Grand Rapids outlines Housing Fund next steps
GRAND RAPIDS, Mich. – The Grand Rapids City Commission this morning advanced its work to eliminate racial and ethnic disparities in housing in Grand Rapids and increase housing supply, as it discussed next steps in the formation of the Grand Rapids Housing Fund.
The discussion followed recommendations made during the Committee of the Whole by City administration with support from the City’s housing practice leader, Housing Next. The proposed, non-endowed, designated Housing Fund would help assist low and moderate-income residents, preserve existing affordable housing and make bridge loans for acquisition and pre-development costs with non-profit developers. The two-pronged policy recommendation includes an operations policy and fiduciary for housing funds.
Housing Next Executive Director Ryan Kilpatrick outlined that the City first establish a Commission policy for operation of the Grand Rapids Housing Fund. That measure would include its purpose, board make-up and appointment process, duties, decision making process, uses of funds for investment in housing, and initial deposits and future deposits to the fund.
He then suggested the City establish a fiduciary through the Grand Rapids Community Foundation (GRCF) for stewardship of initial and future dollars dedicated to this purpose. Kilpatrick said the foundation has offered to manage the Housing Fund investments as a non-endowed designated fund with the Housing Fund Board making all capital spending and distribution decisions.
“The foundation would be the steward of the monies invested to grow the fund, allowing the City to benefit from highly experienced staff and experience at GRCF to support the long-term expansion of the fund,” Kilpatrick said. “This partnership would create an opportunity to accept financial contributions from outside philanthropic, corporate, faith-based organizations from across the community.”
Kilpatrick recommended that the Housing Fund board consist of 11 members of the community with experience related to housing, finance, residential development, health & well-being, lived experience, social work, philanthropy and impact investing. Members would consist of:
Three appointed one from each ward nominated by ward Commissioners
One appointed by the Mayor
One appointed by the City Manager
One seat for the Executive Director of the Grand Rapids Housing Commission
Five appointed from community through the Committee on Appointments
An established Housing Fund board would make all spending and distribution decisions designed to make housing more accessible to residents of the City. It would evaluate and determine property acquisition, preservation, and pre-development loan funds for qualified and experienced non-profit housing partners. It could also support gap-financing to support mixed-use, non-profit and for-profit development projects which include affordable housing; income-qualified homeowner assistance grants/loans to support necessary repairs, reduced energy costs, and additions for accessory dwelling units. Gap-financing could also be offered to development projects receiving funding from State or Federal funding or equity investment. Housing Fund monies could also be used to pay City fees required for the development of affordable housing/Incentivize small scale and non-condo zero lot-line affordable housing development.
The concept of establishing a Housing Fund first emerged from work on Great Housing Strategies in 2015 and carried through to the recommendations of Housing Now! In late 2018 and early 2019, the City halted plans to establish a fund due to a variety of circumstances – primary among them was the closure of the Kent County Land Bank Authority and the need to align housing strategy with the City’s strategic plan that was under development. In 2019, the City contracted with Housing Next to help establish a Housing Fund that aligns with the City’s adopted strategic plan. Its “Economic Prosperity and Affordability” priority and subsequent fourth objective, “Supports housing development and services that help keep people in their homes.”
The FY2021 budget includes an initial investment in the fund of about $900,000. This represents the amount authorized in the Fiscal Plan, less the amount invested in the La Lucha Fund to support the housing needs of undocumented residents of the City during the pandemic.
Deputy City Manager Eric DeLong told the City Commission that recommended next steps are now being prepared for consideration in the near future and include seeking adoption of City Commission Policy governing the Grand Rapids Housing Fund Board, approval of an agreement between the City and Grand Rapids Community Foundation establishing the City of Grand Rapids Housing Fund as a non-endowed designated fund at the Grand Rapids Community Foundation, and consideration of any action necessary to wind-down earlier arrangements with the Grand Rapids Housing Commission.
To learn more about the Housing Fund proposal, CLICK HERE.