New apartment project shows enduring demand in Dayton

A roughly $8 million apartment project in the South Park neighborhood suggests confidence in the urban rental market has not faded, despite ongoing economic fallout and uncertainty from the coronavirus pandemic.

A second phase of the Flats at South Park development is moving forward after receiving city approval that is expected to bring 51 new market-rate apartments to the 600 block of Warren Street.

Many multifamily construction projects across the nation hit pause during the COVID-19 crisis. Permits for new privately owned residential buildings with five or more units were down more than 22% last month, compared to September 2019, according to the U.S. Census Bureau.

But market rate housing remains extremely popular in and around downtown Dayton, and hundreds of new units are expected to come online in the next couple of years.

“Demand for downtown housing is still very strong ― even during the pandemic,” said Scott Murphy, vice president of economic development with the Downtown Dayton Partnership.

Last week, the Dayton City Commission unanimously approved a zoning change for nearly 1.3 acres of vacant property on Warren Street. The Flats at South Park II LLC, the property owner, received authorization to revise its plans to create a three-story apartment building instead of a condo building of the same size

A 27-unit condo project, which was approved a few years ago, was scrapped because the developer decided it was too risky if they did not sell quickly enough, said Bill Hibner, director of construction services for the owner and developer.

“Although there is a demand (for condos), for that type of project, the whole building would have to be built, and all the units would have to come online at one time,” he said. “We felt the absorption rate of that was too long.”

The new apartment building is very similar in design to the approved condo building, with a few tweaks to the façade, said Susan Vincent, city of Dayton planner.

Greg Thompson is the principal of Flats at South Park II LLC. He is the president and founder of Oberer Thompson, and owner and president of Greater Dayton Construction Group.

The new apartments are the second phase of the Flats at South Park. The first phase was a 43-unit, four-story building on the 400 and 500 block of Warren Street.

In addition to apartments, the first building has commercial space on the ground floor, including a UPS Store, a Cassano’s Pizza and a Biggby Coffee. But years after opening, some of the building’s commercial space remains empty.

The developer can now apply for permits and work on the second phase should get underway in December, Hibner said. He expects construction to last about 11 months.

Some people in the neighborhood may have preferred condos, but most seemed OK with the switch to apartments, said Mark Keller, president of Historic South Park Inc.

The initial residential phase has done well, though some commercial space remains unoccupied, he said. South Park continues to be a strong and in-demand area, Keller said, and most of its housing sells or rents quickly.

South Park, as well as the Flats at South Park development, are just south of downtown, a short walk or bike, scooter or free shuttle ride from the heart of the business district.

Downtown housing has been hot for years, and residential occupancy is about 92%, even though its inventory has surged, according to the Downtown Dayton Partnership.

Downtown Dayton has seen nearly 100 new apartments in 2020 after adding more than 100 units last year, the partnership said.

Downtown has more than 300 new apartments in the pipeline that could come online in 2021 and 2022, including at the Dayton Arcade, The 503 building near the Oregon District and the Monument near RiverScape, the group said.

But inner ring neighborhoods near downtown also are seeing new apartment investments.

Just south of the South Park neighborhood sits the former Patterson-Kennedy school site along Wyoming Street.

Developer RE NVC Dayton II LLC plans to construct about 264 new apartment units on the site over two phases.

The project, called The Flight, is expected to go before the Dayton Plan Board again later this year. The developer is seeking approval of a general development plan.

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