Data reveals need for creative solutions as Eastown rent, home ownership costs rise

Because of the collaboration between residents, the City of Grand Rapids and the Eastown Community Association (ECA), our community has become an attractive place to live. This attraction is demonstrated through our higher home values and rising rents. Eastown, like many communities in Grand Rapids, is experiencing growing pains and is facing the new challenge of balancing a diversity of housing options and affordability. These issues are much different than the issues that we’ve faced as a community in the past.

The Eastown Community Association has been hard at work over the last 40 years to reduce crime, to empower residents’ relationships through community events and more recently to work with developers on projects that promote a sympathetic aesthetic to our existing vibrant community. The ECA has been an advocate for our residents on a number of issues that have arisen over our many decades as an organization.

As a neighborhood group, we understand how important it is to be skilled at fostering a cohesive community, especially as we continue to see Eastown grow as one of the most desired neighborhoods in Grand Rapids. Our neighborhood has grown safer overall; this fact, coupled with our diverse business district and walkability, has made Eastown an attractive place to live.

The allure of Eastown has created a housing demand that has forced rents and home values to rise. The result is that both would-be renters and homeowners in the community are saying that even if they can find limited options for housing, the prices that are offered are often too expensive for many potential renters or homeowners to afford.

Forecasted data shows that Eastown’s renter median household- not to be confused with individual- income is higher ($37,534) than renter median household income for Grand Rapids as a whole ($26,576) in 2016. A real estate analysis of available rentals shows that median contract rents in Eastown have grown to $1,413 in 2016. This indicates that current renter households in Eastown are spending about 45% of their monthly income on rent.

The U.S. Department of Housing and Urban Development explains that housing costs should not exceed more than a third of household’s annual median income, while renters in Eastown are paying closer to half of their incomes in rent. Additionally, 44% of households in Eastown are renters, meaning that our neighborhood of predominantly single-family homes (64.6%) is closer to a 50/50 split of owners versus renters than some might expect.

What’s important to note is that when median numbers are reported, it’s not a stagnant number, and operates on a bell curve. Not all renter households are making as much as $37,534, and many are making more. Additionally, Eastown renters that report higher incomes than Grand Rapids renters are likely due to the market driving housing prices up so that only those with higher incomes find these prices even remotely accessible.

Would-be homeowners are finding Eastown’s housing market challenging as well. The average sales price for a single-family home in Eastown has increased 64.4% between 2010 and 2015, and peaked at an average of $150,547 in 2015 (from MLS listings, Chad Sytsma, Greenridge Realty). The median owner occupied household income in Eastown is $74,931 in 2016, compared to Grand Rapids at $55,896, meaning that the issue with homeownership in Eastown is less about affordability and more about availability of housing. Anecdotally, many houses that are on the market in Eastown have offers within a few hours, and many are off the market in a few days' time. This makes becoming a new homeowner in Eastown more like a competition of timing and financial resources.

The accessibility of Eastown’s market does not just affect residents, but businesses also. Long-time businesses are closing their doors due to a rise in their rents. The cohesiveness of our community is compromised. Would-be residents want places to walk to, and we lose a bit of our appeal when storefronts are vacant.

The high demand for housing in Eastown makes it challenging to find attainable prices for housing in our desirable neighborhood. The hottest trend in real estate right now is to be within a safe and comfortable walking distance of the destinations that meet our everyday needs. This includes grocery stores, shops, bars, restaurants, services, parks and transportation options that can take us to jobs and other places that we want to go. Eastown boasts of walkability to many of these types of amenities, which helps to drive the demand for housing in the neighborhood.

As residents of Eastown, and in neighborhoods where this trend in housing cost and availability is beginning, we need to be open to thinking creatively about attainable housing options for new renter and owner households, and holding true to a diverse mix of both. We also need to be spending our money as locally as possible as this keeps business doors open in our vibrant retail corridors. The walkability of places like Eastown is in high demand, and is a trend that we will likely see continue to grow.

Data sources include the American Community Survey, Applied Geographic Solutions, and MLS listings. 2016 forecasts and estimates by Growing Home Design, 2016.