Should Grand Rapids require developers to include affordable units in new market-rate projects?
Grand Rapids needs an estimated 8,500 additional affordable housing units for low- and moderate-income households. The city commission is debating inclusionary zoning requirements, ADU policy, and whether to pre-empt state legislation that would limit local housing control.
Overview
Grand Rapids' 2024 Housing Needs Assessment found that approximately 8,500 additional housing units affordable to households earning below 50% of Area Median Income (AMI) are needed immediately. AMI for a family of four in Kent County is $89,900 (2024 HUD data), meaning the shortage primarily affects households earning under $44,950/year.
The city added approximately 2,100 new housing units in 2023, but fewer than 15% were affordable at or below 60% AMI. Market-rate development has concentrated in the downtown core and Midtown neighborhoods, while gentrification pressure has displaced lower-income residents from historically affordable areas including Heartside, South Division, and Creston.
Grand Rapids adopted a housing policy framework in 2022 calling for 1,000 new affordable units by 2027 — a goal the city commission's own housing committee acknowledged in a 2024 report is unlikely to be met without new policy tools.
What Happened
Inclusionary zoning debate (2023–2024): The city commissioned a nexus study to evaluate whether requiring 10–15% of units in large new developments to be affordable is legally defensible and economically viable. The study found a 10% requirement at 60% AMI is feasible for developments of 20+ units without developer subsidies; 15% requires either density bonuses or direct subsidy.
ADU ordinance (2023): Grand Rapids amended its zoning ordinance to allow accessory dwelling units (ADUs) — garage apartments, basement units — on all residential lots citywide. Early data show approximately 300 ADU permits filed in the first year, adding modest capacity.
State preemption threat: Michigan HB 4023 (2025) would prohibit municipalities from requiring affordable units as a condition of development approval — effectively banning inclusionary zoning statewide. The Grand Rapids City Commission passed a resolution opposing HB 4023 in March 2025.
Heartside rezoning: The city rezoned a 40-block section of Heartside to increase allowable density in 2023, allowing up to 12-story residential buildings. Critics note that without affordability requirements, higher density primarily benefits market-rate development.
Source: City of Grand Rapids — Housing
Source: Michigan Legislature — HB 4023
The Debate
- Market-rate development alone has not produced affordable units in Grand Rapids over the past decade — policy intervention is needed
- Mixed-income neighborhoods produce better health and educational outcomes than concentrated poverty; inclusionary zoning is the primary tool to maintain them
- Density bonuses (extra floors allowed in exchange for affordable units) can make requirements revenue-neutral for developers
- Without local tools, Grand Rapids will lose its workforce housing and service workers will be forced to commute from suburban communities with no transit
- Peer-reviewed research (UC Berkeley Terner Center, 2023) finds inclusionary mandates above 10% reduce overall housing production by 7–19% in markets like Grand Rapids
- Tax abatements and direct MSHDA subsidy are more efficient at producing deeply affordable units than private mandates
- State preemption (HB 4023) reflects a legislative consensus that patchwork local mandates create market uncertainty across the region
- Grand Rapids' primary affordability problem is housing supply overall — restricting market-rate construction makes the shortage worse
What to Watch
- Michigan HB 4023: If passed, this would prohibit Grand Rapids from adopting inclusionary zoning. Expected floor vote in the Michigan House — fall 2025.
- GR inclusionary zoning ordinance vote: City commission is expected to vote on a 10% affordable unit requirement for developments of 20+ units — targeted for early 2026.
- 2026 city commission races: Housing affordability is the top issue in multiple wards. Incumbents who supported density-without-affordability face primary challengers.
- MSHDA 9% LIHTC awards (annual): Michigan allocates federal Low Income Housing Tax Credits annually. Grand Rapids projects compete for roughly $40M in annual credits statewide.
Should Grand Rapids require developers to include affordable units in new market-rate projects?
Yes — inclusionary zoning is necessary to maintain mixed-income neighborhoods
No — mandates reduce overall housing production and push costs onto market-rate buyers
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