Apartments are opening at a rapid pace in Dayton, especially downtown. But few new homes and condos are being built in the city, a Dayton Daily News examination found.
Some developers, home builders and real estate professionals told this newspaper the apartment boom can’t last forever and people eventually will want opportunities to own.
They say plenty of people would be willing to buy in the greater downtown area if more product — and the right kind — was available.
"There are a whole lot of people downtown who are renting who have owned homes before, and they are obvious logical homeownership candidates, but we don't have anything for them," said Steve Seboldt, an agent with Sibcy Cline Realtors and chairman of the Downtown Priority Board.
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Charlie Simms, president of Charles Simms Development, was an urban pioneer who built new homes in downtown Dayton in 2010, while the economy was still reeling from the housing crisis and Great Recession.
He invested in downtown housing when few others dared.
But his first downtown project, Patterson Square, was a success. So was his next project. And so were several more after that.
Charles Simms Development has now built 117 townhomes in the greater downtown area since 2010, and they have become increasingly more upscale and pricey.
Simms sold 22 downtown townhouses in 2016 and 17 in 2017. He sold 10 homes in 2018 and three in 2019.
But Simms is nearly out of product. His last Monument Walk townhouse is on the market for about $490,000.
Simms Development has looked at multiple downtown sites for new home projects but land prices are very expensive, especially given the competition and apartment demand, said Robi Simms, Simms Development’s vice president of sales and marketing.
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Apartment developers have capital that a local for-sale builder cannot match, and also across the board builders are having trouble constructing affordable homes because of difficult-to-navigate zoning restrictions and permitting roadblocks, especially in high-cost urban centers, Simms said, citing comments from the National Association of Home Builders.
Simms Development would be able to build marketable and affordable homes if the city and other entities could give good incentives on land and the building process, Simms said.
Building costs have risen, he said, and there is a major shortage of residential building workers.
“Simms will be building in the city center and surrounding neighborhoods in the future,” Simms said, “there are only so many parking lots we can buy and build on.”
Other than Simms’ projects and some new condos in the Oregon District, major downtown housing projects almost exclusively have created new apartments.
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More than 575 new apartments have opened downtown in the last four years, and more are on the way.
In that time period, the city has issued only a few dozen permits for new home construction citywide, according to building permit data reviewed by this newspaper.
Crawford Hoying in recent years has created hundreds of new apartments in the Water Street District in downtown, as well as new offices, restaurants and a hotel.
Brent Crawford, principal and founder of Crawford Hoying, says his firm has explored adding new condos in its thriving mixed-use district and may end up building some.
But demand for apartments has outpaced interest in condos, and builders have had trouble getting prices for condos that make the projects worthwhile, he said.
Crawford Hoying has built new condos in Dublin, Ohio, and has more under development, Crawford said, but the price points are very different than in Dayton.
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There is certainly demand for new homes and condos in the downtown area, especially one-story flats that appeal to aging empty-nesters who are looking to downsize, said Seboldt.
Many people rent apartments to try out downtown, Seboldt said, and they quickly fall in love with its walkability and the urban living experience and would be interested in buying a place.
But but there’s very little product on the market, Seboldt said, and units often sell quickly and fetch high prices that are unaffordable to many housing-seekers, especially younger people.
Seboltd said it is somewhat surprising that no other developers have followed in Simms’ footsteps and have tried to bring new for-sale product downtown, since Simms’ projects were a hit.
Seboldt said maybe it has become too hard for developers to make money from new condo and home projects because of land and development costs.
“People will on average will pay more per square foot to be downtown,” Seboldt said. “But they are only willing to pay so much.”
Seboldt said he would like to see more affordable homes built in the downtown area. But he says he doesn’t know what it will take for that to happen.
There is a shortage of housing in places where people want to live, and Dayton's continued growth depends on building more of every kind of housing, including subsidized housing, market-rate units, homes, apartments and multi-family, said Eric Farrell, CEO of the Home Builders Association of Dayton.
Baby boomers are holding onto their homes longer because of a lack of new or reasonably affordable product in places they want to live, Farrell said, and fewer homes on the market means higher prices, which hurts millennials who are beginning to hit the buying-age.
Millennials also have lower incomes than previous generations at the same points in their lives and they often carry heavy college debt, making apartment living more attractive because it is less of a financial commitment, some real estate professionals say.
Dayton and surrounding areas need new home product, especially to accommodate job growth at Wright-Patterson Air Force Base and other places, said Lance Oakes, manager of DDC Management located in Austin Landing in Miamisburg.
“I think you are going to see a strong movement in the next couple of years of people wanting to come back into the closer population centers, so more infill development,” he said.
Oakes said Dayton’s new housing needs could be best served by pre-fabricated homes that are built off-site at factories and then shipped to empty lots.
He said factory-built homes could be an efficient and cost-effective way to create new, affordable for-sale housing.
One of the challenges to building new housing is the high cost of construction because materials, labor and land don’t come cheap in this market, Oakes said.
Dayton is a difficult place for production builder projects, because sites are scattered across the city, and they like efficiencies, density and scale, Oakes said.
A developer has proposed bringing 10 new market-rate homes to the South Park neighborhood, not far from downtown.
The modern and energy-efficient homes would be built by developer Trent Fisher in partnership with Slate homes, which specializes in prefabricated, “sustainable, low- maintenance” homes.
If Dayton can bring new jobs to the area, many people will want to live near where they work, and new homes will be in high demand, Oakes said.
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