GRAND RAPIDS — After months of due diligence, Inner City Christian Federation (ICCF) announced Wednesday morning that it had finalized its acquisition of 177 residential properties in the West Michigan and Lansing areas.
As MiBiz first reported in June, the Grand Rapids-based nonprofit housing organization was in discussions with Residential Dynamics Group LLC (RDG) to acquire the portfolio, which features 213 housing units. The Chicago-based real estate investment fund had quietly amassed the portfolio of properties in the wake of the Great Recession.
Terms of the deal were not disclosed.
ICCF CEO Ryan VerWys said that given the organization’s commitment to preserving affordable housing in the community, it was able to create some unique, albeit unspecified, financial partnerships.
“We’re able to do that because there are people who invest in philanthropy,” VerWys said on Wednesday morning while speaking at a panel discussion about development activity in Grand Rapids’ booming West Side neighborhoods. “But there’s a number of people who said, ‘I’ll take some of my capital and invest it at a low rate of expected return to achieve this better good.’”
ICCF said that as part of the portfolio acquisition, the nonprofit plans to invest $4.5 million in improvements to the properties — with a focus on energy efficiency and sustainability — as well establish a program through various partnerships aimed at ensuring 50 percent of the homes are sold to low and moderate income families.
The finalizing of the deal comes at a time when rents and housing costs in Grand Rapids, statewide and around the country have been on the rise, creating concerns of displacement for long-time residents, VerWys said in a statement.
A November report from San Francisco-based apartment listing website Apartment List found that more than 44 percent of Grand Rapids renters were “cost-burdened,” meaning they spent 30 percent or more of their income on rent, according to the report. Another 25 percent were spending 50 percent of their income on rent.
That’s a trend that ICCF executives hope can change through this acquisition.
“Our team has worked hard for the last several months to ensure these properties can be sustainably preserved as affordable housing,” Ryan Schmidt, vice president of real estate development at ICCF, said in a statement. “We’re convinced that this is a sound community investment that will bring housing stability for hundreds of our neighbors for decades to come.”
Editor’s Note: This story has been updated.