The West Michigan brain gain

At one point in time, only a few decades ago, Michigan was essentially synonymous with an achievable middle class lifestyle. The Big Three employed a variety of people from all socio-economic strata, and manufacturing was strong state-wide. Unfortunately globalization, NAFTA, and the economic meltdown of 2008 took a harsh toll on the average citizen’s income, and the result was many people left the state looking for other opportunities.

The economy in West Michigan, however, has diverged from that pattern and is also attracting young professionals to the area, reversing the trend of brain drain the rest of the state has experienced. As the West Michigan economy continues to improve and grow, what will be the effect on its Millennial demographic?

What we know right now is good news. Last year Kent County topped the list for jobs gained in the state. Population-wise, the area has seen growth as well. In the Greater Grand Rapids area, including Barry, Kent, Montcalm, and Ottawa counties, the total population last year was 1,034,840, with a growth rate of 4.6% over the past five years. Out of that population approximately 60% of adults have at least some college education.

According to Paul Isely, Associate Dean of GVSU’s Seidman College of Business, 80-90% of GVSU’s graduates remain in Michigan. Given the trend of Millennials continuing to live with their parents after college, no doubt a significant number of GVSU’s graduates remain in state because their families are here. The diverse economy, however, has given rise to a number of professional jobs that require skill and training, and that means that West Michigan gets to keep more of its young people for itself.

In 2015, Aaron Renn released the findings of a study that indicated that the Greater Grand Rapids area had seen a 45.6% brain gain - that is, an increasing population of highly educated residents between the years 2000 and 2013. Due to this gain, we are seeing Grand Rapids and the West Michigan area remake itself to cater to a resident with more urban sensibilities. The improvement of Grand Rapids’ bus transit system, the RAPID, and the spreading reach of bike paths through the area have allowed young people to live within the city and more easily commute to a job elsewhere.

Downtown and throughout the city more live-work spaces have been developed from former commercial and manufacturing buildings, allowing for neighborhoods that are not just residential, but multi-use. This kind of housing availability will serve to attract more young professionals of the creative class to West Michigan.

The area is not experiencing an aging population trend like many places, but has a mixed population of old, middle-aged, young people, and children. This is a much more positive sign for the future of this city and larger West Michigan. Its hospitals, research facilities, engineering software companies, and manufacturing sector will have talent to draw from to improve the area's future well into the twenty-first century.

Will Grand Rapidians rely on the co-op option for downtown housing?

Grand Rapids has a very low vacancy rate for its rental housing. It has, in fact, the lowest vacancy rate in the nation -- 1.6 percent -- for a number of reasons. As a result of the housing meltdown and the Great Recession, many Americans have damaged credit and cannot qualify for a mortgage or, having lost their homes, do not want to invest in home ownership again. Also pushed into the renters’ market are young college graduates. A generation or two ago, young professionals would have been looking for houses to purchase, but now they are burdened with student loan debt or have relocated to find work and don’t want to explore longer-term options.

Grand Rapids also has a number of colleges, including Grand Valley State University and Grand Rapids Community College, both of which are located downtown where demand for housing is already high. Additionally, while Americans in the latter part of the 20th century were eager to move out of the city and to the suburbs, that trend is reversing as younger people struggle to afford cars and pay for gas on stagnant wages and with fewer job opportunities. As restaurants, breweries, farmer’s markets, sports and cultural venues continue to multiply in Grand Rapids, people of all ages want to be on hand to enjoy them.

Furthermore, the majority of Baby Boomers are not yet ready to retire, often because they lost money in the recession. Unlike their parents, many Boomers do not own their housing outright and will have to make different choices than their parents did when Social Security becomes their main source of income.

Given that the housing market downtown is already tight and the price of housing is rising, what are the options for people seeking to live downtown who cannot afford sky high rents? One type of housing is being floated as a way to reconcile supply and demand: co-ops.

Co-operative housing is a less private and more communal way of living that allows people to get to know each other and pool their money to better afford both room and board. Typically, co-op residents have private bedrooms but share kitchen and living areas. Co-op ownership options vary, but frequently co-op residents share household chores and pay fees that provide meals and utilities at a much reduced cost. Nationwide there are co-ops that are created to meet the needs of single people, creative groups, college students, retirees, and families. The rules and requirements of each of these will vary according to the special needs of the groups these co-ops serve.

Could offering more co-op housing options help more people be able to enjoy the city’s expanding list of cultural and culinary venues? The answer is obviously yes. By reducing the cost to live downtown these residents will be able to spend money they would have allocated to rent on healthcare, dental care, organic food, theater tickets, dining out, and travel. In some areas, however, home owners are pushing back against the idea of co-ops, worried that their residents will be loud and unpleasant neighbors. Whether the city will allow more co-ops to open and groups of people will choose to embrace co-ops as a solution to current societal problems remains to be seen.