“I have to modify some things in my life.”
Limke is up against what many renters across the region and nation are facing: rising rents outpacing salary raises among the worst inflation in roughly 40 years.
Rents saw a record 11.3% increase nationwide in 2021, according to real estate research firm CoStar Group. The average rent for a studio apartment in the city of Dayton is $907, a 20% increase compared to a year prior, according to data from Rent.com. The average rent for a one-bedroom in Dayton is $1,026, a 12% increase, and the average rent for a two-bedroom apartment is $947, a 3% increase.
Market rents have been raising for years, said Jennifer Illanz, president of the Greater Dayton Apartment Association’s Board of Directors. The average rent growth has typically been about 3-4%, but recently it has increased to an average of 7 to 8% growth, Illanz said.
“The region and the country have a shortage of rental housing,” she said. “Occupancy rates are at all-time high, which further strains our nation’s limited and aging housing stock and places upward pressure on rents.
Some of the contributing factors include inflation, the supply chain and labor shortages that are further straining the housing industry, Illanz said.
“With the cost of maintenance supplies, construction cost and wages, that has made a huge impact to communities,” she said.
The red-hot housing market has had a large impact on raising rents, Illanz said.
“With housing pricing going up, that has pushed up market rent pricing,” she said. “In addition, people who have sold their homes have turned to renting due to not being able to find a new home to purchase. With limited availability, that has caused communities to raise rents even more.”
Rent sticker shock
There’s a misconception that rental housing owners enjoy large margins, according to the National Apartment Association. But according to a 2021 survey by the organization, only 9 cents of every $1 are returned to owners as profit. The remainder is spent on the mortgage on the property (38 cents), operating expenses (17 cents) and property taxes (15 cents). There are also capital expenditures, including roof and HVAC replacements and other important repairs (11 cents) and payroll expenses (10 cents).
That’s little consolation to 26-year-old Corenda Williams, who said she received 30 days notice in December that rent for her two-bedroom apartment in Moraine would be increasing from $769 to $1,100 (43%).
“I was definitely mad because I just didn’t have it in my budget,” said Williams, a home health aide and single mother of four children between the ages of six months old and 9 years.
“I base my bills off a certain percentage, so when I’ve got 30 days to come up with a whole lot more money ... it becomes a budget issue. I’m definitely struggling.”
Dipping into her savings has helped to a degree, as has relying on a lot of overtime hours, but Williams said she still must live paycheck to paycheck, sometimes owing people money by the end of the week.
The skyrocketing cost of gas doesn’t help, she said. Williams drives a Yukon Denali for her 25-mile commute to work, a vehicle she chose in part because it offers three rows for transporting her children.
She said she has sought a place that charges a lower rent but hasn’t found one.
“I’ve looked at other options, and I’ve been working on my credit to be able to buy, but to have somewhere to move into is impossible,” Williams said. “When there is somewhere open, you have to have three times the amount of income, and nobody has three times the amount of income to move into somewhere for a first month. It’s just insane.”
What can be done?
So what’s the long-term solution to slow the rent-rate surge?
“Build more units,” Illanz said. “We need more housing at all price points.”
Adam Blake, vice president of housing for CountyCorp, a housing solutions nonprofit that serves middle- and low-income residents, said he has been with the organization for 15 years and has never seen rental rates higher and vacancy rates lower in the Dayton area.
“The norm may have been 1 or 2 percent a year,” Blake said.
CountyCorp houses “pretty much 100% vulnerable populations,” he said. That includes disabled veterans with HUD-Veterans Affairs Supportive Housing (VASH) vouchers or people with housing choice vouchers.
“We are 99.9% occupied,” he said. “I think we have one vacancy in 80 of our units that we own and manage ourselves.”
People who have rental subsidy vouchers often cannot find anywhere to live because landlords are not obligated to take a tenant who pays with them, Blake said.
“And if you’re a private market-rate landlord, why would you put your unit through the inspection protocol that’s required when you have a waiting list of people for that unit that don’t have any requirements that come with it?” he said.
Miami Valley Nonprofit Housing Collaborative retained Bowen National Research in June 2021 for the purpose of conducting a Housing Needs Assessment of Dayton and Montgomery County. That assessment showed that 46% of the county’s renter households earn less than $30,000.
Households earning $60,000 or more annually comprise nearly 60% of all owner-occupied households, according to the assessment. Between 2021 and 2026, all of the projected owner household income growth in Montgomery County is expected to occur among these higher income households, leading to increased demand for higher-end housing.
Part of the reason rental housing is facing a shortage in the Dayton area is because of the tornadoes that ripped through the region in 2019, destroying 1,500 affordable housing units, Blake said.
“Some of those have been brought back online, but many have not,” he said. “If there’s any good news moving forwards, it’s that that the state has released $10 million of Community Development BLOCK Grant Disaster Recovery funds through the Ohio Housing Finance Agency and ... they plan that going into three projects, about $3 million per project.”
There are probably four projects underway that will try to vie for those funds, and those commitments will be made late this year, he said. Construction on those units will likely occur in 2023, Blake said.
Those projects will account for 200 units in all, a pace that isn’t initially enough to completely make up for the shortage in rental housing.
Christian Gallegos, 25, said rent for his three-bedroom Dayton-area apartment, which he splits with a friend, increased 10.4% in 2020 from $770 to $850, before soaring by 64% and 78% in 2021 to $1,400 and $2,500, respectively.
“I had to find at least another job or side hustle so I can pay my rent and bills,” he said, noting his friend did the same. “Everything has gone up the last few months.”
Dayton isn’t the only community that is seeing rent hikes, according to Rent.com. Miamisburg and Beavercreek saw average rent for one-bedroom apartments increase 21% and 22%, respectively, while Springfield and Kettering rose by 16% and 13%, respectively.
Lebanon rose by 17% on average rent for a two-bedroom apartment, while Fairborn and Miamisburg both increased by 10%.
Limke said he’s thankful he has stable employment and a good place in which to live, but the rent hike for his Dayton apartment will mean a change in his “default” mode of dining out, with peanut butter-and-jelly sandwiches gracing the menu a couple of times a week and mac-and-cheese with tuna trumping going out.
Working jobs at STEM camps this summer will help Limke offset the upcoming rent raise. Even if he were to move elsewhere, Limke said he realizes he’d “pretty much be running into more of the same from the economy as a whole.”
“If I were to buy a house now, I’m going to pay quite a bit more ... so right now I’m planning to stay put,” he said.
DID YOU KNOW?
The most expensive neighborhoods in Dayton are Oregon, where the average 1-bedroom apartment rent goes for $1,211, Downtown, where renters pay $1,067 on average for a 1-bedroom apartment, and Shroyer Park, where the average 1-bedroom apartment rent goes for $724.
The most affordable neighborhoods in Dayton are Eastern Hills, where the average 1-bedroom apartment rent goes for $489, Burkhardt, where renters pay $545 on average for a 1-bedroom apartment, and Hillcrest, where the average 1-bedroom apartment rent goes for $550.
The most popular neighborhoods in Dayton are Downtown, where the average 1-bedroom apartment rent goes for $1,067, Grafton Hill, where renters pay $625 on average for a 1-bedroom apartment, and Five Oaks, where the average 1-bedroom apartment rent goes for $625.
SOURCE: Rent.com
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