Converting a Crisis
How Honor Offers Hope for the Housing Market
If you’ve been paying attention, you’re aware that West Michigan is experiencing a housing shortage. Many would-be renters and buyers are also facing exorbitantly high rents and home prices for the spaces that are available. Apartments in particular are in high demand, and a recent City of Grand Rapids study illustrates that the situation is pretty serious, with a need of about 35,000 apartments in Kent county over the next four years. Compared to the same study that was performed pre-pandemic, those numbers tell us the situation is not changing for the better.
That means companies like Honor, as well as our partner, Victory Development Group, continue to adjust and innovate to respond to this challenge by finding solutions to alleviate the strain on the market and on residents. What we know is that the greatest housing deficit is in the middle attainable housing range, and that addressing that need will have a ripple effect on other housing. Since this is the kind of construction Honor and Victory do, we’re well positioned to be both a resource and a champion.
Before jumping right in, we need to understand what’s causing this issue so we can best attack it. How we got here is a collision of a weakened economy; inflation and rising interest rates, which strain the banking industry; high costs of and high demand for building materials caused by a number of factors; and a shortage of skilled labor. There’s also been a push to procure more American-made products, which has less to do with idealism and more to do with reliability and timeliness of delivery. Simply put: American-made costs more. All of these elements are affecting everyone in the construction industry; how we approach it makes all the difference.
We like to call it “savings by 1,000 cuts,” because there’s not one silver bullet to solve all of these concerns. First, we make choices on who to work with - firms who can execute good design and subcontractors who understand the macro position and are willing and able to provide building components in the hundreds. It all comes down to being strategic about which relationships can add value and who can help us solve these complex problems.
We also focus on lean construction, repeatability, and pre-manufactured products—and it all adds up. However, even when we can try all of these tactics, our feasibility study might still tell us that a particular project just isn’t going to work out. And we are practical enough to realize that.
This is all a change in mindset.Even five years ago, few of these factors were in play in a typical construction project. Every aspect is more time consuming and requires more hands on deck, especially when you add in the extra tasks of securing funding from the state, grants, incentives, and tax credits to provide a short-term fix.
When it comes to the long term, we stay on our toes and continue to use creative thinking to work around these obstacles. Because, based on what we’re seeing, housing is going to be a concern for years to come.
At Honor, our favorite saying is: “The smartest person in the room is the one who surrounds himself with smart people.” We have some really badass consultants, team members, and partners on the banking and development sides. When things get tough, we always have someone to call.
We hope we are your ‘someone to call’— reach out to us today to start a conversation about a project you’re thinking about, planning for, or ready to move on.