People told Charlie Simms he was crazy for building new town houses in downtown Dayton. Seven years later, naysayers are nowhere to be found.
Simms, president of Charles Simms Development, is on his sixth downtown housing project, and his new City View town houses have sold for almost $200 per square foot — nearly double what his first downtown product fetched.
Simms said he plans to aggressively build downtown for the foreseeable future because the demand for urban living is intense and shows no signs of cooling off.
The downtown market is under-built by about 950 owner-occupied units, according to some local research, and the tight supply has helped push up prices and explains why condos are selling days after being put on the market.
“I think the market is going to continue to grow here,” Simms said. “There are two or three places we are looking at (for new housing), but I don’t want to jinx anything.”
Simms told this newspaper, “If you told me we’d be selling it $300 or $350 dollars a square foot in five years from now, I’d probably believe you.”
Simms has built more than 100 homes downtown since 2011 and wants to build more. There’s room for it.
An analysis last year by the Downtown Dayton Partnership found that the downtown market could support about 950 new owner-occupied homes, which it says was a conservative estimate.
The partnership is tracking about 238 owner-occupied condos and homes in the core of downtown.
“It’s nice to see growth in price per square foot, but part of that is that demand is way, way, way outpacing supply, and there’s a lot of interest in being downtown,” said Scott Murphy, vice president of economic development with the Downtown Dayton Partnership, who authored the analysis.
Dayton’s inner ring historic neighborhoods, such as South Park and St. Anne’s Hill, have nice homes not far from downtown, which has helped meet the strong demand for urban living, Murphy said.
But some empty-nesters and millennials who live downtown right now are renting and would like to buy if they could find the right product, he said.
Price is the primary concern for some people, while some residents who are older may want one-story flats that do not require they climb stairs, he said.
There’s lots of new apartments that have opened or that are coming downtown because developers have taken advantage of financial tools that can help pay for adaptive reuse projects, like tax credits, Murphy said.
Some of these incentives require developers to keep housing as rentals for a set period of time. Renovating rundown and old buildings tends to be expensive, and building new often can be cheaper, he said.
City View is Charles Simms Development’s sixth downtown housing project, which offers 14 townhouses with contemporary and urban designs near Warped Wing Brewery.
The three-story townhouses have brick interior, stained concrete and wood floors, second-story balconies and rooftop patios, with sweeping views of downtown.
The second floors have an open design with exposed ceiling trusses and kitchens with granite counter tops and high-end finishes.
Thirteen of the townhouses are sold, even though most remain under construction.
The City View homes are about 1,815 square feet, and the base price rose to about $360,000 after the project started.
In 2011, Simms’ Patterson Square town homes at East First Street and North Patterson Boulevard started at about $139,900, or about $100 per square foot. Today, his new homes, located a few blocks away, are selling almost $200 per square foot.
The Patterson Square town homes sold out in about two years. The last City View home could sell any day. City View hit the market only about seven months ago.
Rising prices reflect soaring interest in downtown living and an imbalance between supply and demand, Simms said, but they also have been pushed up by “skyrocketing” building costs related to labor and materials.
Downtown has become one of the hottest places to live because of its amenities, like RiverScape MetroPark and the Schuster Center, and its good mix of restaurants, breweries and arts and entertainment options, Simms said.
Simms said the price per square foot is not the best measure of value in the region because his town houses are maintenance free, offer unparalleled lifestyle benefits and energy-saving features.
Residents in Simms’ town home communities pay about $100 a month in homeowner association fees, which pay for maintenance, snow removal and yard care.
Simms’ success downtown has been noticed by other developers, who have new housing plans of their own.
Greg Thompson, president of the Greater Dayton Construction Group, plans to build about 27 new condos just south of downtown along Warren Street in the South Park neighborhood, near the University of Dayton and Miami Valley Hospital.
A future phase of development could include about two dozen new town houses, flats and detached single-homes on a property west of the new condos, according to conceptual site plans. The condos are expected to start at about $220,000.
People are willing to pay more to live downtown, but new housing product is commanding the highest prices, which is aided by 10- to 15-year tax abatements, said Steve Seboldt, a Realtor with Sibcy Cline and chairman of the Downtown Priority Board.
Some existing downtown condos and homes are selling for between $105 and $130 per square foot, Seboldt said.
Existing product is selling fast, he said, sometimes just days after hitting the market.
A 1,890-square-foot condo in the Cooper Lofts sold for $265,000 in June 2017. The owner received a signed offer, for the full asking price, just four days after listing it.
Downtown really could use some new housing that is less expensive because without question there are many people who would move downtown if they could afford it, Seboldt said.
“I think there’s a ton of buyers out there willing to buy something that’s under $175,000 or $150,000,” he said. “To get some people downtown, we’re going to need some more affordable prices.”
Seboldt says he doesn’t think prices will climb too much higher, even for new housing. He said prices are near the ceiling and may top out at $225 per foot.
“When you are getting things for $300,000 to $400,000, that’s a lot in this market, regardless if it’s in cool downtown or anywhere else,” he said.