The Cannery Lofts, a large apartment complex on East Third St,. has a waiting list to move in. And new construction condominiums Rubicon Square near Miami Valley Hospital and Sixth Street Lofts in the Oregon District are selling fast.
Downtown Dayton Partnership, a nonprofit group that promotes downtown, estimates as of the end of last year there were 814 apartment units and 165 condominiums downtown. Apartment units are 98 percent full and condos 97 percent full.
Downtown has the lowest vacancy rates, or number of empty available units, in the entire greater Dayton market, according to 2013 data from Miller Valentine GEM Real Estate Group. About 2,200 people live downtown, according to the partnership.
New housing projects “can only help” downtown Dayton, said David Dickerson, president of Miller Valentine GEM.
“What happens is you start building that residential base, and you start needing more services, so then you need dry cleaners, and supermarkets and drug stores and all of those components,” Dickerson said. “You start rebuilding a community essentially.”
It’s a chicken-and-egg situation. It’s easier to sell an apartment when there are several local businesses in walking distance, said Megan Bell, regional vice president for Resource Residential, the Philadelphia, Penn. company that in 2012 bought The Cannery.
“I think you’re experiencing more people that want to be downtown where they can walk for specific things…as opposed to getting in your car driving 15 minutes somewhere else,” Bell said.
To meet the growing desire for urban living, multiple housing developments are in the works. Between the plans announced and construction underway, as many as 365 units could come online in the next year or two.
Most recently, homebuilder Charles H. Simms, president of Charles Simms Development, announced this month plans to build his third downtown condominium project, Patterson Place, along North Patterson Boulevard. The new 31-unit project would join Simms' sold-out, 18-unit condominium project Patterson Square that opened in 2011.
Earlier this year, Simms also finished construction on the first seven units of Rubicon Square. Construction starts in 30 to 60 days at Rubicon on the next seven units for a total 14. Four units at Rubicon have sold to date.
Developer Oberer Thompson Co. is set to open this summer the 17-unit condo project Sixth Street Lofts on East Sixth Street.
Two big projects on the drawing board — Student Suites' 200-unit student housing plan on Ludlow Street that was announced in April; and Lux Lofts, a 110-unit renovation of the David Building at 115 E. Third St. —could be the first rental complexes of more than 100 units to come downtown in a decade.
Downtown Dayton has not seen apartment projects of that size since The Cannery, with 156 units, and St. Clair Lofts on St. Clair St., 108 units, opened in 2004 and 1999 in order.
Plans for other projects have failed or been delayed, some due to the onsest in 2008 of the recession.
Developers today are dealing with tougher lending standards and comparatively low monthly rents typical to the Midwest, said Aaron Sorrell, Dayton’s director of planning and community development.
“The rent that you can charge right now in Dayton doesn’t fully cover the cost of (renovating a building),” Sorrell said.
Market studies show downtown rents at 85 to 88 cents per square foot. Sorrell said they would need to be at $1.05 or $1.10 for the market to take off without public subsidies.
The Student Suites project, to be restricted to students, is being financed through tax-exempt bonds by a nonprofit group.
Lux Lofts is still being financed, according to Excel Realty Group President Peter Jobson. He received historic preservation tax credits and hopes to get additional funding from Ohio Housing Finance Agency to close the gap between rents and renovation costs.
An active place
“The more activity there is, the more optimism there is, the more demand there is for downtown housing,” said Alan Lindy, whose company owns St. Clair Lofts.
Lindy Communities, based near Philadelphia, Penn., bought the property in 2010. The property has about 10 retail spaces.
“There’s a general feeling that Dayton has seen the worst of times and is gradually improving,” Lindy said.
Lauren and Aaron Hamer moved to a condo at Cooper Lofts on Harries Street more than two years ago.
“I just always want to be at the core of arts and entertainment,” said Lauren, 26, manager of prospects and new gifts at Dayton Society of Natural History.
They like being in walking distance to bars and restaurants. “When we’re done with work, we’re home. If we want to go eat, we walk,” Aaron said. Aaron, 29, is chief financial officer at a small manufacturing company.
“There’s not a critical mass of people yet,” Hamer said. “I think if more people move downtown, it will create a mass and the business case follows” for more retail and services.
Greg Dart, a Bellbrook contractor working on improvements to the St. Clair Lofts building, has decided to rent there. He hears doubts about downtown from friends in Centerville and Kettering.
“But that’s because they don’t come down here,” he said. “If they started coming, they’d see you can walk to the Oregon District from here, you can walk to Schuster, to Riverscape in no time, the ballpark, and it’s safe.”
James Harris, 43, has lived in downtown rentals and an Oregon District home for years with his wife and children, ages 12 and 6. He recently opened Serendipity Bistro at St. Clair Lofts where they now live.
“I want the kids to live in an urban environment, but we’re probably rare,” Harris said. “You’re never going to get people my age with children moving into Dayton unless you fix the schools.”
Moving forward
If downtown can sustain more housing, the biggest challenge for builders and developers is the cost. Downtown residential construction is usually built upward, and the cost of building vertical can be more expensive for parking and elevators, Dickerson said.
It can also be more expensive to bring historic, vacant buildings up to modern day building and energy codes than it is to do new construction.
Sorrell said public-private partnerships are the key, and Jobson, of Lux Lofts, echoed that thought. He said he wants to work with the city, citing the strength of the Greater Downtown Dayton Plan’s long-term vision of an urban neighborhood with more housing.
As he completes the Sixth Street Lofts, Bill Hibner of Oberer Thompson said he believes in downtown demand, fueled by young professionals, and supported by the fact that living downtown puts you “10-15 minutes from anywhere.”
“Charlie Simms has shown that if you build it, they will come … if you build the right product at the right price point,” Sorrell said. “The successful downtown developers know the market and know their niche.”
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