Grand Rapids apartment development is being shaped by three forces at once: a 2024 zoning package that legalized small multifamily buildings and accessory units across much of the city, state and local incentives that subsidize workforce and affordable rentals, and a measured housing shortage that Kent County is still far from closing. For owners of existing buildings, the result is more new supply in specific corridors, especially on the West Side and downtown, but not enough to erase the region’s projected gap of roughly 34,000 housing units by 2030.
Grand Rapids had 198,917 residents in the 2020 Census, and the Census Bureau’s estimate for July 1, 2025 is 201,183. According to U.S. Census Bureau estimates, 54.0% of homes in the city are owner-occupied, so roughly 46% are rented, and the median gross rent for 2020–2024 was $1,266. The city has been paying close attention to that count: it successfully challenged the Census Bureau’s 2023 estimate, which was raised from 196,608 to 198,270. This post walks through the rules, the money and the projects behind new apartment construction in Grand Rapids, and what they mean for buildings that are already standing.
How large the housing gap is
The starting point for nearly every housing policy debate in Grand Rapids is a set of studies by Bowen National Research. The 2022 assessment, summarized in the city’s Kent County housing needs assessment update, found a need for 14,106 units in the city of Grand Rapids and 34,699 across Kent County for 2022 through 2027. By income, the countywide need broke down into:
- 6,400 units for households below 60% of area median income (AMI).
- 18,464 units for households between 60% and 120% of AMI.
- 9,831 units for households above 120% of AMI.
A 2025 update prepared for Housing Next pushed the horizon out and found progress, but slow progress. As reported by Crain’s Grand Rapids Business, the countywide shortfall is now 33,914 units by 2030, after about 6,000 units were added from 2022 through 2024. The update found that rental construction would need to run at roughly twice its recent pace, and that rentals for households at or below 50% of AMI are about 15 times behind what is needed. WOOD TV’s coverage broke the gap into about 12,000 rental units and 22,000 for-sale homes, with about 13,000 of the needed units in Grand Rapids itself.
For an existing owner, the middle band matters most. The largest single slice of need sits between 60% and 120% of AMI, the same band that most of the city’s incentive programs now target, which means a growing share of new competition will be priced against the workforce housing that older buildings already provide.
The 2024 zoning package and what it legalized
On April 23, 2024, the City Commission unanimously approved a set of housing amendments to the zoning ordinance, effective May 23, 2024. The city’s page on Grand Rapids’ 2024 housing zoning amendments describes several changes that affect multifamily supply directly.
Accessory units and occupancy
Accessory dwelling units, the backyard cottages and basement or attic apartments sometimes called ADUs, became a permitted use, with no owner-occupancy requirement and no parking requirement. The cap on unrelated occupants per dwelling rose from four to six. Together, these changes let single-family lots absorb more renters without any new apartment building being built.
Small multifamily buildings in low-density neighborhoods
In the city’s lowest-density neighborhood zone, TN-LDR, the amendments made buildings of six or fewer units easier to build. They:
- Reduced lot-size and lot-width minimums for those buildings.
- Allowed them on certain residential streets where they had been barred.
- Removed parking requirements for them on those streets.
- Allowed existing single- and two-family homes to be converted into more units.
The package also expanded the distance from transit that qualifies a project for a parking reduction, from 300 feet to half a mile, and allowed small single-room-occupancy buildings and small shelters in residential zones, while raising the minimum stay in an SRO from 32 to 90 days.
What the package did not do
The changes are targeted rather than sweeping. They do not, for example, eliminate parking minimums citywide, and the city describes the new allowances in terms of two-family homes and buildings of six or fewer units, not large apartment complexes. The practical effect is more “missing middle” infill, the duplexes, fourplexes and small walk-ups that compete most directly with older 5- to 20-unit buildings.
The master plan and the Zone GR rewrite
The 2024 package was an interim step. In late 2024, the City Commission and Planning Commission unanimously approved a new 20-year Bridge to Our Future master plan, which sets the direction for land use, housing and transportation. A master plan is a policy document; it does not change what can be built until the zoning ordinance is brought into line with it.
That is the job of Zone GR, a full rewrite of the city’s zoning code launched in 2026, with a public kickoff on May 12, 2026. Housing choice is one of its stated goals. No adoption date had been announced as of this writing, so owners should treat Zone GR as a process to follow rather than a set of rules to plan around. The direction of travel, however, is clear: the master plan and the 2024 amendments both point toward more housing types allowed in more places.
Housing incentives behind new Grand Rapids projects
Zoning determines what can be built. Incentives determine what pencils out, and in Grand Rapids several overlapping programs are doing much of that work.
Michigan’s brownfield housing TIF
On July 18, 2023, Governor Whitmer signed Senate Bills 129 through 132, amending the Brownfield Redevelopment Financing Act (1996 PA 381) so that captured property-tax revenue, known as tax increment financing or TIF, can pay for housing serving households up to 120% of AMI, with approval from the Michigan State Housing Development Authority. MSHDA’s board approved the program statement on September 29, 2023, and Michigan’s brownfield housing TIF program has since become a common piece of downtown and corridor deals.
The city’s PILOT program
Grand Rapids also offers payment in lieu of taxes (PILOT) agreements, which replace ordinary property taxes with a smaller service charge. The city’s PILOT program for affordable and workforce housing has two tiers:
- Low-income: units for households up to 60% of AMI that use Low-Income Housing Tax Credit or HOME financing, for up to 50 years.
- Workforce: units for households up to 120% of AMI, for 15 years, with a $270 application fee.
The city’s page links an ordinance amendment dated December 17, 2024.
How a housing TIF deal works in practice
The mechanics are worth understanding because they explain how a new building can rent below market and still be financed. When a site is redeveloped, its taxable value rises. Under a brownfield plan, the taxes on that increase are captured for a set period and used to reimburse eligible costs, which under the 2023 law can include housing costs tied to keeping units within income limits. The developer still pays property tax; the increment simply flows back to the project instead of to the general fund. Each plan goes through a public hearing, which is why amendments for projects such as the Ledyard Building appear on city agendas with dollar amounts attached.
Why income targets matter for comparison
Area median income is a figure HUD publishes for each metropolitan area and household size, and rent limits for income-restricted units are derived from it. A unit “at 80% of AMI” therefore has a maximum rent tied to a published formula, not to what the market will bear. When a new project commits units at 80% to 120% of AMI, those rents often land close to what existing, well-kept older buildings already charge. That is the reason incentive-backed workforce housing competes more directly with the existing stock than luxury construction does.
The Affordable Housing Fund
The City Commission created the Affordable Housing Fund on September 14, 2021, with the Grand Rapids Community Foundation as fiduciary. In June 2026, the commission moved $9.6 million into the fund from the $22 million sale of the amphitheater site, the largest single allocation in the fund’s history. Neighborhood Enterprise Zone (NEZ) abatements, a separate state-authorized tool, also appear in several recent apartment deals.
Projects in the Grand Rapids apartment pipeline
Recent approvals show where those tools are being used. The list below includes only projects documented in state, city or established local news sources.
- Abode Fulton, West Fulton: 109 market-rate studios and one-bedroom units with three commercial suites. The Michigan Strategic Fund approved a loan of up to $4.75 million on March 24, 2026, and the project also carries a city NEZ abatement of about $2.46 million and brownfield TIF, according to the state’s announcement of the 109-unit Abode Fulton project.
- 648 Bridge St. NW, West Side: 148 apartments by Talbot Development on the former Duthler’s grocery site, expected to rent at roughly 80% to 120% of AMI, reported in November 2024.
- The Horizon, Leonard Street: a workforce housing project announced by the state on August 26, 2025 at 171 units, supported by an NEZ abatement of about $2.9 million, MSHDA-approved TIF and up to $4 million from the Michigan Strategic Fund.
- 125 Ottawa Ave. NW and the Ledyard Building, downtown: 24 units at 90% to 100% of AMI at 125 Ottawa, and 36 units on the Ledyard’s second through fourth floors, eight of them reserved at 60% of AMI for 25 years, supported by $4.62 million in brownfield housing TIF; the public hearing was October 21, 2025.
- 516 Alabama Ave., West Side: a proposed $55 million, 231-unit mixed-use project by Voyage, Talbot and Pinnacle, reported by WOOD TV in October 2026. It is a proposal, not an approved project.
Two patterns stand out. First, the West Side, along Bridge Street, West Fulton and the blocks north of Bridge, is absorbing a large share of new mid-size projects. Second, almost every project relies on some combination of TIF, NEZ, PILOT or state loans, and most of those tools come with income targets between 60% and 120% of AMI.
How Grand Rapids apartment development affects existing buildings
Older apartment buildings compete with this pipeline in different ways depending on size, location and rent level.
Where competition is direct
Buildings on the West Side and downtown, especially those renovated to attract the same renters as new construction, will see the most direct competition. New projects typically lease up with concessions, and a 109-unit or 148-unit delivery within a few blocks can slow rent growth for nearby buildings during its lease-up period.
Where it is indirect
Small buildings in neighborhoods zoned TN-LDR face a different kind of competition: a slow trickle of ADUs, conversions and new fourplexes rather than a single large delivery. That supply is harder to track, because it arrives a few units at a time, but over years it adds rental options in exactly the neighborhoods where older two- to twenty-unit buildings are concentrated. The higher limit on unrelated occupants works the same way: a house that could legally hold four unrelated roommates before May 2024 can now hold six, which lets shared houses compete on price with small apartments for students and young workers.
Where the gap still dominates
At the lowest income levels, the Bowen update’s finding that rentals for households at or below 50% of AMI are about 15 times behind suggests that new construction is unlikely to catch up soon. Older buildings with naturally lower rents serve that market without subsidy, and the shortage supports their occupancy. That does not make them immune to competition from the tax-credit units that some new deals include, but it does mean demand at the bottom of the rent range is likely to stay deep for years.
What Grand Rapids owners can take from this
The policy picture translates into a short list of practical considerations:
- Map the pipeline. Track approvals within a mile of each building, especially along Bridge Street, West Fulton and downtown, and expect softer rent growth during nearby lease-ups.
- Check what your lot allows. Owners of properties in TN-LDR or near transit may be able to add units through ADUs or conversion under the 2024 rules, which can change a property’s value as much as its rent roll.
- Watch Zone GR. The rewrite could change density, parking and use rules for entire districts; public comment periods are the time to understand how a specific parcel is affected.
- Understand the incentive math. Competitors with PILOT or TIF support can operate with lower tax bills, so comparing rents without comparing tax structures can mislead.
- Price for the workforce band. With most incentives aimed at 60% to 120% of AMI, buildings that already serve that band will see subsidized competition grow over time.
Buyers weigh both the shortage and the pipeline when they value a building, which is why the same property can look very different to an investor depending on its block. For a quick way to see how rent and expense assumptions translate into value, use our apartment building value calculator, and for more local context see our Grand Rapids market page and our Michigan markets overview.
Signals to watch through 2027
Several dates and documents will shape what comes next. Zone GR’s draft ordinance and hearings will show whether the city extends the 2024 small-building allowances into more districts. The Affordable Housing Fund’s spending decisions after the June 2026 allocation will indicate how many subsidized units the city can help finance. And the next Bowen update for Housing Next, if it follows the pattern of the 2022 study and its 2025 refresh, will show whether rental construction has picked up to the pace the 2025 study said was needed. Each of those signals bears directly on how much new competition an existing Grand Rapids building will face, and on how strong the underlying demand for its units remains.
