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More displacement = more Market Rate Housing for GR

April 28, 2016

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Two days ago MLive posted a story about yet another development project that has received the green light. 

The development in question will take place on the north side of Michigan street, between Grand and Benson, just south of the I-196 highway. RISE Real Estate Development will head up the project. The Georgia-based developer has this to say about themselves on their website:

Rise is a nonprofit organization that connects key groups working to revitalize communities and neighborhoods. Rise partners with communities to develop affordable market-rate housing in partnership with community development corporations, particularly in neighborhoods with the potential to enhance economic diversity.

Seems like they use all the right buzz words, but lets look at the reality of what they are doing with this new development project along the Michigan Street corridor.

First, the $53 million apartment project has been given permission to keep $8.9 million in local and school taxes. This means they will “capture $4.3 million in local property Screen Shot 2016-04-27 at 8.13.49 PM
taxes and $4.6 million in school taxes over the next 14 years. Eligible expenses include demolition of existing buildings, site grading, new streets and the installation of new utilities
.”

How is it that this project gets such a large tax break? $8.9 million is just under one-fifth of the total cost of the project, plus they won’t have to pay taxes for 14 years. How does this benefit the city? Can you imagine if people who wanted to stay in their homes and make improvements would get comparable tax breaks. How about giving comparable tax breaks to people who wanted to purchase and fix up the houses in this neighborhood? Wouldn’t they be revitalizing the neighborhood?

Second, the tax breaks were approved by the Michigan Strategic Fund Board, which is part of the Michigan Economic Development Corporation (MEDC). The MEDC is a public-private partnership that seeks to promote tourism and economic development in Michigan. The reality is that the MEDC is predominantly made up of people from the private sector, with a few representatives from local government. These people are appointed, not elected.

The Michigan Strategic Fund Board, which approved the $8.9 million in tax breaks for the RISE Real Estate Development project, is also an unelected group and is made up mostly by members of the private sector and two state government bureaucrats. Thus, it is evident as to why tax breaks were provided for this development project. However, it makes it difficult for this writer to understand how RISE is going to enhance economic diversity with such a project, especially when 16 homes are being demolished and so many people are being displaced to promote “market-rate” housing.

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Third, how do you think the 16 houses currently occupied by individuals and families will feel about RISE and its commitment to “revitalize communities and neighborhoods.” This is a critical point, since it is not likely that those being displaced will feel revitalized. The question with all of these development projects is not whether it will be a community benefit. The question is, which people within the community will benefit. There are clear winners and clear losers, with the winners being RISE, real estate speculators, and other development projects or potential development projects in the area. The clear losers are those who are being displaced, working class families and disproportionately community of color, who are statistically more vulnerable to displacement. This is Grand Rapids.

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