“It’s one of the many challenges our historically red-lined communities have in Dayton, Ohio,” said Monica Snow, vice president of Preservation Dayton, a neighborhood advocacy group, and a Oregon District resident.
“One is not only out-of-town investors but current investors buying up property. Dayton has plenty of irresponsible investors who either let the properties deteriorate or just let them sit empty.”
The Fed data says activity in these “hotpots” is up 2.5% since 2018. From 2018 to 2024, commercial investors were involved in 3,192 single-family home transactions in Montgomery County hotspots.
The report shows that 14% of those investors were from other states, as of 2024.
These findings come amid calls from the Trump administration and state lawmakers to encourage homeowner sales over massive institutional investors.
Yale Avenue
The city of Dayton last year implemented a civil code enforcement tool against non-resident owners. Snow said in the past LLCs, or limited liability companies, could not be brought to Dayton municipal court. Residents could only seek criminal charges against LLCs. The new city legislation seeks to hold LLCs accountable.
Dayton’s civil penalty administrative process went live last July, with the city early on issuing about 702 civil penalty warning notices and 43 civil citations in the first couple of weeks.
Steve Gondol, Dayton director of planning, neighborhoods and development, said the law is having an impact. Taking a civil enforcement route with these violations often makes more sense, he said. That route requires less staff time and offers the city a new tool.
Preservation Dayton applauds this new measure and also advocates for vacant property registration. The idea is to register empty properties, and if owners are not actively trying to sell, rent or renovate a property, their annual registration fee would escalate every year.
Credit: Nick Graham
Credit: Nick Graham
Snow points to 115 Yale Ave. in Dayton, a property that has long been on Preservation Dayton’s radar.
Snow said her group sought to negotiate a workable purchase price with a previous owner there to no avail.
She brought the large home to the attention of the Dayton View Historical Society, where she met Talib Petaway, a local investor and West Grand Avenue resident.
Petaway bought the home with the encouragement of Preservation Dayton.
Petaway is a member of Dayton View Historical Society. He’s also on the Gem City Market board.
The limited liability company of Petaway and his partner, Paul Wise, Dedicated Gemz, bought the Yale home last August for nearly $179,000, according to Montgomery County property records.
He said Preservation Dayton members sought to get him involved. Negotiations with the Yale Avenue home’s previous owner, who lives in Georgia, took six months.
Petaway’s thinking was simple, as he described it.
“I wanted to make sure that it (the Yale Avenue home) goes to a homeowner who is going to live in it,” he said.
A balance
Coldwell Banker Heritage owns about 1,500 Dayton-area homes.
Ron Sweeney, owner and managing partner of Coldwell Banker Heritage in the Dayton area, says he understands the misgivings.
“First, it is always better for individuals to own their own homes,” Sweeney said. “Specifically single-family homes. And neighborhoods and communities benefit from this as well.”
There should be a balance, he said.
There will always be a rental market, especially in a community with a military installation like Wright-Patterson Air Force Base, he said.
Said Sweeney: “We do not see this as having much of an impact in our community over what it has been. Also to note, we are in the 63rd largest MSA (metropolitan statistical area, a Census designation), and some of the big institutional investors are focused on Atlanta, Charlotte, Tampa, etc."
Ohio state Sen. Louis Blessing, R-Colerain Twp., who proposes legislation to tax LLCs with large property portfolios, rejects the idea that institutional ownership is a non-issue because these investors comprise a small percentage of overall owners.
“This is a huge, huge issue in the neighborhoods where it happens,” Blessing said.
The “Corker kickback” — a term for a tax measure named after retired Tennessee Sen. Bob Corker, from late 2017 — “really supercharged” purchases of these homes by institutional investors, Blessing contends. The name refers to what essentially is a 20% tax deduction for pass-through business entities, like LLCs, seen to especially benefit real estate investors.
That’s why institutional purchases of homes sped up beginning in 2018, Blessing believes.
‘Hotspots’
The concern is that when investors buy homes with cash or a single check, that makes it harder for families or individual buyers in the market to compete, said Matt Klesta, a senior policy analyst for the Federal Reserve Bank of Cleveland and author of a new report on the topic, “Hotspots: Investor-Owned Home Trends from Select Counties in Ohio and Pennsylvania (2018-2024).”
One concern for neighborhood advocates is that out-of-state investors, or their temporary tenants, aren’t maintaining or investing in homes, leading to neglect in areas with a high concentration of investor ownership.
The Fed conducts a twice-yearly community issues survey, Klesta said. That concern has popped up in those surveys.
“Something we’ve heard repeatedly was concerns about investors competing with first-time homebuyers, investors using cash to buy homes in competition with first-time homebuyers, concern about out-of-state investors, investors not maintaining properties,” he said.
A map of Montgomery County in Klesta’s report shows a wide swath of red, representing a “hotspot,” in Dayton stretching south around the core downtown area, from Northeast Dayton to West Dayton.
‘A lot of concern’
The report examines trends in seven counties — Cuyahoga, Franklin, Hamilton, Lucas, Summit and Montgomery counties in Ohio, as well as Allegheny County in Pennsylvania.
In 2024, Summit County around Akron saw 33% of single-family homes in census hotspots identified as investor-owned. Lucas County, home to Toledo, had 31% of single-family homes in hotspots owned by investors.
In Montgomery County, the hotspot percentage was 30%
“If you look at it from that way, Montgomery (County) is one of the higher ones,” Klesta said. “You see Montgomery is up there close to a third (of hotspot homes owned by investors). And these are areas of high investor activity.”
That shift in ownership from owner-occupied to investor-owned homes in Montgomery County’s hotspot was put at 3.2% between 2018 and 2024.
What attracts investors to these kinds of homes?
Two things, Klesta said.
“One is home prices are, when you look at them nationally, they’re fairly affordable, definitely compared to the coasts,” he said.
The other factor: Rents commercial owners can charge in these areas are high enough to recoup their investments “pretty easily,” he said.
“It’s impacting a lot of our larger counties,” Klesta said. “Investor activity is high in a lot of the counties that we’re looking at.”
“There’s a lot of activity going on, and a lot of concern in our communities,” he added.
‘Saving one house at a time’
Petaway hopes to sell the Yale property after renovation work, perhaps after mid-March. He estimates that he and his partners are investing about $140,000 to $150,000 into the property, and he acknowledges that a return on his investment may be, as he put it, “minimal, to say the least.”
Still, he says he remains motivated. He sees “intrinsic value” in these older homes. “For me, it’s saving one house at a time.”
“For me, it’s really a call to duty,” said Petaway, who has lived in Dayton since 2018. “These homes have a ton of value.”
Snow, for her part, expresses frustration with talk of a affordable housing crisis when homes such as 115 Yale are available and still show real beauty.
“That’s kind of one of our last historic neighborhoods that have not taken off,” Snow said, referring to Yale and the area around it.
Petaway, 39, also owns two duplexes off Grand and Catalpa. A cyber security engineer and father of seven, Petaway sees part of the value of these homes as a place to raise families.
“I do look forward to more owners buying over there,” he said. “And not just in that area, but in the vicinity. Because we have a lot of good things going on. We need more, not just passionate people, but people looking to grow their families, with as many single(-family) homes as we have.”
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