Modular Home Placement for Middle Market Infill to Proceed in Michigan
InnovaLaB, the former Kent County (Michigan) Land Bank, will spend much of 2019 ramping down projects under supervision of the county. Yet, the organization will continue with the Michigan Land Bank in the implementation of modular housing to meet middle market demand.
“The state land bank contracted with us to do modular,” InnovaLaB Executive Director David Allen said. “The state is not going to let that go to the wayside. It’s very important work.”
The Kent County Board of Commissioners voted 11-8 on Dec. 20 to dissolve the county effort. It pointed to “mission creep” as the primary reason for dissolution. In 2009, the organization began to assist the county in clearing land titles. Its focus has been on tax-foreclosed properties following the economic downturn. However, when the land bank rebranded to InnovaLaB and began placing modular homes, it raised some concerns.
“…based on the improved real estate market in Kent County, information received from stakeholders during the 2018 review, the ability to reestablish the a land bank should economic conditions falter in the future, the termination of the current land bank is warranted, as KCLB has completed its original mission,” county commission meeting minutes stated.
Skyline Champion Homes Provides Modular Construction for Land Bank Homes
Skyline Champion Corporation provides InnovaLaB with modular homes to create city infill. The partnership prepared land for, and installed, three new homes last year. They plan to drop another 13 modular residences in the next several weeks, some of which are duplex homes.
The idea is to use modular construction and take advantage of construction and cost efficiencies through building indoors. Single family homes for less than $200,000 are difficult to find in the Grand Rapids area. Prices have gone up about 13 percent in the last year, further leaving homebuyers searching for affordable solutions. The modular equivalent of a site-built home can provide a new dwelling to fit middle-market demands.
Champion Modular’s plant in Strattanville, Pa. constructed and delivered the three homes. And all arrived ready to set on their foundations within four weeks. Each home came in at about 70 percent the cost of what its site-built counterpart would be.
InnovaLaB is under contract with the Michigan Land Bank to provide affordable modular housing across the state.
Median Home Prices Per Square Foot
The median residential price per square foot in the U.S. is $148, and in city of Grand Rapids it’s about $129 per square foot and $142 per square foot median in the metro area.
During the summer of 2018, InnovaLaB and Champion installed the three homes in different neighborhoods in the southeast and northeast parts of Grand Rapids, Michigan’s second most populated city. Those modular homes are available on the area’s multi-list service and can be located and obtained by an individual with or without help from an agent.
The steady increase in home prices, even with slowing increases during the last six months, has placed a great deal of attention on factory-built homes, including modular.
“Modular really has gained a lot of traction,” Steve Payne, director of business development for Skyline Champion, said. “Modular is a very effective system, and you can do a lot with it.”
The limitations to a modular product really only depend on the parcel where the home is being placed, he said.
‘Mission Creep’ Comes from Plan to Provide Affordable Housing
InnovaLaB’s new name and branding, as well as its contract with Champion and work outside of Kent County, were the primary components of what county commissioners saw as “mission creep”. Commissioners in favor of the dissolution of the land bank noted that the organization was to clear messy titles, not provide affordable housing.
About two-thirds of the 20 county residents who spoke during public comment at the Dec. 20 meeting supported the continued work of InnovaLaB. They cited need for non-profits to have continued protection to support their mission of providing affordable housing. However, others cited undue competition with commercial developers, builders, brokers and agents.
John Francis, of Grand Rapids, represented the Commercial Alliance of Realtors in his comments. According to public record on the meeting, Francis conveyed the sentiment that the land bank violates free and open markets. He said the organization fulfilled its promise, and should be dissolved.
How Does the Operational Change of InnovaLaB Impact the City of Grand Rapids?
Grand Rapids City Manager Mark Washington penned a letter to Kent County Administrator Waymon Britt asking the for reconsideration of the land bank’s dissolution.
Grand Rapids city manager points to unfinished projects under agreement between the two local governments:
- 7 active agreements with KCLB between 2013 and 2018
- 187 parcels under KCLB ownership within the City of Grand Rapids
- 24 affordable housing units to be delivered under the 2016 and 2017 agreements
- 10 strategic development parcels of concern in the city
- 21 properties to be converted to the city from KCLB under the 2018 agreement
Washington said the city deserved more time to consider the implications of discontinuing the land bank’s work.
“The partnership between the City of Grand Rapids, Kent County and Kent County Land Bank Authority has produced positive housing outcomes for our community,” Washington told MHInsider. “This work is not done. We have nearly a year left under the current agreement and several affordable housing projects are not yet completed.
“I am concerned about the future since the majority of the Land Bank’s work has been in the city of Grand Rapids,” he said. “The conversation to dissolve the land bank progressed so quickly… I requested the county consider a year rather than six months to wind down the affairs, and the County agreed to this.”
Washington said the City will take the year to address current and future development opportunities and identify strategies that will improve affordable housing. Also, it will consider other land banking strategies independent of Kent County.
“It is too early to know how we will move forward on these matters without engaging the city commission in a public discussion,” Washington said. “I anticipate having a briefing with the city commissioners during the regularly scheduled meeting on January 29.”