Mark Sanchez: We need more housing in this state, certainly here in Kent County, West Michigan, Kent and Ottawa counties, Muskegon County. And statewide, the Michigan State Housing Development Authority estimates there's a shortage of about 140,000 housing units. That's compared to demand and need. And that's the most recent figures from that state agency. And this story comes to us from our colleagues in Detroit, Nick Manes at Crain's Detroit Business. And basically, there is some data that the Home Builders Association of Michigan put out in the field last week that said in the first half of 2024, there were nearly 6,000 single-family housing permits pulled by home builders in the state. That's an increase of more than 21% from the same period the year before. So, as you say, beginning to see. Perhaps there are some early signs that even with the interest rates still remaining high, your home builders are really beginning to respond to this issue of we need more housing in Michigan and not just any housing. We need housing. Obviously, people can afford affordable housing is the buzzword right now, because with this housing shortage, that's forced housing prices up on the last few years. So, it's a real issue. And now here's a little bit of data that suggests, as you say, beginning to see that this is beginning to get addressed and over the next couple of years, we'll see how this is, is this a trend? Is it emerging? Is it a trend that's going to continue of how much new housing stock is built in the state?
Patrick Center: Sustainability will be the key in all of this over time as you talk about projections and trends. Another trend that we're seeing and that is higher costs associated with public universities and of course, tuition being the primary suspect.
Mark Sanchez: Yeah, you know, getting a college education is a, is an expensive proposition in America these days. And it is that time of year for tuition increases at public universities in the state. And we've seen these boards at the universities acting within the last few weeks. It's, you know, that new fiscal year is starting. And so, they make those adjustments based on what they're doing with their costs. And bottom line, at Michigan State, there's a flat increase of about $235 per semester, $470 per year in tuition for a full-time undergraduate student. That equates to about a 2.7% tuition increase for in-state undergraduate students. At the University of Michigan, you're looking at about a 2.9% tuition increase for in-state undergraduate students and 4.9% for out-of-state undergraduate students. Grand Valley State University here in town, boy, looking at about a 3.5% tuition and fee increase. And Western Michigan, similar 4.5% tuition increase for residents and first-year undergraduate students. As I say, it's that time of year, your universities, just like anybody else in the economy, are feeling higher costs and cost increases, so they need to adjust their rates accordingly.
Patrick Center: There's that floor funding that comes from the state. Has that increased over time?
Mark Sanchez: You know, a lot of times, quite often it's always that vantage point from where folks sit. There are folks who say, you know, yes, we're putting more money into higher education. In real dollars, yes. But what your colleges will say is that it doesn't keep up with these cost increases, you know, academics don't work for free and they expect to be paid well too. So, you're seeing this, you're also seeing some declining enrollment, rising salaries, goods and services, continued need for investments in campuses, especially for safety and mental health concerns. And your colleges, your public universities will say what the state's been putting into the college aid fund has not been keeping up with these cost increases.
Patrick Center: We're talking with Crain's Grand Rapids Business Senior Writer, Mark Sanchez. Furniture makers are predicting sales growth as what you are calling, or maybe somebody in the story is calling a “steady march” back to the office.
Mark Sanchez: That was from the executives. They still call it Herman Miller, but MillerKnoll and Steelcase recently reported their latest quarterly sales. And they were down a little bit of industries a little soft right now, but increasingly they're seeing, um, demand pick up. Herman Miller or MillerKnoll, I keep making mistakes, but they're saying the fiscal year that just started for MillerKnoll should be above what they reported in 2024. And for 2024, they reported about a 6.9% or maybe I'm getting my numbers messed up there, but they reported a little lower sales. And for the new fiscal year that just started for MillerKnoll, there's kind of a wide guidance they offered, but they could see some growth pick up. The good part in their quarterly report here last month was they saw their orders increase, their backlog orders increased 6.9%. Their order rate for future sales, that grew 12.4% from the previous quarter. So, there's some optimism there. And of course, Herman Miller reported or MillerKnoll reported just about $890 million in sales for the fourth quarter. And that was a 7.1% decline. And I say the fourth quarter for the fiscal year of 2024. In sales for the full year, they were down about 11% for MillerKnoll. Steelcase, a little better, only about a 3.2% decline in the most recent quarter. So, uh, they're doing a little better. But Steelcase's orders in the quarter grew 8%, globally 10% in America. So, you know, that's again, from both of these companies, it's an indication that demand is picking up, that there's an uptick. And all this, of course, is occurring as there's this ongoing, I don't know if debate's the proper word about return to office and people wanting to work from home. A lot of folks liked working from home in the pandemic and got used to it. But now you're seeing corporate America trying to bring people back to the office and kind of changing their offices to accommodate these hybrid work styles. And what the CEOs, when they were talking to analysts a week or so ago in their conference calls after reporting the results was saying they're seeing more corporations adopting this hybrid work schedule and also wanting employees to spend more time in the office instead of two days a week going to three or four days a week instead of three days a week, four or five days a week. But at the same time having some kind of hybrid flexibility in their work styles.
Patrick Center: Curious to get your perspective on this because we are talking about that hybrid, the remote and then working on site. What then does the hybrid workspace look like? Are we seeing a reinvention of the office?
Mark Sanchez: Yeah. And you've seen it for a number of years. The pandemic that hit us four years ago, it's just simply accelerated this trend. And it's called hoteling space where workers, you don't have a permanent workspace, a permanent cube or permanent desk. On those days you're going into the office, you book a work at this space that day. So, you're seeing more of these open concepts with spaces there for privacy. When you have to have that private conversation or meeting one-on-one or meeting in a group that needs privacy. But you've seen this actually for many years is accommodating this home-work balance. But now when the world changed here in 2020 and as we came out of the pandemic, this trend really accelerated in the way offices are being designed. And corporations with large workforces are now moving to accommodate this trend a little bit more while still wanting people to come back to the office more.
Patrick Center: Before I let you go, this would not be a Crain's Business Brief segment without healthcare. Trinity Health opened a new $6.5 million emergency center in Northern Kent County.
Mark Sanchez: Yeah, it's called Trinity Health Emergency Center - Rockford. It's on Northland Drive, just north of 7 Mile Road. Opened this week, it's a 24-hour ER that's, yes, run by a health system, but not part of a hospital. And this is a bit of a trend you're seeing in healthcare in America these days, where hospitals, health systems are opening these ERs that are not part of a hospital. And you can go in for a lot of different situations, including if you're having chest pains or symptoms of a stroke. They can assess, evaluate, perhaps stabilize your condition. And then if you need transporting to the big hospital downtown, they'll have you transported there. You've seen this one, that Trinity Health opened this week there near Rockford. There's another one that also opened, it's by Emergency Care Specialists PC. It's called RightCare Clinic. It's on East Beltline Avenue. Emergency Care Specialists, this is a practice of the emergency medicine doctors and they've opened their own kind of ER clinic for lack of a better term. And McLaren Health is building the new $40 million outpatient campus in Grand Ledge, west of Lansing. It's going to include a emergency department that again is not attached and part of a hospital. The idea is to have something that's a little higher level of care than what you can get at an urgent care center. Obviously if it's a traumatic injury or traumatic serious situation with a heart attack, they're going to send you to the hospital in downtown real fast. But for a lot of situations where people are going to a hospital emergency room, these new type of facilities can handle it very well. It's an emerging trend in healthcare. We're now beginning to see it here in the Grand Rapids market and the new Trinity Health Emergency Center - Rockford is open for business as well as the
Patrick Center: Crain's Grand Rapids Business, senior writer Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.