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daytondevelopment

Cyburbian
Messages
33
Points
2
Hi there, glad to meet you all. My name is Jason and I am a community development student at Wright State University in Dayton, Ohio. I am glad to see that such a great forum exists!

Anyway, I plan to be a regular poster here, but I do have a question about a project I am working on.

One of the cities near Dayton has an overabundance of rental units when compared with owner occupied housing. The rental market remains high due to the proximity of Wright State University and Wright-Patterson AFB.

I am doing a research project on this issue to see what can be done. I already have a ton of data, but I really can't get a feel for the issue. Do you think that this problem is unique to this city or is it a common occurrence around the nation? The city boasts a pop. of 32,052, 14,419 housing units (13,615 of which are occupied). 7034 are owner-occupied houses, with 6581 renter-occupied units.

I would like some advice about this project, but I am not asking for someone to do it for me! I just want to go into the right direction.

Thanks for your help and I look forward to meeting you all.

dd:)
 
Messages
5,352
Points
31
Welcome to Cyburbia :)

If you haven't done so already, I suggest gathering the same data for a couple of other cities with the same or similar populations and compare them.

Exactly what is the problem? Is the city suffering from a diminshed tax base due to the lack property tax?
 

SGB

Cyburbian
Messages
3,388
Points
26
Welcome, DD!

It sounds like the city you are studying has an inherently mobile population, being host to both a college and an AFB.

With such a population, a high demand and supply of rental housing units is an expected outcome of the housing market.

Who has defined this high number of rental housing units as a problem?
 

daytondevelopment

Cyburbian
Messages
33
Points
2
Planderella, thanks for the suggestion. Apparently the city is experiencing some kind of problem with its fiscal state. When I contacted the city planner, he said that the city doesn't collect as much money as it could if the rentals were all owner occupied. A part of my project is to determine a solution to the problem, that is, find out how to attract builders to build more single family homes. I am relatively new to this, and I am not sure how I can find a solution. As for the research, I am going to compare similar cities. I know that Fairborn will have more rentals because we do have the military base and the university. People are more mobile here than they are in another city 25 miles away.

Another aspect of this problem is the slow "ghettoization" of certain neighborhoods. The city is still nice, but there is visible blight in many areas. That is a problem that needs to be worked out, but I have a pretty good idea as to how it should be handled.

Thanks for the welcome planderella and tranplanner!

dd


edited to add:

apparently it is a problem because of blight and lost revenue. The city, like most others, is in a bit of financial trouble. It really wouldn't be if more than half of the city didn't rent. They need more owner-occupied housing in order to stabilize the area. Also, as I mentioned above, there is a problem with rental units that need upkeep and simply are not receiving it. I think that this could be solved by passing zoning codes that make upkeep mandatory.
 

mike gurnee

Cyburbian
Messages
3,066
Points
31
Welcome.

Homeownership is one factor towards stable neighborhoods. We usually work with undue concentration of rental units, and try to spread them out so individual areas are not over-burdened. College/military towns will have high percentages. If your base economy is transient, not much you can do. You cannot prohibit units from being rented, and good luck bringing in more homeowners. You may want to study similar areas across the country. Some negative effects of a high rentals (and a young population) can be controlled through property maintenance and nuisance codes--if the governing body and public is willing.
 

biscuit

Cyburbian
Messages
3,904
Points
25
Welcome to the fray.

I agree with Planderella that you should compare your data against that of towns of similar size. Although, depending on the size of the university and AFB, those numbers don't seem too out of line for a town boasting two institutions with naturally transient populations. Personally, my biggest concern would be the almost 10,000 units of unoccupied housing.

Good luck. :)
 

pete-rock

Cyburbian
Messages
1,550
Points
24
Welcome, fellow Cyburbanite! You'll love this place.

Regarding your project, I'd suggest collecting data not only from similar sized cities, but other military or college towns. Jacksonville, NC comes to mind -- that's where the Camp Lejeune Marine Base is. I'm sure there are plenty of other cities that have dealt with transient population issues, and improved the quality of life for permanent residents.

Good luck!
 

Wannaplan?

Bounty Hunter
Messages
3,223
Points
29
daytondevelopment said:
Hi there, glad to meet you all. My name is Jason and I am a community development student at Wright State University in Dayton, Ohio. I am glad to see that such a great forum exists!

How are things in the Oregon District these days?

How's the Wilbur & Wright celebrations going?

Any new auto manufacturing jobs coming to the area?

How did the Dragons do this year?

Ever hear of Rehabarama?



I know too much about Dayton. More than I ever want. I'm glad you're there to make it better. Welcome to Cyburbia!!
 
Messages
3,690
Points
27
Welcome!

As to your dilemma - the City of Albany, NY is dealing with a similar issue and have instituted a program that will give homebuyers the down payment for a house in the city, based on the provision that they live in the house for a specified amount of time. maybe 5 or 7 years. You may want to contact someone with the city's planning dept.

good luck!
 

Gedunker

Moderating
Staff member
Moderator
Messages
11,551
Points
42
Welcome and Make a Wish!

My Indiana city is similar in size, population 37,000. Our home-ownership to rental proportion is 60% owner to 40% renter, although many inner-city hoods are the inverse ratio. We do not have a resident university (branch campus of Indiana U), nor any military installations. Interestingly, 17% of our rental housing stock is federally subsidized (e.g. projects . . .).

What does the community's Comp Plan or Consolidated Development Plan say (if CDBG eligible) about home-ownership programs?

Good luck and have fun with it.
 

giff57

Corn Burning Fool
Staff member
Moderator
Messages
5,452
Points
34
Hello, one thing that works in some areas to get these properties valued higher is to offer a tax abatement for improvements. Base the abatement on a real increase in taxable valuation and you lose no money. Landlords get a tax break for a few years (3-5), and the savings pay for the improvments. Couple that with the Maintenance Code and it might fly better politically.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
My city has a similar issue. We are roughly 65% multi-family and 35% single-family, due to a large university in a small community. It costs about $65-75,000 to construct a new unit of rental housing, and $130,000 to construct a decent owner-occupied home. This, of course, has an impact on the tax base. A greater concern is that a large segment of the population is transient, even if some may remain residents for 4-5 years until they graduate. They never really become a part of the community and contribute to it.

Until we recently managed to kick of a building boom of new owner-occupied housing, we had to deal with a couple of issues in trying to increase ownership. The first is that people did not want to live in otherwise attractive neighborhoods because of the proximity of large concentrations of (student) rental housing. Those people do cause problems that the typical owner does not want to deal with, such as loud drinking parties, vandalism, etc. The second issue is that with a demand for rental housing, the entry housing on the market was being purchased by people converting the units to rentals. This actually inflated the price, so that the same house might cost 10-20% less in a neighboring community.

Our approach was two-pronged. First, we encouraged people to construct new rental units. This may seem counter-intuitive, but it saturated the market. Older, run-down complexes are not renting as well and are feeling the pressure to remodel. There is a lessened demand for converting single-family homes into rentals. You can see this when some people try to sell. They have advertised the inflated prices that used to sell to landlords, and have not sold in two years on the market. The price will continue to drop until it is in line with other communities, and these will likely go to owner-occupied households. Several units have been converted back from rentals already.

The other initiative was to encourage new housing construction. We have done that on greenfield, infill, and brownfield sites. The product ranges from condos between $115,000 and $225,000, and single-family homes from $125,000 to $300,000. We even have a senior community in the early planning stages.

While we don't ever expect to resemble the typical community, we can expect, over the long run, to have a fairly even mix of renters and owners.
 

el Guapo

Capitalist
Messages
5,995
Points
31
Welcome - I once graced your fair city with my presence for a night of passion. I wonder if any little Guaps are there now?

kidding


Welcome/
 

JNA

Cyburbian Plus
Messages
25,987
Points
63
Greeting from one of the MANY Midwesterners
and neighboring state to the west.

post early, post often.
 

JNL

Cyburbian
Messages
2,449
Points
25
Welcome. From a renter. I live in a new apartment complex.

It is hard to tell here which houses are rented and which are owned. My street has a lot of older houses, and a mixture of students renting, professionals renting, and owner-occupied.

I guess rental properties here are of a high standard. There's no stigma attached to being a renter.
 

H

Cyburbian
Messages
2,850
Points
24
Welcome.

Sounds normal for a college/military area. Most students can’t afford to buy, nor do they want that responsibility. Why is it a problem? Renting can be a benefit sometimes, especially when you are transitory.

I suggest you do a survey and find out if the renters would prefer to be owners? If they do, then there is a problem. If they don’t, then problem solved. Renters must live somewhere. If they do want to buy then mortgage education classes could be held by the city, there are many loan options these days that enable most people to purchase if they desire.

Plus on the city comparisons, I would suggest that they are other similar college/military towns. A standard non-transitory city would be an orange to your apple.

I don’t understand how the city would collect more $ if they were owner occupied? (unless they access owner occupied houses higher than rentals, which seems odd). The landlords are still paying taxes, right?

well, let us know what you do and good luck.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
Huston said:
I don’t understand how the city would collect more $ if they were owner occupied?

Per unit, a multi-family building (rental) is far cheaper to build (and hence has less value per unit) than a single-family home. To use an example from my community, a recently constructed 8-unit building is assessed at $750,000, which is about the same as five single-family homes just built across the street. While some costs are proportionately less (i.e., the multi-family unit has about the same frontage as the five units) the majority of costs are more rightly determined by household. If costs like police and fire costs are comparable to those in other communities, a lower valuation due to a higher percentage of multi-family units results in a higher tax rate.

Let me try another example. City A and City B each have 10,000 people and 5000 housing units. City A is 60% renter and 40% owner. City B is 40% rental and 60% owner. Owned homes are assessed at an average of $150,000 while rental units are assessed at an average of $75,000.Each city is required to have a twenty-officer police department at an annual cost of $2,000,000. Community A has an assessed value of $52.5 million, so the tax rate is 0.00381. City B is valued at $60 million and has a tax rate of .00333. The homeowner in City A is paying $571 for the same service the homeowner in City B gets for $499.
 

Otis

Cyburbian
Messages
5,169
Points
29
Welcome.

Everyone seems to be assuming that rentals are apartments and owner-occupieds are houses. Is that the case?

In any event, military and students aren't able to afford single family dwellings as much as some other sectors in the economy can. Building more SFDs doesn't mean they will be occupied at all if people can't afford them. Affordable housing is a real issue for communities such as yours.

The fascist solution would be to downzone to limit the amount of land available for apartments. And if I remember Euclid correctly, zoning was started for exclusionary reasons anyway,.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
Rich Townsend said:
Everyone seems to be assuming that rentals are apartments and owner-occupieds are houses. Is that the case?

I can only speak to my community, where no more than 10-20% of the rental units are houses, and many of those are divided into two or more units. Even the single-family rental houses are at the cheap end of the scale, though. I doubt you would find many valued at more than $120,000.
 

JNL

Cyburbian
Messages
2,449
Points
25
The area I recently moved from has lots of wonderful late 19th century houses that have been renovated and are rented out. I was living in a house worth $500,000 to $600,000, (quick trip to currency converter: = US 300-360k, CAD 400-480k) but only paying NZD130 (US78, CAD 103) per week in rent (for my room, I shared with others).

Just offering this as an example of high quality rental accommodation, which is pretty common here.
 

H

Cyburbian
Messages
2,850
Points
24
Cardinal said:
Per unit....-snip-...

I understand and agree with what you are saying here, but the structures are already built (right?). So if house “A” is on lot “A” then wouldn’t (shouldn’t) it be worth the same regardless of who live inside? And same with unit B, C, D & E, however you arrange them. (we are talking about an already built environment or have I missed something?).
And with new construction as well, if you have limited space and build a new multi-family building, should it matter in taxes if it is renter or owner occupied? So maybe the real issue here is single family vs. multifamily, not owner vs. renter.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
Huston said:
I understand and agree with what you are saying here, but the structures are already built (right?). So if house “A” is on lot “A” then wouldn’t (shouldn’t) it be worth the same regardless of who live inside? And same with unit B, C, D & E, however you arrange them. (we are talking about an already built environment or have I missed something?).
And with new construction as well, if you have limited space and build a new multi-family building, should it matter in taxes if it is renter or owner occupied? So maybe the real issue here is single family vs. multifamily, not owner vs. renter.

Good points. In theory, the same house should be worth the same whether it is renter or owner occupied. The situation that often develops (again, referring to my community) is that the landlords do not invest in the building to the same degree as would an owner occupant. For example, we have a large number of white homes because white vinyl siding costs less than siding of color. You can often spot the rentals by the poor condition of the lawn and the lack of landscaping. These and other things all contribute to degrading the value of the home over time, even when it is maintained structurally sound.

With rental versus owner occupied multifamily housing, the costs are certainly different. Take one of the nicer 8-unit rental buildings in the city, completed a couple years ago. It is assessed at about $800,000, or $80,000 per unit. Across the street, a condo in one of several duplexes under construction sells for $125,000. In another part of the city, a newly completed 4-unit building had units selling at an average of $210,000 per unit, more than the typical detached home in this city. All have attached garages and roughly the same level of exterior finish and landscaping, so why the difference? The reasons are simple. The owner occupied units are larger and they have a much higher level of interior detail.
 

H

Cyburbian
Messages
2,850
Points
24
Cardinal said:
Good points. In theory, the same house should be worth the same whether it is renter or owner occupied. The situation that often develops (again, referring to my community) is that the landlords do not invest in the building to the same degree as would an owner occupant. For example, we have a large number of white homes because white vinyl siding costs less than siding of color. You can often spot the rentals by the poor condition of the lawn and the lack of landscaping. These and other things all contribute to degrading the value of the home over time, even when it is maintained structurally sound.

With rental versus owner occupied multifamily housing, the costs are certainly different. Take one of the nicer 8-unit rental buildings in the city, completed a couple years ago. It is assessed at about $800,000, or $80,000 per unit. Across the street, a condo in one of several duplexes under construction sells for $125,000. In another part of the city, a newly completed 4-unit building had units selling at an average of $210,000 per unit, more than the typical detached home in this city. All have attached garages and roughly the same level of exterior finish and landscaping, so why the difference? The reasons are simple. The owner occupied units are larger and they have a much higher level of interior detail.

Okay, I’ll buy into the upkeep argument to an extent. It will depend on the “rent level”. I can show you some small “high end” multi-family rental units in buildings/communities here in south Florida that are much nicer than some close by “low-end” owner occupied single family house neighborhoods here.

Plus, in the case of the study town, if the current rentals are changed to owned units in the city, they will be the same size. I currently live in a building that was once rental and turned condo. They are the same size they were before.

There are many factors here (of course). I guess my point is there in a need for rentals. Not every city can be all owner occupied. Renters are unfairly discriminated against on many levels.

There are many reasons to rent: Transitory being the first. If you are temporarily in a city it is best to rent. If you buy a house and are not in it for 3 years (on average), you will most likely lose money after you pay real estate and mortgage fees and commissions. Plus you wont get your money out of all that time you spent painting, raking leaves, fixing the sink, etc…

There is a need for both is what I am saying.

Renting does not need to be seen as an automatic problem, is all.
 

daytondevelopment

Cyburbian
Messages
33
Points
2
Wow. I asked for help and advice- I certainly got it! I want to thank you all for the help and guidance (and many welcomes) you offered. I look forward to posting more on this site. You have all been more than kind!

Thanks,

dd
 
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