Local rents are expected to rise and vacancy rates shrink in the aftermath of the Memorial Day tornadoes, and some residents seeking new homes have reported seeing quick spikes in rents being charged.
The Harrison Twp. home Cortney Kovar rented was cut in half by a fallen tree by one of the 15 Memorial Day tornadoes. After getting over the shock, she began looking for other homes to rent. She said she found rents for some houses had already jumped more than $100 a month.
Dayton area renters are likely to see higher rents for years to come because of the number of housing units that were destroyed, said Lloyd Cobble, vice president of Oberer Management Services and president of the Greater Dayton Apartment Association. Annual increases are likely to top 3 percent at most area apartments as occupancy rates reach record highs.
“Occupancy is going to be at an all time high here soon because of the tornado. It’s got people looking for apartments so the market is going to get very, very tight,” said Cobble said.
The math is simple: hundreds of apartments and homes were destroyed, and their residents are now bidding against each other for the places that are vacant.
Immediately after the storm, Kovar started looking on every website she could find that advertised rentals. But there was nothing that kept her near her Northridge job. She also said she noticed rents had jumped from the last time she looked, before the tornadoes.
“I just started driving up and down the streets all through the neighborhood of Northridge. I’d see a house come up for rent and as soon as I called they’d say it’s already been rented,” she said.
She found a place in Northridge when a friend learned it would soon go up for rent. She was headed Wednesday to sign her lease with deposit and first month’s rent assistance from the Miami Valley Community Action Partnership.
The 15 Memorial Day tornadoes ripped through the Miami Valley destroying homes and apartment complexes. The destroyed several apartment complexes, some of which were home to dozens of units that were rented at prices which moderate-income residents could afford, said Cherish Cronmiller, president and CEO of MVCAP.
Among complexes with damaged units are Woodland Hills, in Trotwood off Westbrook Road, where up to 480 units were damaged, and the nearby Westbrook Village Apartments where up to 150 units were damaged. Other large complexes which were damaged were River’s Edge, in Harrison Twp. near Shoup Mill Road; and the Stillwater Park complex nearby.
Cronmiller said it could take up to eight months to get everybody who has been displaced into leases at area apartments. It will be particularly difficult to find rents as low as what the residents were paying prior to the storm, Cronmiller said. Current renters will also likely see the hikes when they renew their leases.
Occupancy rates have already jumped from around 95 percent to 98 percent or higher across the Miami Valley, Cobble said. Landlords typically aim for around 95 percent because 100 percent means rents are too low, he previously told the Dayton Daily News.
Rents have been rising with occupancy, increasing as much as 3 percentage points, Cobble said. Late last year area apartment managers expected the increases to slow to 1 or 2 percent or even level out as new apartments came on the market.
But that won’t happen now, Cobble said. He said he expects rents to continue increasing at least 3 percent over the next few years as the area tries to normalize.
But it could take longer than that, Cronmiller said. She expects the rebuilding process to take four or five years because contractors, electricians and others are inundated with post-tornado work and families are going to have to decide if they’re going to live in a rental that long or if they’ll buy a new house.
Apartment owners are also telling residents they’ll be in their homes in certain time frames that Cronmiller estimates the construction industry will struggle to meet.
“A lot of people are saying they want to rebuild, and that’s great. But when they realize what it costs to rebuild these units in today’s dollars, and when they also realize that potential zoning has changed where they’re at or that regulations have changed in respect to multi-family housing…that’s all going to play a part,” Cronmiller said.
Building costs are also high right now, she said. Cities also often don’t incentivize the construction of low-income housing because it can concentrate poverty, Cronmiller said.
“Not only is the demand there, but insurance rates are going to increase at a dramatic rate, I expect, after this disaster. So all those things and everything else that goes along with the cost of building materials and everything else, this will have a pretty big impact on the housing market here in Dayton for a number of years,” Cobble said.
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