After multiple years of decline following the Great Recession, building project values have bounced back, according to data from Dayton and Montgomery County permit applications.
Growing confidence in the economy has local companies and institutions expanding their footprints and workplace amenities, and some are investing in new facilities.
The housing market in downtown Dayton and other pockets of the county continue to sizzle, and home builders and developers are scrambling to bring new units online.
Last year, the city of Dayton issued 264 residential building permits for projects that have an estimated value of $9.4 million, according to permit data. That was up from 257 permits in 2015 for projects worth an estimated $4.7 million.
Montgomery County issued 754 residential permits in 2015, a slight uptick from both 2014 and 2013.
Building permits are a good indicator of future real estate supply levels, said Jon Schindler, coordinator of membership and marketing with the Home Builders Association of Dayton.
An increase in residential building permits typically suggests pent-up demand for new construction, he said.
But Schindler cautioned that permit numbers are not always an accurate indicator of investment and activities.
The values of projects seeking permits are self-reported by applicants. Montgomery County only asks for the value of the architectural work, so the project estimates do not include plumbing and mechanical investments, which can account for one-third or more of a project’s cost.
Dayton’s residential construction market was strong in 2015, and residential builders are very optimistic about this year, Schindler said. Builders like Charles Simms Development are catering to a growing segment of the market that want the urban lifestyle, including many young professionals, he said.
“(We) are still in a slow and steady recovery,” he said.
Charles Simms Development is building new town homes near the 2nd Street Market, with the first buyers moving in this weekend.
The company also is building ultra high-end, four-story town homes on Monument Street, near the YMCA of Greater Dayton. The upscale homes are expected to open in June.
“I think 2015 was definitely a little better than 2014, and I think 2016 will be a little better than 2015,” said Charlie Simms, the company’s owner.
Woodard, the developer of Water Street, said single-family projects appear to be on the rise and multi-family activity is at levels the region has not seen in years.
He said the commercial side has been bolstered by major institutional projects such as the Dayton Metro Library and the Dayton Children’s Patient Tower, along with major retail activity at Cornerstone and Austin Landing.
The Water Street Flats opened 24 apartments in September, which are fully leased. The remaining 191 units will be opened in two phases this year, with 134 units opening in late spring and 57 in late summer.
While downtown Dayton’s housing market has been scorching, its commercial market has been lackluster.
Dayton is home to scores of obsolete and worn down office buildings and industrial facilities. The city’s commercial vacancy rate remains stubbornly high.
Dayton issued fewer commercial building permits last year, and the collective value of the projects was down 36 percent from 2014.
However, 2015 still had the second highest combined value of building permits for construction projects since 2008, with 310 projects valued at $85.3 million.
Notable building permits issued in Dayton were for plans to renovate health care centers, build an athletic complex for Chaminade Julienne Catholic High and reuse of an abandoned building in the Oregon Historic District as a boutique and restaurant.
Permits also were issued for projects to remodel apartment complexes, renovate commercial buildings, add a grocery store in southwest Dayton and convert an empty building on East Third Street into housing and hospitality space.
Andy Goetz, vice president of Shook Construction, said more work is coming out right now than local firms have seen in the last five years.
Shook Construction was selected to be in charge of the second segment of the massive facilities project for the Dayton Metro Library. The firm also is overseeing the $6 million project to build CJ an athletic stadium.
Goetz predicts a strong commercial construction market this year because employers and institutions are investing in their facilities, with education and urban housing projects leading the way.
“I think people have been holding back for three, four or five years, and they’ve decided it’s time to cut loose,” he said. “I have large school projects on my desk right now.”
Commercial building permits in Montgomery County last year increased 5 percent from 2014.
The county, however, saw the collective value of projects issued permits for residential and commercial construction fall last year to $536 million from almost $664 million in 2014.
But the overall value of residential and commercial projects issued county building permits last year was the second highest total since 2007.
“What I take from our current level of activity is that it’s truly broad in the types of things getting built,” said Maury Wyckoff, chief building official with Montgomery County Building Regulations. “Any indicators I see in my department suggest we’ll have another good year this year as well.”
Furthermore, the numbers in 2014 were boosted by the building of the Procter & Gamble distribution center in Union, said Wyckoff, with the county building regulations department. The facility cost about $90 million.
Wyckoff said multi-family housing has emerged as a main driver of construction activity, which is primarily concentrated in Miami Twp., Washington Twp. and Huber Heights.
Large commercial projects in the county have included new and rehabilitated apartment complexes, the new Northmont High School, the Flats at Austin Landing, the Springhill Suites by Marriott in Butler Twp. and the Austin Landing cinema.
As a result of the Great Recession, local companies and employers prioritized their spending and often chose to invest in people and equipment instead of facilities and work space improvements, said Dave Dickerson, Miller-Valentine Group’s Dayton market president.
Businesses and organizations many times opted to defer spending on major capital projects and real estate and spent money only for emergency repairs or small-scale projects, he said.
But the economic climate has improved and businesses are on better footing, and increasingly they feel more comfortable making significant investments to upgrade the quality of their workplaces or relocate to new homes, he said.
“Companies need confidence in themselves and the economy to make that move,” Dickerson said.
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