GRAND RAPIDS — As the city updates its nearly 20-year-old Master Plan to guide future development, local officials say a first-of-its-kind study last year can help ensure equitable outcomes while providing the best return on investments.
Downtown Grand Rapids Inc. commissioned the “Economics of Place” study by Washington, D.C.-based Places Platform LLC, which first presented its preliminary findings to business leaders in July 2020 and then to the Downtown Development Authority board last fall.
The overarching goal of the study was to inventory Grand Rapids’ entire real estate portfolio, from the walkable urban downtown core to outlying, auto-centric suburbs. Researchers calculated the net fiscal effect of 67 specific neighborhoods or districts among four types, from downtown to rural areas. The measure accounts for the amount of tax revenue generated in each area minus the cost to provide public services.
The study effectively shows which areas of the city are being subsidized by others, based on where tax revenue is generated. Perhaps unsurprisingly, the city’s walkable downtown areas created the highest net fiscal return — $45 million — among the four types of spaces, while the drivable suburban and rural areas had a net fiscal loss of $15 million. In other words, city density is subsidizing sprawl.
“It’s not as if we need to make every neighborhood a downtown; that’s certainly not the goal or the desire,” said DGRI President and CEO Tim Kelly. “But if we can target growth and development in key locations, we can help support the entire city.”
Kelly said the study will help inform future development, particularly around needed affordable housing and where officials should be aware of “displacement pressure.”
The city started its Master Plan update last year with a pre-planning phase. Future public and adoption phases are expected through 2023.
Grand Rapids Planning Director Kristin Turkelson said the study’s data will be “incredibly useful as it relates to housing policy,” as well as in determining where economic development incentives should be granted.
“As we move forward with the community Master Plan update, we need to look at housing density requirements and where housing should go,” she said. “This data really helps inform where it will make the most sense from a cost and infrastructure perspective if we add housing … and we know the value we receive from that will be significant.”
In a presentation last year on the study’s findings, Places Platform co-founder and Managing Director Chris Leinberger said downtown and downtown-adjacent areas are the “highest and strongest places generating a surplus” for Grand Rapids.
“We’re hoping this technology and methodology will become part of how you make your plans for the future,” Leinberger said.
Officials say a second phase of the project may expand the analysis to Kent County.
“Our big hope is that it can help inform these long-range planning discussions going on,” Kelly said.