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More Tax Breaks for Developers while thousands are being displaced or priced out of neighborhoods in Grand Rapids

May 8, 2017

Two weeks ago Michigan Radio ran an investigative story that confirms what many of us in this community have been saying for years about the current housing crisis. Pushed Out: A documentary on housing in Grand Rapids is an important and timely contribution to the current affordable housing crisis in this city. The story makes it clear that the cost of rent and the cost of housing has skyrocketed, along with the fact that more and more companies from outside of the area and outside of the state are buying up properties all across Grand Rapids.

This recent story on Michigan Radio is what makes the recent announcement so difficult to swallow. On Thursday, MLive posted yet another story about developers asking for millions in tax breaks, Tax breaks worth $4.8M urged for 3 urban redevelopment projects. 

The article states that there are three development projects asking for $4.8 million in tax breaks. The MLive reporter then states that these projects, “will transform their city neighborhoods.”

The MLive reporter doesn’t ask how they will transform neighborhoods, not do they provide any evidence to support such a claim. These development projects many very well transform the neighborhoods they will be located in, but the question is, who will benefit from these development projects? Again, this is not a question that is asked, rather it is assumed it will benefit everyone in these neighborhoods.

One project is the develop another downtown hotel, a project that is being led by CWD, a company that owns a great deal of property in downtown Grand Rapids already and is part of the West MI power structure, as we noted in a recent posting. The 130-room hotel will certainly be a benefit to the downtown business and property owners, since it provides even more rooms for those coming to Grand Rapids on business trips or as tourists. The CWD hotel will also be run by the Amway Hotel.

The second development project will re-develop an old auto parts building and include a limousine rental business along Ann Street near US 131. One could easily draw conclusions as to who will be the class of people renting limousines, and it won’t be the working class.

The third development project is a project that will be run by Orion Real Estate Solutions, which has been a major contributor to the gentrification of Grand Rapids, with projects like the Gateway at Belknap. This new project, located at 38 College NE, which will house a four story market rate apartment building.

So yes, these project will transform the neighborhoods they are located in. These development projects will benefit the professional class, those who are upwardly mobile, which means it will disproportionately benefit white people.

In addition, the $4.8 million in tax breaks also means that it is money that does not get directed toward providing truly affordable housing for working class and communities of color. The projects and the tax breaks they receive are announced almost every week. This particular amount of $4.8 million could provide simple homes for 48 working class families, at a cost of $100,000 a piece. Even if the construction cost was $150,000 per home, it would still provide 32 homes for families who are struggling to make a living. With millions of dollars in tax breaks being offered by the state and the city on a regular basis, it could translate into hundreds of affordable housing options.

Let’s say that $5 million in tax breaks is being offered by the city and state each month (which we know to be a low estimate). This would mean there would be $60 million in tax breaks for development projects in each year. Imagine the amount of affordable housing options that could be provided in just one year for people who are currently being displaced or priced out of the neighborhoods that they live in.

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