketing consist of 50 units. Of those units, 18
(36%) have sold. The affordable project consists of 21 units. Of those, three units (14%)
have sold.
4 Because they are primarily marketed to higher-income senior buyers, market rate units are all
single level with between two and three bedrooms. The sizes range between 1,200- and
1,700-square feet.
4 The affordable units are marketed to low- and moderate-income family households. These
two- and three-bedroom units often have more than one level. In order to keep these units af-
fordable, the size of the units range from between 950- and 1,000-square feet, not including
the unfinished basement.

TABLE 10
UNIT MIX, SIZES, PRICES & ABSORPTION
COMPETITIVE ACTIVE FOR-SALE DEVELOPMENTS
DECEMBER 2006
Project Name/ Year No of Units Unit Square Base Price Per

Location Opened Units Sold Type Feet Pricing Square Foot
Market Rate
Pine Ridge Estates 2005 28 5 2BR 1,550 $218,800 - $229,900 $141 - $148
Single-Level 3BR 1,700 $239,900 $141
Detached Homes
Grand Rapids
(3rd Phase)
Crystal Lake Estates 2005 10 2 2BR & 3BR 1,200 - 1,500 $164,900 - $179,900 $120 - $137
Patio Homes
Grand Rapids
Twin Pine Villas 2003 12 11 2BR 1,700 $230,000 $135
Twinhomes
Grand Rapids
Affordable
Crystal Lake Estates 2005 21 3 2BR & 3BR 950 - 1,000 $138,000 - $145,000 $145 - $145
Multilevel Single Family
(Affordable)
Grand Rapids

4 The market-rate for-sale homes range in price from $164,900 to $239,900, or between $120
and $148 per square foot. The affordable homes range in price from $138,000 to $145,000,
or $145 per square foot. Affordable homes are income-restricted based on guidelines from
the Greater Minnesota Housing Fund.
4 Based on interviews and estimates, market-rate units have been absorbing at between one
unit per three months and one unit per four months. Interviews suggested that absorption has
slowed recently and that earlier phases sold at a more rapid rate.
4 Affordable homes have absorbed at slower rates. Interviews suggested that it has been diffi-
cult to find buyers for these homes. One Realtor said that even with the lower-price points,
buyers have to stretch to make the payments.
Pending For-Sale Multifamily and Affordable Developments

Maxfield Research Inc. contacted city officials to determine any pending competitive for-sale
housing developments. Two projects were identified.
4 On the former East Clinic site in Grand Rapids, Steve Gilbertson is proposing six to nine
units of affordable housing. His proposal is combined with a proposal for 20 units of in-
come-restricted general-occupancy rental townhomes. The development is pending, await-
ing the outcome of a Tax Increment Finance proposal tied to the site.
Twin Pine Villas – a market-rate for-sale development.

4 The developer of Twin Pine Villas has plans to develop ten more twinhomes adjacent to the
current development. The homes would be similar to the homes currently marketing. The
developer is currently working with the City to get approval.
Interviews
Maxfield Research Inc. interviewed Realtors and others familiar with the for-sale multifamily
market. Key points from the interviews follow.
4 One Realtor said that seniors, the typical buyers of association-maintained homes, want to
“trade a house for a house.” They do not want to have a house payment at all. Most of these
homebuyers already have an existing home and they have the time to wait for the right home
to come along.
4 Townhome and other association-maintained home buyers often balk at the association fee,
which is typically around $100 per month. They perceive this monthly fee as an unknown
cost. If given a preference, many buyers choose not to organize an association and set up in-
formal maintenance relationships with neighbors and service providers.
4 One Realtor who sells affordable homes said that, even with the subsidy, income-qualified
buyers often have difficulty making the numbers work for affordable for-sale housing. The
price points may still be too high for many buyers.

4 Many income-qualified buyers ultimately purchase an existing home over new construction
because the monthly payments are more reasonable. However, one Realtor suggested that
these buyers are not taking maintenance and energy costs into account and may ultimately
become overextended.
4 One Realtor suggested that the size of the redevelopment blocks will make it difficult to de-
velop townhomes. Because of the space limitations, it will be difficult to develop single-
level townhomes that appeal to senior and empty-nester buyers. And the most likely buyer
of multi-level townhomes would be families. These buyers would most likely prefer town-
homes that have yards.
4 Although not age-restricted, the twinhome style is appealing to buyers in their 70s. These
buyers are attracted to the open single-level floor plans.

RENTAL MARKET ANALYSIS
Introduction
This section of the report presents our analysis of the market potential for rental housing in
Downtown Grand Rapids. Both market-rate and affordable rental housing in the Grand Rapids
Market Area are analyzed.
Rental Market Situation

Table 10 shows competitive market-rate and subsidized/affordable general-occupancy rental pro-
jects in the Grand Rapids Market Area. The table includes year built, number of units, current
vacancies, and rents. Key points from the table follow.
4 Maxfield Research Inc. identified 24 competitive rental projects with 600 units. Over half of
those units (334 units) are subsidized or affordable.
4 We identified seven vacant market-rate units and three vacant subsidized/affordable units.
The vacancy rate for market-rate units is 3% and the vacancy rate for subsidized/affordable
units is 1%. In general, a 5% vacancy rate is considered a healthy vacancy rate for market-
rate units – maintaining rents and providing enough units for adequate selection and turnover.
For subsidized units, the stabilized vacancy rate is considered to be 2%. These low vacancy
rates suggest that there is demand for rental units in the market.
4 Rents at the market-rate projects range from $420 for a one-bedroom unit at Southside Ter-
race to $930 for a three-bedroom unit at Forest Park West. Rents at affordable projects
range from $425 for a one-bedroom unit at Parkwood Apartments to $599 for a three-
bedroom townhome at Oakwood Terrace Townhomes.
4 Rents at market-rate projects do not differ greatly from rents at affordable projects.
4 Only five rental projects have been built since 1990. Only one of those, Forest Park West, is
market rate. (Forest Park West is not, strictly speaking, market rate. The Grand Rapids
HRA, which financed the project, has set rents below market rate to create more affordable
housing opportunities. However, for purposes of this analysis, we define the project as mar-
ket rate because there is no income requirement.)
Pending Rental Developments

Maxfield Research Inc. interviewed city housing officials and identified one pending rental hous-
ing project. On the former East Clinic site in Grand Rapids, Metroplains Development is ex-
pected to develop 20 units of income-restricted general-occupancy rental townhomes. The de-
velopment is pending, awaiting the outcome of a Tax Increment Finance proposal tied to the site.
The site would also include six to nine affordable single-family for-sale homes to be developed
by Steve Gilbertson.

TABLE 10
COMPETITIVE GENERAL-OCCUPANCY RENTAL PROJECTS
DECEMBER 2006
Year No. of No. Monthly Tenant
Project Name Opened Units Vac. Unit Mix Rents/Fees Profile Comments
Market Rate
Forest Park West 1994 36 0 8 - 1 BR $630 More Seniors Rent includes heat and garage. Ten- to
650-710 - 20th Avenue NW 8 - 1 BR + D $780 than families 15-name waiting list.
Grand Rapids 16 - 2 BR $835
4 - 3 BR $905
Pine Ridge Apartments 1978 40 0 2 - 1 BR $450 Range of Ages No utilities included, garage $40/mo.,
620 River Road 38 - 2 BR $520 Community room, playground, usually
Grand Rapids full. 50-name waiting list at entire
project.
Country Terrace 1977 24 2 2 - 1 BR $520 Mainly seniors Common laundry, no utilities included
Apartments 22 - 2 BR $590 - $670 ranges in the rent, decks. Garage: $30.
501- 10th Street SE Waiting list for first floor. Available
Grand Rapids units on 2nd floor.
Birchwood Apartments Mid- 67 0 3 - Effic. N/A N/A Would not share information.
2101 Pokegama Ave. SW 1970s 16 - 1 BR
Grand Rapids 48 - 2 BR
Grand Terrace 1960 23 0 12 - 1 BR $530 Mostly seniors Common laundry, no utilities, garages
Apartments 11 - 2 BR $575 included. Usually full.
401 SE 10th Street
Grand Rapids
Oakland Estates 1950 11 NA 11 - Effic. NA Mostly lower income No amenities, feels there is a need for
400 Itasca Street people or people on housing at this price. No waiting list.
Grand Rapids SSI
Continued

TABLE 10
DECEMBER 2006
(Continued)
Market Rate (Continued)

Southside Terrace 1950s 15 0 9 - 1 BR $420 Some seniors, a Rent includes utilities, garage is
613 1st Ave SE 6 - 2 BR $480 range of ages available for $75/mo. Usually stays
Grand Rapids full, do not keep a waiting list, just
advertises when there is a vacancy.
Hillside Apartments N/A 8 NA 8 - 1 BR NA Mix of ages No laundry facilities, rent includes heat,
414-420 1st Ave SW street parking. Stays full- no waiting
Grand Rapids list.
Edgewood Estates 1997 18 0 6 - 1 BR $575 70% Seniors, the rest Community room, garages for $35/mo.
120 NW 5th Street 12 - 2 BR $675 younger tenants Rent includes heat. No elevator.
Cohasset Seniors on first and second levels tend
to stay for long periods, younger people
turnover more.
Greenwood Apartments 1976 16 5 2 - 1 BR $475 Mix of Ages Common laundry facilities, off-street
211 McClean Avenue 14 - 2 BR $525 parking. Recently has seen more
Coleraine vacancies
Bank Apartments N/A 8 NA 1 - 1 BR N/A Mix of Ages Would not share rent information.
301 2nd Street 4 - 2 BR N/A Mostly younger Above American Bank. 4 Detached
Bovey 3 - 3 BR N/A garages for rent, common laundry room.
Total Market-Rate Units 266 7 2.9% *

Continued

TABLE 10
DECEMBER 2006
(Continued)
Subsidized and Affordable
Oakwood Terrace 2005 24 0 12 - 2 BR $469 Mainly families Management and on-site caretaker, Coin
Townhomes III 12 - 3 BR $599 Some singles operated laundry, Attached garage
11th Avenue NE included, Central air, Playground area.
Grand Rapids 6 to 12 month waiting list.
Oakwood Terrace 1999 24 0 8 - 2 BR $515 Mix of ages Management and on-site caretaker, Coin
Townhomes II 8 - 2 BR flats $515 Some Seniors operated laundry, Attached garage
11th Avenue NE 8 - 3 BR $575 included, Central air, Playground area.
Oakwood Terrace 1997 24 0 12 - 2 BR $515 Mainly families Management and on-site caretaker, Coin
Townhomes I 12 - 3 BR $575 Some singles operated laundry, Attached garage
11th Avenue NE included, Central air, Playground area.
Woodland Manor Apartments 1991 24 0 10 - 1 BR $490 Families Coin-operated laundry, playground area,
1452 SE 2nd Avenue 2 - 2 BR $520 parking with plug-ins. Rent includes
Grand Rapids 12 - 3 BR $560 heat. Short waiting list- though
growing.
Continued

TABLE 10
DECEMBER 2006
(Continued)
Subsidized and Affordable (Continued)

Pokegama Square III 1988 20 NA 11 - 1 BR 30% AGI Mix of all ages Coin-operated laundry, elevators,
410 SE 7th Street 9 - 2 BR Families, Students playground, garages for $30/mo.,
Grand Rapids Some Seniors handicap accessible units. Over 60
names for all units. Shared with
Pokegama Square I & II.
Pokegama Square II 1985 16 NA 1 - 1 BR 30% AGI Mix of all ages Coin-operated laundry, elevators,
Pokegama Square 1983 24 NA 16 - 2 BR 30% AGI Mix of all ages Coin-operated laundry, elevators,
Crystal Lake Townhouses 1981 48 0 24 - 2 BR 30% AGI Single mothers Coin-operated laundry, laundry hook-
203 NW 14th Street 24 - 3 BR ups in each unit, AC Sleeves, two
Grand Rapids playgrounds, garage $15/mo., utilities
not included. No waiting list.
Pine Ridge Apartments 1978 20 1 20 - 3 BR 30% AGI Families No utilities included, garage $30/mo.,
620 River Road Community room, playground, usually
Grand Rapids full. 50-name waiting list at entire
project.
Continued

TABLE 10
DECEMBER 2006
(Continued)
Subsidized and Affordable (Continued)

River South Apartments 1972 54 0 27 - 1 BR $420 - $468 Mix of ages All utilities included in rent, Community
501 River Road 2 27 - 2 BR $535 - $596 Room, Laundry facilities
Grand Rapids No elevators
Recently updated; 10 names now
Itasca County HRA 1984 20 0 16 - 1 BR 30% AGI Mix of ages, about Common laundry, Sleeve AC, off-street
Taconite 60% seniors. parking w/plug-ins, no stairs.
3 - 2 BR 30% AGI Families Two-story duplexes, with laundry hook-

1 - 3 BR 30% AGI ups and attached garages.
Waiting lists for all units.
Shared with Calumet Bldg.
Itasca County HRA 1984 20 0 16 - 1 BR 30% AGI Mix of ages, about Common laundry, Sleeve AC, off-street
60% seniors. parking w/plug-ins, no stairs.
Calumet
3 - 2 BR 30% AGI Families Two-story duplexes, with laundry hook-

1 - 3 BR 30% AGI ups and attached garages.
Waiting lists for all units.
Shared with Taconite Bldg.
Parkwood Apartments 1972 16 0 4 - 1 BR $425 Mix of Ages. Common laundry facilities, off-street
303 Dudley Avenue 1980 12 - 2 BR $475 parking
Coleraine Stays full, no waiting list.
Total Subs./Aff. Units 334 3 1.1% *

* Adjusted to account for NA values.
Source: Maxfield Research, Inc.

Woodland Manor – an affordable rental project.
Interviews
Several rental managers and others familiar with the rental market in Grand Rapids were inter-
viewed. The key points from those interviews follow.
4 The rental market in Grand Rapids has been tight in recent years, but could not accommo-
date many additional units. There is no pent up demand for one-bedroom and smaller units.
One manager said if his buildings had five more small units, he doubted that he could keep
them full.
4 Rental units built in Downtown Grand Rapids would have to be very competitive on price.
Many renters would prefer to be closer to lakes and other natural amenities, than in a down-
town area with traffic and businesses.
4 Managers said that rents could be higher than the older units currently marketing in the area,
but lower than other new product.
4 Downtown would not be a good spot for young families who rent. These renters would pre-
fer locations than offer more green space for children.
4 HRA administrators said that the greatest rental needs, from the perspective of the rental
voucher program, are families and disabled individuals. These households are having the
most difficult time finding affordable housing.

4 Traditionally, rents have not been high enough to generate new investment in rental proper-
ties. As such, vacancies have remained relatively low, but without resulting in rent in-
creases.
4 One landlord, when asked about vacancy trends, said, “The market is favorable to the land-
lord.”
4 One manager said that there is a market for newer market-rate rental that could achieve rents
higher than in the current market. However, that manager said he did not think such rents
could be achieved at a property in Downtown Grand Rapids.

INDEPENDENT SENIOR HOUSING MARKET ANALYSIS
Introduction
This section provides an overview of contemporary senior housing products and assesses the cur-
rent supply and market conditions for comparable senior housing products in the Grand Rapids
Market Area. Finally, this section addresses any pending senior housing developments that may
impact demand for additional product.
The Evolution of Senior Housing Alternatives

While nursing homes have been around for several decades, development of housing specifically
for the elderly emerged in the 1960s, with large-scale construction of rental housing for low-
income seniors occurring in the 1970s. Funded by the Federal Government, these projects of-
fered housing to seniors with low and moderate incomes. Rents were based on the adjusted
gross household income (AGI) and the housing product was very basic, offering few, if any
amenities or services. Many of these older, pre-1980 projects are staying full despite a lack of
amenities and very small units, due, in part, to increasing senior populations. However, given a
choice between a smaller, basic unit in an older building and remaining in their single-family
homes, seniors will often opt to remain in their homes, receiving home health care and other in-
home services.
Seeing a need for alternative housing for seniors with higher incomes, many health care organi-
zations and private developers introduced market-rate senior housing options in the early 1980s,
both rental and for-sale product, primarily in large metropolitan areas. These projects offered a
wide variety of services, although the target market was not necessarily seen as frail seniors.
Based on their cost and the level of support services provided (either optional or included in the
rent), these developments did, however, attract primarily older, less independent residents.
Many non-profit organizations and private developers misread the market, thinking that many
seniors in their 60s and early 70s would move to these projects. Initial success of selected pro-
jects in the early and mid-1980s spurred additional construction, which led to an oversupply in
the late 1980s across the country, especially in large metropolitan areas. Many smaller, rural cit-
ies did not experience this market saturation because there was little or no development of mar-
ket rate senior housing, or there was only one project in the community, which survived by cap-
turing the upper-income, need-driven segment of the senior market.
The most recent trend is the construction of assisted living projects targeted at frail seniors who
need extensive support services, but not the high level of health care offered by a nursing home.
Included in this housing type is “memory care” assisted living housing which is specifically
geared towards individuals suffering from Alzheimer’s or other dementias.

Types of Senior Housing in Today’s Market

For analytical proposes, Maxfield Research Inc. classifies market rate senior housing into four
categories based on the level and type of services offered:
• Active Adult projects (or independent living without services available) are similar to a gen-
eral occupancy apartment building, in that they offer virtually no services but have age-
restrictions (typically 55 or 62 or older). The expansion of senior housing alternatives now
include detached villas, townhomes and apartment-style condominiums in addition to the
more traditional rental building. Organized activities and occasionally a transportation pro-
gram are usually all that are available at these projects. Because of the lack of services,
Adult/Few Services projects typically do not command the rent premiums of more service-
intensive senior housing.
This product has been one of the most popular types of senior housing developed in recent
years because it appeals to seniors who do not need services, but desire to downsize their
housing and/or rid themselves of home maintenance. Often, government entities will provide
development assistance or own the project outright (rental formats) in exchange for reserving
a portion of the units for seniors with moderate incomes. These income limits are frequently
very liberal, allowing the vast majority of senior households to qualify for residency.
• Congregate projects (or independent living with services available) offer support services
such as meals and/or housekeeping, either on an optional basis or a limited amount included
in the rents. These projects typically dedicate a larger share of the overall building area to
common areas, in part, because the units are smaller than in adult housing and in part to en-
courage socialization among residents. Congregate projects attract a slightly older target
market than adult housing, typically seniors age 75 or older. Rents are also above those of
the Adult/Few Services buildings, even excluding the services. Sponsorship by a nursing
home, hospital or other health care organization is common.
• Assisted Living facilities come in a variety of forms, but the target market for most is gener-
ally the same: very frail seniors, typically age 80 or older (but can be much younger, depend-
ing on their particular health situation), who are in need of extensive support services and
personal care assistance. Absent an assisted living option, these seniors would otherwise
need to move to a nursing facility. At a minimum, assisted living projects include two meals
per day and weekly housekeeping in the monthly fee, with the availability of a third meal and
personal care (either included in the monthly fee or for an additional cost). Assisted living
facilities also have either staff on duty 24 hours per day or at least 24-hour emergency re-
sponse.
Some projects offer self-contained dwelling units similar to a less service-intensive senior
apartment building with full kitchens and spacious rooms. Projects offering kitchens in the
units may include only two meals per day while those without kitchens in the units generally
provide three meals per day. Other projects do not have kitchens and are merely updated
versions of board-and-care facilities with sleeping units and communal living spaces.

Monthly fees vary depending on the number and type of services included, and the size of the
units, but most facilities have fees starting at roughly $2,000 per month.
• Memory Care facilities, designed specifically for persons suffering from Alzheimer’s disease
or other dementias, is one of the newest trends in senior housing. Projects will consist mostly
of suite-style or studio units or occasionally one-bedroom apartment-style units, and large
amounts of communal areas for activities and programming. In addition, staff typically un-
dergoes specialized training in the care of this population. Because of the greater amount of
individualized personal care required by residents, staffing ratios are much higher than tradi-
tional assisted living and thus, the costs of care are also higher. Typical monthly fees for
memory care units start at about $3,000 per month. Unlike conventional assisted living,
however, which deals almost exclusively with widows or widowers, a higher proportion of
persons afflicted with Alzheimer’s disease are in two-person households. That means the de-
cision to move a spouse into a memory care facility involves the caregiver’s concern of in-
curring the costs of health care at a special facility while continuing to maintain their home.
• Skilled Nursing Care, or long-term care facilities, provides a living arrangement that inte-
grates shelter and food with medical, nursing, psychosocial and rehabilitation services for
persons who require 24-hour nursing supervision. Residents in skilled nursing homes can be
funded under Medicare, Medicaid, Veterans, and HMOs, insurance as well as use of private
funds. Typical daily rates for skilled nursing care beds generally start at about $130 per day.
These facilities are licensed by the State of Minnesota. There is currently a moratorium on
adding nursing home beds in Minnesota which has been in effect for many years. There has
been some shifting of beds among facilities to accommodate geographic areas in the State
where there is greater demand.
The senior housing products available today, when combined with long-term care facilities form
a full continuum of care, extending from virtually a purely residential model to a medically in-
tensive one. Often the services available at these projects overlap with another making these
definitions somewhat ambiguous. In general, “Adult” projects tend to attract younger active sen-
iors, who merely wish to rid themselves of home maintenance; Congregate projects serve inde-
pendent seniors that desire support services (i.e., meals, housekeeping, transportation, etc.) while
Assisted Living projects tend to attract older, frail seniors who need assistance with daily activi-
ties, but not the skilled medical care available only in a Nursing Facility.
CONTINUUM OF HOUSING AND SERVICES FOR SENIORS
Single-Family Townhome or Congregate Apartments w/

Assisted Living Nursing Facilities
Home Apartment Optional Services
Age-Restricted Independent Congregate Apartments w/

Memory Care
Townhomes or Apartments Intensive Services
Fully Independent Fully or Highly

Lifestyle Dependent on Care
Senior Housing Product Type

Assisted living and board and lodging facilities (i.e. board and care) often function similarly and
occasionally offer the same services. The major difference, however, between the two facilities
is the environment. Whereas board and lodging facilities tend to be in an institutional setting, as-
sisted living has capitalized on consumer preferences for a more residential setting with larger
units and a higher level of amenities. The utilization of board and lodging has declined consid-
erably over the last decade with the advent of apartment-style assisted living housing which has
also cut into the demand for long-term care from low case mix residents. In today’s market
situation, board and lodging often do not compete directly with contemporary assisted living fa-
cilities and tend to cater to a less affluent market segment.
Independent Senior Housing Market Analysis

Tables 11 through 13 show competitive independent senior housing in the Grand Rapids Market
Area – both market-rate and subsidized/affordable projects. Table 11 shows the number of units,
vacancies, and rents. Table 12 shows an amenity comparison. Table 13show services provided.
Key points follow.
4 In total, there are 427 competitive senior housing units in the Market Area. Of those, 147
are market rate and 280 are subsidized. We identified one market-rate congregate facility
with 50 units. However, Pleasant Seasons is transitioning to an all assisted living facility.
4 The newest independent project is Colony Square Cooperative – an owner-occupied senior

building built in 2002. Lakeshore Place was built in 1994. The newest senior subsidized
project is Grand Manor. Its three phases were built between 1988 and 1994.
4 Of all the projects identified, there are only two units available, for an overall vacancy rate
of less than 1%. There is one market-rate vacancy and one subsidized vacancy. In general,
a 5% vacancy rate is considered to be a healthy vacancy rate. The vacancy rate among
competitive units suggests that there may be excess demand for independent senior units in
the market.
4 Rents at market-rate units range from $625 to $925 for rent with no services at Lakeshore
Place. At Pleasant Seasons, which offers assisted living services for one resident, rents
range from $1,960 to $2,330. The monthly fee at Colony Square Cooperative ranges from
$665 to $1,065.
4 Monthly rents at subsidized and affordable units range from $440 to $520, or 30% of ad-
justed gross income, depending on the program used to finance the project.
4 With the exception of Pleasant Seasons, which is transitioning into an assisted living facil-
ity, few services are provided at the independent senior projects in the Market Area. Some
projects provide activities, but little else is offered. Other projects have home health and as-
sisted living services available through outside providers, but rents do not include these ser-
vices.

TABLE 11
INDEPENDENT SENIOR PROJECTS
DECEMBER 2006
Project Name Opened Units Vac. Unit Mix Rents/Fees Profile Notes
Market Rate
ADULT/FEW SERVICES
Lake Shore Place 1994 60 0 36 - 1 BR $620 - $640 Seniors 55+, some Waiting list of 15 for one-bedroom,
2300 McKinney Lake Rd. 16 - 1 BR+D $740 couples, Avg age = in and 20 people for two-bedrooms.
Grand Rapids 8 - 2 BR $835 - $925 the 70's
Colony Square Cooperative 2002 37 0 3 - 1 BR $665 - $765 Independent Seniors over Currently there are 16 names on the
1850 SE 2nd Street $28,024 - $32,527 55. Each resident is waiting list.
Grand Rapids 34 - 2 BR $865 - $1,065 required to put down a
$37,704 - $47,160 share cost.
CONGREGATE/SERVICE INTENSIVE
Pleasant Seasons 1984 50 1 20 - 1 BR $1,960 Phasing in to become AL.
2815 Pokegama Avenue S. 26 - 2 BR $2,110 Independent Seniors 55+, Rents include AL services
Grand Rapids 4 - 2 BR + $2,330 mostly women, avg age = for one person. Second person
90, 8 couples pays ala carte.
Subtotal: Market-Rate Independent Units 147 1 0.7%
Subsidized
ADULT/FEW SERVICES
411 Apartments 1970 50 0 49 - 1 BR 30% of AGI Seniors, HC, Disabled, or 5- to 15-person wainting list, shared
411 -7th Street NW 2001 1 - 2 BR Student, Low-income with River Road Apts.
Grand Rapids
River Road Apartments 1980 41 0 40 - 1 BR 30% of AGI Seniors, HC, Disabled, or 5- to 15-person wainting list, shared
401 River Road 1 - 2 BR Student, Low-income with 411 Apartments
Grand Rapids
Continued

TABLE 11
INDEPENDENT SENIOR PROJECTS
DECEMBER 2006
(Continued)
Project Name Opened Units Vac. Unit Mix Rents/Fees Profile Notes
Subsidized (Continued)
Pine Ridge Apartments 1980s 40 0 40 - 1 BR 30% of AGI Seniors 62 years and 7 to 12 month waiting list
620 River Road over, HC, Disabled
Grand Rapids
Bovey Apartments 1978 16 1 15 - 1 BR 30% of AGI Seniors, HC, Disabled Short waiting list.
109 3rd Avenue 1 - 2 BR
Bovey
PHB Apartments 1979 14 0 14 - 1 BR 30% of AGI Seniors 62 years and 7 to 12 month waiting list
Pokegama Hotel Apts. over, HC, Disabled
Grand Rapids
Grand Manor I 1988 40 0 39 - 1 BR $440 Independent Seniors 7 to 12 month waiting list. 31 of 40
215 SW 13th Street 1 - 2 BR $465 requires some services, units subsidized.
Grand Rapids Adults with Disabilities
Grand Manor II 1991 32 0 31 - 1 BR $470 Independent Seniors 7 to 12 month waiting list. 26 of 32
Grand Manor III 1994 24 0 23 - 1 BR $470 Independent Seniors 7 to 12 month waiting list. 20 of 24
Weidener Senior Apartments 1979 23 0 15 - 1 BR 30% of AGI Seniors 55 years and Usually full, no waiting list
116 Silverwood Avenue 8 - 2 BR over, HC, Disabled
Bovey
Subtotal: Subs. Independent Units 280 1 0.4%

Total: Independent Units 427 2 0.5%

TABLE 12
AMENITY COMPARISON
INDEPENDENT SENIOR HOUSING PROJECTS
DECEMBER 2006
Amenities/Features:
r
howe
loset
oom
h
m.
om
orc
nk
m.
/D
r
s
m.
ve
er
erato
Suite
cise R
all
Rm.
-in C
d ry r
en Si
nit W
g Ro
i ty R
-in S
ace/p
e/sto
/Pati
wash
m. R
r. C
ing
y
ge
ar
ig
t
Salon
Kitch
Dinin
Walk
Walk
Stora
Exer
Laun
Rang
Activ
Gues
Balc.
Park
Gam
Com
Terr
In-U
Libr
Dish
Eme
Refr
A/C
Other
Market Rate
Lake Shore Place Y Y Y Y Y Y Y Y N Y Y N Y Y Y N N Y Y Y $40 Incl. Garb. disp., microwave
Colony Square Cooperative N Y Y Y Y Y Y Y S S Y N Y N Y Y N Y Y Y N Incl. Garden plots, gazebo
Pleasant Seasons Y S S S S N N N Y Y Y Y Y Y N Y Y Y N Y N Incl. garage $40/mo.
Subsidized
411 Apartments N N Y Y Y N N N N N Y Y Y Y N N N N N N N Incl.
River Road Apartments N N Y Y Y N N N N N Y Y Y Y N N N N N N N Incl.
Pine Ridge Apartments Y N Y Y Y N N N N N N Y Y N N N N N N N N Incl. Suana, garage $40
Bovey Apartments N N Y Y Y N N N N N N Y Y N N N N N N N N Incl.
PHB Apartments Y N Y Y Y N N N N N N Y N N N N N N N N N N
Grand Manor I N N Y Y Y N N N N Y Y N Y Y N N N N N Y N Incl.
Grand Manor II N N Y Y Y N N N N Y Y N Y Y N N N N N Y N Incl.
Grand Manor III N N Y Y Y N N N N Y Y N Y Y N N N N N Y N Incl.
Weidener Senior Apartments Y N Y Y Y N N N S S Y Y Y N N N N N N Y N Incl.
S = some units

TABLE 13
SERVICES COMPARISON
DECEMBER 2006
Transportation Activities Meal Program Hskpg. Health/Misc.

Market Rate
Lake Shore Place None Provided None Provided None Provided None Provided None Provided
Colony Square Cooperative None Provided None Provided None Provided None Provided None Provided
Pleasant Seasons Provides tickets for Activities 3 meals/day and Weekly housekeeping Nurses on staff during day, on
Arrowhead Blue Bus Director on staff snacks incl. and laundry call 24/7
Subsidized
411 Apartments None provided None povided AL service AL service provider on AL service provider on site
provider on site site
River Road Apartments None provided None povided AL service AL service provider on AL service provider on site
provider on site site
Pine Ridge Apartments None provided None provided. None provided. None provided. None provided.
Bovey Apartments None Provided None provided None provided None provided None provided.
Continued

TABLE 13
SERVICES COMPARISON
DECEMBER 2006
(Continued)
Transportation Activities Meal Program Hskpg. Health/Misc.

Subsidized (Continued)
PHB Apartments None provided None provided None provided None provided None provided.
Grand Manor I None provided Activities None provided None provided None provided
director at GM II
Grand Manor II None provided Activities None provided None provided None provided
Director on staff
Grand Manor III None Provided Activities None provided None provided. None provided.
director at GM II
Weidener Senior Apartments None Provided None Provided None Provided None Provided None Provided

Pending Independent Senior Housing Developments

In order to assess future market conditions for senior housing in the Grand Rapids Market Area,
Maxfield Research interviewed local government officials and housing authorities in the Market
Area regarding planned or proposed senior housing developments in the Market Area. Cur-
rently, there four proposed senior housing developments all within the City of Grand Rapids.
4 East of the former East Clinic site in Grand Rapids, DW Jones is building 62 units of senior
housing. Of this total, about 40 units would be assisted living and about 20 units would be
for physically impaired seniors. This project would not be competitive with the proposed
development because it would not be independent senior housing.
4 Diamond Willow Development, out of Duluth, recently opened two 10-unit buildings of as-
sisted living at Golf Course Road and 11th Avenue. While this project recently opened, it
was not profiled because it is an assisted living facility and would not be competitive with
an independent development in Downtown.
Colony Square Cooperative.
4 There is a proposal for a single-family home at Golf Course Road and Isle View Road to be
expanded and converted into a 14-unit assisted living facility. This property has received a
rezoning to accommodate the assisted living facility with a maximum of 16 units. At this
time, the developer has indicated they will develop only 14 units.

4 In the fall of 2005, Ecumen made a proposal to the Grand Rapids City Council for a senior
development that would include 108 units in a campus-style setting. Of these, 60 would be
market-rate rental (adult, few services or congregate), 30 assisted living, and 18 memory
care units. No applications have been submitted to date. City officials said that this project
has been withdrawn because Ecumen believed there were too many pending projects.
Interviews
Sources familiar with the senior housing market in Grand Rapids were interviewed to help de-
termine the potential market for housing in Downtown Grand Rapids. Key findings from these
interviews follow.
4 The majority of the facilities located in Grand Rapids are assisted living facilities serving
residents with an average age of 80 or older. There are two adult, few services projects, one
for-sale and one rental and one congregate facility, also service-intensive. There are wait
lists are several of the assisted living facilities, most of which are small in size. There are
also waiting lists at the two adult, few services facilities, but many of these residents may
have their names on the waiting list in the event they make a decision to move at a later
time. This is most likely to occur with the rental versus the for-sale facility. Many
adult/few services projects will have a waiting list where many seniors will place their
names on the waiting list considering that several years in the future, they will move.
4 The Grand Rapids area is surrounded by lakes and many seniors have lived on the lakes for
many years. Often those on the lake will not make the move into town until it is absolutely
necessary, typically when they reach the stage where they need services and often, signifi-
cant assistance. In-town seniors are more likely to make the move to an alternate facility or
product that offers them the freedom from home maintenance, but no services. Our previous
needs assessments in communities on the Range identified that seniors are generally reluc-
tant to move from their single-family homes and typically only do so when there is a signifi-
cant change (i.e. death of a spouse) or health concern.
4 Across the Range, there are a number of assisted living, board and care and other types of
service-intensive facilities, but very few adult/few services facilities. The next sizeable
product is usually the single-level twinhome or townhome, most often and ownership prod-
uct.
4 Recently, the Grand Rapids HRA has been considering the development of a second adult,
few services facility, but has not proceeded because high construction and land costs would
result in monthly rents that are at least $200 to $300 per month higher than those at Lake
Shore Place. It is believed that Grand Rapids residents would resist the higher pricing in a
building that offers no services.
4 Most seniors – across incomes – are very price conscious with regards to their housing.
They want to find housing that serves their needs at the best price possible and they are will-
ing to put off moving into age-restricted housing until the right fit comes along.

4 In general, higher income seniors will prefer to live south of town, according to one man-
ager. She said that the retail choices are better along South Pokegama Avenue and that sen-
iors will want to be closer to these services. She said that for senior housing to work in
Downtown, it will have to be very affordable.
4 Independent seniors want to be close to the services and retailers they need. Although most
will use their cars, many will want to be within walking distance of these services.
4 In some ways, Downtown has recently become less desirable for seniors. The manager at
PHB Apartments said that with Ogle’s grocery store was located close by, her building was
very desirable for seniors because of the access to the store and other services Downtown.
Now that Ogle’s has moved, seniors do not consider the location as desirable. The project
still remains generally full.
4 One manager said that there are enough senior projects, especially considering that there are
several new projects coming on line. She said that there is a market for maintenance-free
housing targeted to singles between the ages of 35 and 55. She said this market is currently
not served by the general-occupancy rental market.

CONCLUSIONS AND RECOMMENDATIONS
Introduction
Previous sections examined the demographic and competitive environment for housing in Down-
town Grand Rapids. This section analyzes demand for different housing types and provides rec-
ommendations for targeted redevelopment in Downtown.
Market-Rate Housing Demand Analysis
Demand for Market-Rate General-Occupancy For-Sale Housing
Table 14 presents market-rate for-sale housing demand calculations for the Grand Rapids Market
Area between 2005 and 2015, and the estimated number of units supportable in Downtown
Grand Rapids over this period. The following points summarize our demand calculations.
4 According to projections, the Market Area is expected to grow by 507 households between
2005 and 2010 and by 833 households between 2010 and 2015. Based on homeownership
trends, we estimate that 80% of the demand will be for for-sale housing, resulting in demand
for 406 for-sale units between 2005 and 2010 and 666 for-sale units between 2010 and 2015.
4 Of this growth, 90% of new households wanting to own a home will be income qualified,
providing 365 households seeking for-sale housing between 2005 and 2010. We base this
figure on an analysis the source of demand for new housing. Interviews with affordable
housing developers suggest that there has been limited demand for affordable newly con-
structed homes relative to the demand for market-rate for-sale homes. Income-qualified
buyers are selecting existing homes for purchase because they often can get more space for
their money. We conclude that most of the demand for newly constructed homes will be
market rate.
4 From this figure, we subtract estimated age-restricted for-sale demand in 2005 and 2010,
based on an analysis done in Table 16, which leaves demand for 304 for-sale units between
2005 and 2010 and 596 for-sale units between 2010 and 2015.
4 From this figure, we estimate 40% of demand will be in the City of Grand Rapids. This es-
timate is based on population trends.
4 Based on current absorption trends, we estimate that 75% of new housing units demanded
will be single-family units and 25% will be townhome units between 2005 and 2010. We do
not believe there will be significant demand for condominium units in the Market Area over
the period. This calculation results in demand for 30 townhome units over the period.
4 Between 2010 and 2015, we estimate that 25% will be for townhomes, and 5% will be for
condominium units. This calculation results in demand for 60 townhome units and 12 con-
dominium units over the period.

TABLE 14
PROJECTED DEMAND FOR MARKET-RATE GENERAL-OCCUPANCY FOR-SALE HOUSING
2005 to 2015
2005-2010 2010-2015
Projected new housing unit demand from household growth 507 833
(times) Estimated ownership demand x 80% 80%
(equals) Projected Market Area demand for new for-sale housing units = 406 666
(times) Estimated percent of growth income-qualified for market-rate housing * x 90% 90%
(minus) Demand for age-restricted ownership units - 61 4
(equals) Projected demand for general-occupancy for-sale units = 304 596
(times) Estimated percent of units capturable in City of Grand Rapids x 40% 40%
(equals) Projected study area demand for housing units = 122 238
Town- Condo- Town- Condo-
homes miniums homes miniums
(times) Estimated percent of units by type x 25% 0% 25% 5%
(equals) Estimated demand in the the City of Grand Rapids = 30 0 60 12
(less) Competitive units marketing or pending in the City of Grand Rapids ** - 11 0 0 0
(equls) Total demand for housing in City of Grand Rapids = 19 0 60 12
(times) Estimated percent of demand capturable in Downtown Grand Rapids x 10% - 15% 0% - 0% 10% - 15% 25% - 50%
(equals) Units supportable at Downtown redevelopment sites 2 -3 0 -0 6 -9 3 -6
* Based on an analysis of income projections, absorption trends and interviews with Realtors.
** Includes units actively marketing or under construction and projects likely to move forward.

4 From the 2005 to 2010 estimates, existing and pending units marketing in Grand Rapids are
subtracted, leaving 19 townhome units.
4 The demand figures in Table 12 are for the entire Market Area. Any one location, including
Downtown Grand Rapids, can only capture a portion of the demand. Capture rates for
Downtown Grand Rapids are adjusted based on the strengths and weaknesses of the area,
and the characteristics and target markets of the specific housing type. Most of the adjust-
ments were made based on the interviews conducted with Realtors and others familiar with
the housing market.
4 For townhome units, we estimate Downtown Grand Rapids can capture between 10% and
15% of demand between 2005 and 2015. This estimate results little demand for general-
occupancy townhome units between 2005 and 2010 and between six to nine townhome units
between 2010 and 2015.
4 These estimates are consistent with the interviews with Realtors. Realtors said that the gen-
eral-occupancy townhome market would consist of new young families who will want more
green space than a project in Downtown could offer. In addition, a townhome development
targeted to seniors would be difficult because of the amount of space needed to provide sin-
gle-level townhomes. Most likely, townhomes in Downtown would need to be designed
with multiple levels, a feature older buyers do not want.
4 For condominium units, Downtown Grand Rapids would likely capture some of the demand
for condominium units between 2010 and 2015, as condominium buyers look for projects in
close proximity to retail and services, and are attracted to mixed-use, pedestrian oriented de-
velopment. However, a good deal of the demand for condominiums in the area will be for
lakeshore properties. We estimate that Downtown Grand Rapids could capture between
25% and 50% of demand for condominium units between 2010 and 2015, most likely not
enough to develop a project.
Demand for Market-Rate General-Occupancy Rental Housing
Table 15 shows demand calculations for market-rate general-occupancy rental housing in the
Grand Rapids Market Area for 2005 through 2015, and estimates the number of additional units
supportable in Downtown Grand Rapids over this period. A description of these estimates fol-
lows.
4 As with the demand estimates for for-sale housing, we start with the projected household
growth in the Grand Rapids Market Area between 2005 and 2015. From this growth, we es-
timate 20% will be for rental housing, based on homeownership trends in the Market Area,
resulting in demand for 101 new rental units between 2005 and 2010 and 167 new rental
units between 2010 and 2015.

TABLE 15
PROJECTED DEMAND FOR MARKET-RATE GENERAL-OCCUPANCY
RENTAL HOUSING
2005 to 2015
2005-2010 2010-2015
(times) Estimated rental demand x 20% 20%
(equals) Projected Market Area demand for new rental housing units = 101 167
(times) Estimated percent of growth income-qualified for market-rate housing * x 30% 30%
(minus) Demand for age-restricted rental units - 122 5
(equals) Projected demand for general-occupancy rental units = 0 45
(equals) Projected study area demand housing units = 0 34
(times) Estimated percent of demand capturable in Downtown Grand Rapids x 15% - 25% 25% - 50%
(equals) Units supportable at Site 0 -0 8 - 17

4 Of this growth, it is estimated that 30% of new households wanting to own a home will be
income qualified, providing 30 households seeking market-rate rental housing between 2005
and 2010. We base these estimates on absorption trends, income projections, and interviews
with Realtors and apartment managers.
4 From this demand, we subtract the estimated increase in senior rental demand over these pe-
riods. These figures are determined in Table 16. Subtracting these estimates leaves demand
for no rental units between 2005 and 2010 and 45 rental units between 2010 and 2015.
4 We estimate that 75% of this demand will be in the City of Grand Rapids, based on popula-
tion projections.
4 Between 2010 and 2015, capture rates are expected to be between 25% and 50%, as addi-
tional retail and restaurant uses move into the area. However, it still does not result in
enough demand to justify a stand alone project.
Demand for Market-Rate Independent Senior Housing
Table 16 presents our demand calculations for market-rate independent senior housing in the
Grand Rapids Market Area in 2006 and 2011. The table calculates demand based on senior
households with incomes of at least $25,000 – the annual income needed to afford rents at the
typical independent senior project in the Market Area – as well as households whose incomes
would rise to this level from the sale of a home. The methodology is described below.
4 The potential age/income-qualified base for market rate adult/few services senior housing in
2005 includes all older adult and senior households (age 55+) with incomes of $25,000 or
more, plus households with incomes of between $20,000 and $25,000 who would qualify
with the proceeds from a home sale. We estimate the number of age/income-qualified sen-
ior households in the Market Area in 2006 to be about 4,200 households.
4 Adjusting to include appropriate long-term capture rates for each age cohort (0.5% of house-
holds ages 55 to 64 up to 12.0% of households ages 75 and over in 2006) results in a local
long-term demand potential for approximately 201 market-rate independent senior housing
units in 2006.
4 Additional demand will come from outside the Market Area. We estimate that 25% of the
long-term demand for independent senior housing will be generated by seniors currently re-
siding outside the Market Area. This demand will consist primarily of parents of adult chil-
dren living in the Market Area, individuals who live just outside the Market Area and have
an orientation to the area, as well as former residents who desire to return. Together, the
demand from Market Area seniors and demand from seniors outside the Market Area results
in total demand potential for around 269 independent senior housing units in 2006.

TABLE 16
MARKET-RATE INDEPENDENT SENIOR HOUSING DEMAND
2006 & 2011
2006 2011
Age of Householder Age of Householder
55-64 65-74 75+ 55-64 65-74 75+
# of Households w/ Incomes of >$25,000/$30,000 in 2011 1,882 1,062 845 2,177 1,168 880
(plus) # of Households w/ Incomes of $20-$25k/$25-30k in 2011 + 124 146 218 + 153 141 147
(times ) Homeownership Rate x 91% 88% 71% x 91% 88% 71%
(equals) Potential Market = 113 128 155 = 139 124 104
(equals)Total Potential Market Base = 1,995 1,190 1,000 = 2,316 1,292 984
(times) Potential Capture Rate x 0.5% 6.0% 12.0% x 0.5% 6.0% 12.0%
(equals) Potential Demand = 10 + 71 + 120 = 12 + 78 + 118
Total Local Demand Potential = 201 = 207

(plus) Demand from Outside Market Area (25%) + 67 + 69
(equals) Total Demand Potential = 269 = 276
Rental Owner Rental Owner
(times) Demand for each type of housing x 65% 35% x 65% 35%
(equals) Total demand for each type of housing = 175 94 = 180 97
(minus) Existing Market Area Competitive Units* - 57 35 - 57 35

(equals) Total Market Area Independent Demand Potential = 118 59 = 123 62
(times) Estimated percent capurable by Downtown redevelopment sites x 15% 0% x 15% 0%
(equals) Total Demand at Site = 18 0 = 18 0
* The number of competitive units listed in Table 5 are decreased by 5% to account for the vacancy factor.

4 In 2005, we estimate that 65% of the overall demand for market-rate independent senior
housing is for rental housing, and we estimate the remaining 35% of overall demand towards
market-rate for-sale senior housing, including condominiums and cooperatives. This results
in projected demand for 175 units of market-rate rental housing and 94 units of owner-
occupied housing in the Market Area in 2006.
4 A portion of the demand for each type of senior housing product is being met by existing
projects in the Market Area. Subtracting all units at the existing projects (less a 5% vacancy
factor) results in additional demand for 118 rental independent senior housing units and de-
mand for 59 additional units of for-sale senior housing in 2006.
4 No one location or project can capture all of the market area demand. Based on the location
Downtown Grand Rapids and the orientation of renters/buyers, we project that for-sale hous-
ing in Downtown would capture 15% of total rental demand and 0% of total for-sale de-
mand, or about 18 units of rental housing and no units of for-sale housing in 2006.
4 For the calculations for 2011, we included the pending projects identified along with exist-
ing units. We subtract the existing adult/few services senior housing units (less a 5% va-
cancy factor) from the projected demand based on the 2011 demographic projections.
4 In 2011, this calculation results in demand for about no units of for-sale senior housing and
demand for 18 units of rental housing in Downtown Grand Rapids.
Affordable Housing Demand Analysis
Demand for Affordable General-Occupancy For-Sale Housing
Table 17 presents affordable for-sale housing demand calculations for the Grand Rapids Market
Area between 2005 and 2015, and the estimated number of units supportable in Downtown
Grand Rapids over this period. The following points summarize our demand calculations.
4 We use the same household projections used in previous demand tables. Based on home-
ownership trends, we estimate that 80% of the demand will be for for-sale housing, resulting
in demand for 406 for-sale units between 2005 and 2010 and 666 for-sale units between
2010 and 2015.
4 Of this growth, an estimated 10% of new households wanting to own a home will be income
qualified, providing 41 households seeking for-sale housing between 2005 and 2010.
4 From this figure, we estimate 90% of demand will be in the City of Grand Rapids. This es-
timate is based on population trends.

TABLE 17
PROJECTED DEMAND FOR AFFORDABLE GENERAL-OCCUPANCY FOR-SALE HOUSING
2005 to 2015
2005-2010 2010-2015
(times) Estimated ownership demand x 80% 80%
(times) Estimated percent of growth income-qualified for affordable housing * x 10% 10%
(equals) Projected study area demand for housing units = 37 60
Town- Condo- Town- Condo-
homes miniums homes miniums
(times) Estimated percent of units by type x 10% 0% 10% 0%
(equals) Estimated demand in the the City of Grand Rapids = 4 0 6 0
(less) Competitive units marketing or pending in the City of Grand Rapids ** - 0 0 0 0
(equls) Total demand for housing in City of Grand Rapids = 4 0 6 0
(times) Estimated percent of demand capturable in Downtown Grand Rapids x 50% - 100% 0% - 0% 50% - 100% 50% - 75%
(equals) Units supportable at Downtown redevelopment sites 2 -4 0 -0 3 -6 0 -0
** Includes units actively marketing or under construction and projects likely to move forward.

4 Based on current absorption trends, we estimate that 90% of new affordable housing units
demanded will be single-family units and 10% will be townhome units between 2005 and
2010. We do not believe there will be significant demand for affordable condominium units
in the Market Area over the period. This calculation results in demand for four affordable
townhome units over the period. This is consistent with our research that has shown afford-
able townhomes have been somewhat difficult to market to the income-qualified families,
who prefer single family homes.
4 Between 2010 and 2015, the calculation results in demand for four affordable townhome
units and no affordable condominium units over the period.
4 Capture rates for Downtown Grand Rapids are adjusted based on the strengths and weak-
nesses of the area, and the characteristics and target markets of the specific housing type.
Most of the adjustments were made based on the interviews conducted with Realtors and
others familiar with the housing market.
4 With the estimated capture rates of between 50% and 100%, there remains very little de-
mand for affordable for-sale multifamily product in Downtown Grand Rapids.
Demand for Affordable General-Occupancy Rental Housing
Table 18 shows demand calculations for affordable general-occupancy rental housing in the
Grand Rapids Market Area for 2005 through 2015, and estimates the number of additional units
supportable in Downtown Grand Rapids over this period. A description of these estimates fol-
lows.
4 From this projected household growth, we estimate 20% will be for rental housing, based on
homeownership trends in the Market Area, resulting in demand for 101 new rental units be-
tween 2005 and 2010 and 167 new rental units between 2010 and 2015.
4 Of this growth, it is estimated that 70% of new rental households will be income qualified,
providing 71 households seeking affordable rental housing between 2005 and 2010 and 117
households seeking affordable rental housing between 2010 and 2015.
4 From this demand, we subtract the estimated increase in senior rental demand over these pe-
riods. These figures are determined in Table 19. Subtracting these estimates leaves demand
for 12 affordable rental units between 2005 and 2010 and demand for 75 rental units be-
tween 2010 and 2015.
4 We estimate that 90% of this demand will be in the City of Grand Rapids, based on popula-
tion and income projections.

TABLE 18
PROJECTED DEMAND FOR AFFORDABLE GENERAL-OCCUPANCY
RENTAL HOUSING
2005 to 2015
2005-2010 2010-2015
(times) Estimated rental demand x 20% 20%
(times) Estimated percent of growth income-qualified for affordable housing * x 70% 70%
(minus) Demand for age-restricted rental units - 59 42
(equals) Projected demand for general-occupancy rental units = 12 75
(equals) Projected study area demand housing units = 11 67
(times) Estimated percent of demand capturable in Downtown Grand Rapids x 75% - 100% 75% - 100%
(equals) Units supportable at Site 8 - 11 50 - 67

4 Between 2005 and 2010, we estimate Downtown Grand Rapids would capture almost all
new affordable rental demand, as we believe the first project in the ground would capture
most of the units.
4 The calculations show no demand for between eight and 11 affordable rental units between
2005 and 2010. The calculations show demand for between 50 and 67 units of affordable
rental between 2010 and 2015.
Demand for Affordable Independent Senior Housing
Table 19 presents our demand calculations for affordable independent senior housing in the
Grand Rapids Market Area in 2006 and 2011. The table calculates demand based on senior
households with incomes less than $25,000 and who do not own their own home. The method-
ology is described below.
4 The potential age/income qualified base for market rate adult/few services senior housing in
2005 includes all older adult and senior households (age 55+) with incomes of $25,000 or
less and who do not own a home. We estimate the number of age/income-qualified senior
households in the Market Area in 2006 to be about 1,600 households.
4 Adjusting to include appropriate long-term capture rates for each age cohort (0.5% of house-
holds ages 55 to 64 up to 12.0% of households ages 75 and over in 2006) results in a local
long-term demand potential for approximately 222 affordable independent senior housing
units in 2006.
4 Additional demand will come from outside the Market Area. We estimate that 25% of the
long-term demand for independent senior housing will be generated by seniors currently re-
siding outside the Market Area. This demand will consist primarily of parents of adult chil-
dren living in the Market Area, individuals who live just outside the Market Area and have
an orientation to the area, as well as former residents who desire to return. Together, the
demand from Market Area seniors and demand from seniors outside the Market Area results
in total demand potential for around 295 independent senior housing units in 2006.
4 A portion of the demand for affordable senior housing is being met by existing projects in
the Market Area. Subtracting all units at the existing projects (less a 5% vacancy factor) re-
sults in additional demand for 29 affordable independent senior housing units in 2006.
4 No one location or project can capture all of the market area demand. Based on the location
Downtown Grand Rapids and the orientation of renters/buyers, we project that for-sale hous-
ing in Downtown would capture 85% of total rental demand or about 25 units of affordable
rental housing in 2006.
4 For the calculations for 2011, we included the pending projects identified along with exist-
ing units. We subtract the existing adult/few services senior housing units (less a 5% va-
cancy factor) from the projected demand based on the 2011 demographic projections.

TABLE 19
AFFORDABLE INDEPENDENT SENIOR HOUSING DEMAND
2006 & 2011
2006 2011
Age of Householder Age of Householder
55-64 65-74 75+ 55-64 65-74 75+
# of Households w/ Incomes of <$20,000/$25,000 in 2011 358 413 740 464 552 864
(plus) # of Households w/ Incomes of $20-$25k/$25-30k in 2011 + 124 146 218 + 153 147 147
(times ) Estimated percent not owning home x 9% 12% 29% x 9% 12% 29%
(equals) Potential Market = 11 18 63 = 14 18 43
(equals)Total Potential Market Base = 369 431 803 = 478 570 907
(times) Potential Capture Rate x 0.5% 10.0% 22.0% x 0.5% 10.0% 22.0%
(equals) Potential Demand = 2 + 43 + 177 = 2 + 57 + 199
Total Local Demand Potential = 222 = 259

(plus) Demand from Outside Market Area (25%) + 74 + 86
(equals) Total Demand Potential = 295 = 345
Rental Rental
(times) Demand for rental housing x 100% x 100%
(equals) Total demand for rental housing = 295 = 345
(minus) Existing Market Area Competitive Units* - 266 - 266

(equals) Total Market Area Independent Demand Potential = 29 = 79
(times) Estimated percent capurable by Downtown redevelopment sites x 85% x 85%
(equals) Total Demand at Site = 25 = 67
* The number of competitive units listed in Table 5 are decreased by 5% to account for the vacancy factor.

4 In 2011, this calculation results in demand for about 67 units of affordable rental housing in
Downtown Grand Rapids.
TABLE 20
SUMMARY OF HOUSING DEMAND
DOWNTOWN GRAND RAPIDS
2005 to 2015
Housing Type 2005 to 2010 2010 to 2015

General-Occupancy
Market-Rate
Condominium For-Sale Units 0 Less than 5
Rental Units 0 8 to 17
Affordable
Condominium For-Sale Units 0 0
Rental Units 8 to 11 50 to 67
2006 2011
Age-Restricted (Senior)
Market-Rate
Adult/Few Service For-Sale Units 0 0
Affordable
Recommendations
Based on the demand analysis for housing in Downtown Grand Rapids, which is summarized in
Table 20, we recommend developing an affordable senior rental project of about 40 units. We
believe this project would have the greatest opportunity to be successful given the projects loca-
tion, demographic trends, and the current housing market.
Table 21 shows our recommended development concept for an affordable senior rental project at
Block 19. We assume that the project would most likely be funded with essential function bonds
issued through the local economic development authority (EDA).
Essential function bonds, or revenue bonds, may be issued by economic development agencies to
fund the development of housing. The revenues generated by the projects to be financed and/or
other revenues of the EDA may be pledged to the payment of the revenue bonds. Bonds may
also be secured by a mortgage on certain EDA property.

Without the use of essential function bonds or other government assistance, it is often difficult
for the private market to develop rental properties at a cost that allows for rents to be affordable
to the majority of the intended market. The advantage of essential function bonds, versus other
programs, such as Low-Income Housing Tax Credits, is that there is no income qualification for
potential residents, thus, the potential renter market is broader. The EDA does have, however,
the choice of imposing income-limits on rental projects financed with essential function bonds.
TABLE 21
RECOMMENDED UNIT MIX AND RENTS
AFFORDABLE SENIOR RENTAL
BLOCK 19 IN DOWNTOWN GRAND RAPIDS
JANUARY 2007
No. of % of Recommended Rent /

Unit Type Units Units Square Feet Rent Sq. Ft.
1 BR 15 38% 600 - 700 $550 - $600 $0.86 - $0.92

1 BR +Den 15 38% 800 - 900 $650 - $750 $0.81 - $0.83
2 BR 10 25% 1,000 - 1,100 $800 - $900 $0.80 - $0.82
TOTAL 40 100% AVG 825 $650 $0.89
The rents in the above table include all utilities, except telephone and cable, along with grounds
keeping and snow removal. We recommend underground or covered parking and recommend
charging a fee of about $35 per month for the use of this facility.
The rents recommended in the table are somewhat higher than other affordable projects restricted
to seniors in the Market Area. However, we believe higher rents would be justified by the fact
that the project is newer. We also assume that the affordable senior development would be a
component to a mixed-use structure. Again, we believe this would add to the appeal of the pro-
ject and support somewhat higher rents.
We estimate that given the existing senior rental market the project proposed would absorb at a
relatively rapid pace. We believe that half of the units would be pre-leased prior to occupancy.
The remaining units would absorb at a rate of between 4.0 and 5.0 units per month, for a lease-up
period of between four and five months following occupancy.
Building Amenities
In general, we recommend that developers look to Lake Shore Place as a model of the features
and amenities that the market is looking for. Our experience with the focus group and interviews
showed that seniors are generally satisfied with this facility.
To be appealing to area seniors, we recommend the building feature:

• Underground or covered parking;

• Secured entry;
• Reception area/lobby;
• Community room;
• Exercise room;
• Lounge/library;
• Craft room; and
• Trash chutes on each floor.
We also suggest the following building amenities if possible:
• Ledges outside of unit entrances, to set down groceries and other items when entering units;
and
• Storage lockers either in the building or in the garage area.
Unit Amenities
In terms of the design of the units, finishing should reflect this market’s tastes. Attention should
be paid to decor, color schemes, carpeting, common area finishing, and unit details. We recom-
mend that the units incorporate the following unit features:
• Individually controlled heat and central air conditioning;

• Full kitchen with sink, fridge, microwave, and range;
• Adequate drawer and cabinet space;
• Walk-in shower;
• Raised toilets;
• 24-hour emergency response, either pull cords in the living and bedroom areas and bath-
room or consider a pendant system;
• Raised electrical outlets;
• Level door handles; and
• Window coverings.
Redevelopment Sites
Based on our analysis of redevelopment sites presented in the Downtown Redevelopment Plan,
we recommend focusing on Block 19. Among all redevelopment sites, this redevelopment site
offers the best site potential for housing. It has the best positioning relative to traffic. In addi-
tion, the proximity to the historic hotel and the river would be desirable to potential residents, es-
pecially if design features could maximize these qualities.
The next best option is Block 29. However, we believe it will be very difficult to orient housing
on this block away from Highway 2, considering space limitations. As a result, we recommend
focusing on Block 19.
Overall, Downtown Grand Rapids has several strengths that would make it attractive to potential
residents. It is an existing commercial district that sees a good deal of car and pedestrian traffic.

It is close to the river and other natural amenities. And it offers a unique quality unlike any other
neighborhood in Grand Rapids.
However, the greatest hurdle to overcome for housing in Downtown Grand Rapids is the percep-
tion that Downtown has nothing to offer potential residents. The demand calculations show that
housing built in Downtown will have to targeted to the right market, such a project would do
well. Downtown has many attributes the residents would appreciate. It would be important that
any potential project provides greatest opportunity for success to overcome this perception.
Financial Feasibility
We understand that redevelopment costs at Block 19 may be significant because of soil issues on
the eastern portion of the block. Combined with the fact that any housing project in Downtown
would have to be affordable, these higher redevelopment costs may mean a larger public subsidy
to make the project work, even beyond the subsidy to make the units affordable.
Additional Phases of Redevelopment
Redevelopment in Downtown Grand Rapids – both commercial and residential – will counteract
the belief that Downtown is not a desirable place to live. We believe that additional phases of
redevelopment would see a greater potential for a range of housing options, including more mar-
ket-rate options. Shown in the demand summary, we believe the second phase of redevelopment
in Downtown (2010 to 2015) should focus on an affordable general-occupancy rental building.
We also believe there are some additional underutilized parcels that may be available for rede-
velopment in Downtown, aside from the proposed redevelopment blocks, and that some of these
sites may offer even better residential potential than the proposed sites. Some of these sites are
closer in proximity to the river. Others have better views of some of the historic structures in the
Downtown.
We understand that many of the sites selected as redevelopment sites may have the greatest need
for redevelopment in earlier phases. We recommend reevaluating the development potential in
subsequent phases. We believe there will be even greater potential for housing in Downtown
following the proposed redevelopment of Block 19 and the hospital site across the river. Both
projects would bring new residents to Downtown and ultimately change perceptions of the
Downtown as a residential neighborhood.
Public Policy Trade-Offs
The purpose of this study is to analyze the market potential for housing in Downtown Grand
Rapids and to make recommendations. The preceding discussion provides recommendations for
the first phase of housing that, based on the analysis, shows the greatest potential to be successful
in the market. The goal is to provide recommendations for a feasible project in Downtown that
would stimulate additional housing and commercial redevelopment.
This study does not outline affordable housing needs in the Grand Rapids Market Area, nor does
it make recommendations on the most cost effective way to address that need. In fact, some of

the interviews suggested a greater need for affordable rental housing for families, a type of hous-
ing we do not believe would be appropriate in Downtown given the parcels for development and
the lack of green space. This issue was not explored in depth under the purposes of this study.
This study assumes that the policy goal is downtown redevelopment. If the policy goal is to pro-
vide affordable housing to seniors in the most cost effective way, there may be other sites in
Grand Rapids that would provide a location for affordable senior housing with a smaller com-
mitment of public resources.

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A Market Analysis for Housing

615 First Avenue NE

Dear Mr. Mattei:

MAXFIELD RESEARCH INC.

Mary C. Bujold Grant Martin

612-338-0012 (fax) 612-904-7979

PURPOSE AND SCOPE OF STUDY.............................................................................. 1

SITE ANALYSIS ............................................................................................................... 2

DEMOGRAPHIC ANALYSIS ......................................................................................... 15

FOR-SALE MULTIFAMILY ANALYSIS ..................................................................... 33

INDEPENDENT SENIOR HOUSING MARKET ANALYSIS .................................... 47

CONCLUSIONS AND RECOMMENDATIONS........................................................... 59

Table Number and Title Page

Demographic and Economic Analysis

Competitive Market Analysis

MAXFIELD RESEARCH INC. i

Conclusions and Recommendations

SUMMARY OF HOUSING DEMAND

Housing Type 2005 to 2010 2010 to 2015

Source: Maxfield Research Inc.

MAXFIELD RESEARCH INC. ii

RECOMMENDED UNIT MIX AND RENTS

No. of % of Recommended Rent /

Source: Maxfield Research Inc.

MAXFIELD RESEARCH INC. iii

• an assessment of Downtown Grand Rapids as a site for multifamily housing.

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Downtown Redevelopment Master Plan

Housing in the Downtown Plan

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Key Redevelopment Activities, Downtown Grand Rapids

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Strengths and Weaknesses of Downtown Grand Rapids for Housing

4 Proximity to other commercial districts. Because of its central location, residents of

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Blandin Paper Plant, looking south across NW Fourth Street.

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4 Transition areas between commercial and traditional residential neighborhoods.

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Block 17, looking southwest across NW First Ave.

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Redevelopment Site Comments

Redevelopment on Block 17 and Block 18 depends on a proposed expansion of the Blandin

Block 29, looking southeast across North Pokegama Avenue.

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Block 37, looking south across NW Fourth Street.

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The Downtown Redevelopment Plan recommends a mixed-use redevelopment concept on the

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Appropriateness of Downtown Grand Rapids for Multifamily Housing

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Market Area Definition

Population and Household Growth Trends and Projections

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Minnesota 4,375,099 4,919,479 5,452,500 5,909,700 544,380 12.4 533,021 10.8

Minnesota 1,647,853 1,895,127 2,182,200 2,440,800 247,274 15.0 287,073 15.1

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Under 20 8,786 8,397 8,150 -389 -4.4 -247 -2.9

Sources: U.S. Census; MN Dept. of Administration ; Maxfield Research, Inc.

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