High occupancy rates, low turnover and fallout from the 2019 tornadoes have led to a tight rental market and climbing rents.
The vacancy rate in the Dayton market hovered at 4.8% in the beginning of this year, according to CBRE, a Cincinnati-Dayton real estate firm. Since 2015, the vacancy rate for the region has hovered between 6% and 8%.
Average asking rent growth was also 4.5%, according to the CBRE report, up from historical raises of about 2.5%. Average rent in the Dayton region is about $890 per month, according to the report.
The region and the country have a shortage of rental housing, said Lloyd Cobble, president of the Greater Dayton Apartment Association
Just two properties, with a total of 176 units, opened in the Dayton market in 2020, according to CBRE. One, the Fire Blocks District in downtown, is high-end housing with an average rent of about $1,400 and was about 91% occupied in April, according to the report.
The second, Element Oakwood in Kettering, is also high-end housing, with an average rent of around $1,800 for a one-bedroom apartment. That building is also over 90% occupied as of April.
Last year few people wanted to move in or out of apartments, Cobble said. But this year, once COVID-19 vaccines became available, more people began moving.
The hot housing market also has contributed, Cobble said, as some people who sold their homes have rented apartments when they couldn’t find a new home to purchase immediately, Cobble said.
“Because there’s such greater demand, that’s another reason why the prices just keep going up,” Cobble said.
Marianne Bailey lived in Washington Twp. with her golden retriever, Othello, up until last year, when she found out the monthly rent on her three-bedroom condo would go up $100. Bailey said she doesn’t want to buy a home as the upkeep is both costly and time intensive.
She decided to look for a new apartment, knowing she would be able to house sit for about five months for clients of hers. But her search proved harder than she’d imagined.
Not only were people asking for $800 to $1,000 for a pet deposit — if the building even allowed dogs — she was surprised by how high the rent was and the poor condition of many of properties.
A friend of hers ended up renting her a house in Fairborn, giving her the pet deposit for free.
Tornadoes still affecting the region
Adam Blake, vice president of housing for CountyCorp, a housing solutions nonprofit that serves middle- and low-income residents, said there’s simply not enough housing in the region.
The problem has been exacerbated because so much middle-income housing was destroyed in the 2019 Memorial Day tornadoes.
The money is coming to replace those housing units, Blake said, especially in Trotwood, Harrison Twp. and Dayton. But right now, that housing is gone. People have moved to other parts of the region.
“I tell people to wait, because there will be new units coming online,” Blake said. “A lot of projects have been approved in Montgomery County and the city of Dayton, and those will be energy efficient, affordable units.”
That’s not fast enough for some.
Athena Dean, a housekeeper who lives in Fairborn, said her landlord is selling the property where she lives now. She has to move by Aug. 1.
She is also having a hard time finding an apartment in her $600 a month budget where she both feels safe and can take her dog, Ida. She’s lived in her current home for about six years and says she wasn’t prepared for current market prices.
Dean wants to stay in the Fairborn, Xenia or Yellow Springs area, though she’s considering other areas. She said she’s been reaching out to friends in real estate, who are keeping an eye out for places.
“One place I called had availability, but not until the middle of September,” Dean said. “I feel defeated.”
High cost of construction
If there’s a demand, why aren’t developers building more units?
Construction costs remain high, said Rusty Lykes, Oberer vice president of property management.
Oberer is looking at developing new apartment housing, Lykes said. But it costs between 30% and 40% more to build multifamily housing today than it did two years ago.
Oberer manages about 30 properties, some of which it owns and some it manages for other owners. Oberer has properties throughout the region and Lykes said all of them have high occupancy rates.
Some other developers announced plans earlier this year to build market rate apartments in Huber Heights, downtown Dayton and other areas.
Four properties, totaling 1,153 units, were under construction as of the second quarter of 2021, according to the CBRE study. The most active submarket is in Miamisburg and Moraine with 440 units, followed by Beavercreek and Bellbrook with 405 units, and Northeast Dayton with 308 units.
Cobble noted the high cost of construction items, such as lumber and paint, have also contributed to the prices that some landlords are charging.
Advice for those searching
Those who are looking for apartments right now should start early and expect it to take a while to find a place.
Lykes said Oberer has not taken advantage of the market, but plenty of landlords have raised rents and not made repairs. It’s important to live in a home that has been well maintained, he said. Look at the apartment before renting and check to make sure there aren’t any major problems, like a roof leak or missing appliances.
He suggested people get on waiting lists early and put down deposits if they find a place that allows it.
Blake suggested calling the Greater Dayton Apartment Association, CountyCorp and several landlords.
Bailey, though, had some advice for people who want to move: Don’t, if you can help it.
“If they’re in the scenario where they can just hold off for six months to a year and not have to move right now, if you think that what you’re paying is too much, do your homework,” Bailey said.
Contact Eileen McClory at 937-694-2016 or firstname.lastname@example.org.
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