Grand Haven Opens Centertown to Short-Term Rentals: What It Means for Condo Values & Investor ROI

Grand Haven just took a consequential step for downtown-adjacent housing: City Council voted unanimously to allow short-term rentals (STRs) as a special land use in the Centertown/Center Town Overlay just east of downtown. The change adds a small but strategic pocket of properties to the map for legal STR operation — with guardrails — and it’s likely to influence condo pricing, buyer demand, and investment math immediately.

What changed — in plain English

• The vote & timing: Council approved the zoning amendment on Monday, August 18, 2025; the ordinance takes effect September 9, 2025. STRs are allowed by special land use permit (not by right).
• Where exactly: The Centertown Overlay spans ~2.5 blocks west of US-31/Beacon Blvd., between Columbus Ave. (north) and Franklin Ave. (south), railroad tracks (west) and 8th St. (east). Roughly 23 parcels are eligible.
• Key operating rules for this district: Buildings must keep the ground floor 100% commercial/retail along the main frontages and place STR parking behind the building (design intent to protect storefront activity and street parking). Permits are required.
• Citywide context: Grand Haven had about 350 licensed STRs out of ~5,200 housing units (≈6.7%) before this change; Centertown is an add-on to a list of districts already eligible (e.g., parts of Southside, Old Town, Central Business, Dune Residential, Waterfront-2, and some planned developments such as Grand Landing, The Elliott, and Harbourfront Condos).

Why this matters for condo values near downtown

1. New pool of “STR-eligible” units = fresh buyer segments. When an address crosses from “not allowed” to “permittable,” you typically unlock investor/second-home demand. Expect more showings and stronger offers for upper-floor residential over active storefronts in Centertown. (Grand Haven is also courting more overnight stays — see the proposed 128-room Residence Inn by Marriott downtown — which can support lodging demand nearby.)
2. Walkability premium, now monetizable. Proximity to the Boardwalk, harbor, and Washington Ave. shops already commands a lifestyle premium; the ability to rent short-term (legally) can translate that into income-based valuation for investor-minded buyers.
3. Limited supply of eligible parcels. Only ~23 Centertown parcels qualify under the overlay, and permits are discretionary (special land use). Scarcity often supports values, especially for new mixed-use condo projects designed to meet the ground-floor commercial requirement.

Investor snapshot: revenues, rates, and seasonality (2025)

• Mortgage rate tailwind: As of Aug. 14, 2025, the average 30-year fixed rate dipped to ~6.58%, the lowest of 2025, improving cash-flow math vs. early summer.
• Local STR performance (3rd-party trackers): Recent dashboards peg Grand Haven around ~59–63% occupancy and ~$370 ADR (figures vary by source, bedroom count, and season). AirDNA’s market card shows ~59% occupancy, ~$373 ADR, and ~$23.8K annual revenue per listing (median/average varies). Treat these as directional, not guarantees.

Back-of-napkin framework (for screening only):
Gross = (ADR) x (Nights Booked) — (platform & cleaning fees)
Then subtract HOA, utilities, insurance, supplies, property mgmt., city fees/registration, maintenance, financing to reach net. Grand Haven requires annual STR registration (fee currently $160 per STR), and parking standards apply. Always underwrite with conservative off-season assumptions.

Tip: Ask your agent for a comp set of recent condo resales with STR permissions vs. without within the Tri-Cities — the delta often shows up in days on market and price per ft² in prime months.

What sellers should do now (Centertown & nearby)

• If you own an upper-floor unit over active retail in the overlay: Talk to planning staff about special land use eligibility and design/parking compliance. Pre-package a permit roadmap for buyers; that transparency can lift offer strength.
• Time your listing to interest rate moves and inventory: With rates easing, consider a late-summer/early-fall list to capture buyers eyeing 2025 rates and 2026 income potential.
• Stage for dual use: Emphasize owner-use + rental readiness (lockable owner closets, durable finishes, noise attenuation, smart locks). This helps both primary and investor buyers envision the property’s flexibility.

What buyers & investors should watch

• Permit pathway & conditions. STRs are allowed by special land use only, and the ground-floor must remain commercial along key frontages; parking behind the building is required. Underwrite time and cost to secure approvals.
• Micro-location within the overlay. Parcels closest to Washington Ave. & 7th with strong retail neighbors may command higher ADR; confirm exact boundaries and any forthcoming Vision Plan streetscape changes.
• Downtown lodging pipeline. If the Residence Inn advances, additional visitors (especially off-peak) could spill demand into non-hotel options; weigh this when modeling seasonality.
• Regulatory stability. Grand Haven previously re-tightened STR rules (2017), and the city is now revisiting Centertown’s Vision Plan. Policy can evolve — structure your deals with compliance and exit flexibility in mind.

The Centertown Vision Plan (why it matters to values)

The city and DDA launched an update to the 2014 Centertown Vision Plan (RFP released July 25, 2025; proposals due Aug. 22). Expect new guidance on streetscape, placemaking, parking, and land-use mix — all factors that shape buyer demand and condo premiums.

Compliance & costs: checklist

• Registration: Annual STR registration with the City ($160 per unit currently). Late fees apply after Feb. 15.
• Parking: City standards include minimum spaces for STRs (citywide), plus overlay-specific design rules (e.g., parking behind the building). Verify with Planning.
• Where else STRs are allowed: Portions of Southside, Old Town, Central Business, Dune Residential, Waterfront-2, plus certain planned developments (e.g., Grand Landing, The Elliott, Harbourfront Condos). Centertown is newly added as special land use.

Bottom line

Opening Centertown to permit-based STRs creates a focused opportunity for mixed-use condos and upper-floor residential over retail. Expect incremental demand (and potentially price support) for properties that can prove a clear path to permits, good sound isolation, and walkable access to Washington Ave., the Boardwalk, and the waterfront. With mortgage rates easing and the Vision Plan update underway, the next 6–12 months are pivotal for both sellers prepping listings and buyers positioning for 2026 cash-flow.

Ready to move?

Contact the BP Realty team for local guidance on STR-eligible condos, up-to-the-minute zoning/permit pathways, and data-driven pricing for Grand Haven sellers and buyers. We’ll help you run the numbers, compare neighborhoods, and negotiate with confidence — whether you’re buying for income or selling for top dollar.