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HOUSINGCOMMITTEE

DRAFTRECOMMENDATIONS

1. IntroductionHousingeffortswithintheCityofDaytonhavevariedthroughouttheyearsfromsmallprojectswith

individualdeveloperstolargescale,multipartnerneighborhoodoverhauls.Althoughnotwoprojects

werethesame,eachhasservedasavaluablelessonindeterminingbestpractices.

Today,withthehousingmarketinaslump,theCityexperiencingbudgetchallengesandbanksless

inclinedtoofferfinancing,ithasbecomeimperativetostartthinkingaboutdowntownhousinginanewway.Thekeytofuturedevelopmentisaproactiveapproachtogrowthehousingmarket.

Since1990,approximately600unitshavebeenbuiltorrenovatedintheCentralBusinessDistrict(CBD)

and100unitswithinthesurroundingneighborhoods.Ifthedesireistoincreasethenumberofhousing

unitsandresidentialimpactwithintheCBDandneighborhoods,theremustbeanewapproachtothe

economicviabilityofhousingdevelopment.

Inthepast,mostdowntownprojectsweresimilarintheirfinancialstructure.Therewasapercentageof

equityofferedbythedeveloper,apercentageofgapfinancingbytheCityorCityWideDevelopment,

andtherestwasmadeupinbankfinancing.Thechallengeinthisstructureisthatmoreoftenthannot

thecost

toconstruct

these

units

far

outweighs

the

price

for

which

the

units

can

be

sold.

InJuly2008,theCityofDaytoncommissionedaDowntownHousingAssessmentStudy.Thepurpose,as

statedbythestudy,wastoreviewareagrowthtrendsandresidentdemographiccharacteristics,current

housingmarketconditionsformultifamilyforsaleandrentalhousingtypes,andpendinghousing

developmentstoquantifythenumberofmultifamilyhousingunitsthatcouldbesupportedin

downtownDaytonduringthenextfewyears,20082012.

Thereportstatedthatthemostimportantingredientforathrivingdowntownispeople,specifically,

pedestriantraffic.Thethreemajorsourcesofdowntownuserscurrentlyaredailyworkers,permanent

residents,andshorttermvisitors.Thereportwentontosaythatthewaytoluremorepeople

downtown

is

to

have

a

strong

job

base,

increase

housing,

and

offer

unique

attractions.

Thestudyofferedabreakdownofrentalhousingversustheforsaleoptionforthedowntownmarket.

Rental:

Itwasnotedthatin2000,therewere3,012unitsofrentalhousinginGreaterDowntownand,by2007,

thatnumberhadonlyincreasedby11,to3,023.Calculationsshowthatthegreatestbaseofsupportfor

rentalunitsdowntownismarketrateunitsandthatdowntowncouldcurrentlyabsorb55moreunits

peryear.Thereissomeroomfortaxcreditunits,butthestudypredictsthatitwilltakeafewyearsto

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manifestintosufficientdemandforadditionaldowntowndevelopmentwithoutattractingrentersfrom

beyondthedowntownarea.

Youngandmidageprofessionalworkersarethebiggestmarketandoftenprefertorenttheirhousing

initially,especiallyiftheyarenewtothecommunity.Incomesforthisgrouparelikelytobe$40,000

annuallyandhigher.Taking30%oftheirincomeforhousingcostwouldgenerateanaffordablerentof

upto$1,000monthly,includingutilities.

ForSale:

Thereisaslightlysmallermarketforforsaleunits,withthepotentialtoabsorbupto28newcondo

unitsyearly.Itisnotable,however,thatthereisalackofproductoptions,especiallymoderatelypriced

alternatives,whichhasimpacteddowntownsabilitytogeneratesales.Forthisreason,thecurrent

primarytargetmarketsforupperendcondosarebuyersages4574whoarepurchasingaretirement

residence.

Conclusions:

Themostimportantfindingsinthemarkethousingstudywerethosearticulatedintheconclusionsof

thereport.Thesearetheitemsthatneedtobeassessedtoimprovethesuccessfulnessofdowntown

housing.

o Thedevelopmentofacriticalmassofmarketratehousingdowntownislikelytorequireapublic/privatepartnershiptoachieveabroaderrangeofhousingtypesatvaryingprice

points.

o Agreatervarietyofhousing,bothmiddleincomeandupperincome,willenhancethevitalityofdowntownseveningentertainmentenvironmentandlikelyspurincreasedretail

development.

o TheexpandingstudentbaseintheDaytonareapresentsopportunitiestodevelophousingspecificallytomeettheneedsofthismarketsegment.

o Lackofavailablesitesfornewhousingdevelopmentisachallengetomeetingeconomiesofscaleinprovidingmoderatelypricedhousingunits.

o LocalorganizationsandtheCityshouldworkincooperationtoidentifypotentialfundingalternativestotraditionalfederalandstateprograms.

o ThesuccessfulimplementationofcoreGreaterDowntownDaytonPlanrecommendationsiscriticaltodramaticallychangingthenumberofdowntownresidents.

2. VisionImprove

and

expand

neighborhoods

in

Greater

Downtown

by

creating

vibrant,

socio

economically

diverseresidentialareasthatoffervariedpricepoints,awiderangeofproductchoicesandthe

typesofamenitiesthatresidentsintodaysmarketexpect.

3. CoreObjectiveso Buildorrenovate5,000housingunitsinGreaterDowntownduringthenext10years(2010

2020).

Thegoalistocreate2,000unitsby2015tohelpjumpstartthemarketfortheadditional3,000inthefollowingfiveyears.

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o Improveamenities suchasagrocerystore/foodcoopandotherrelatedservices intheCBDthatwillservedowntownandinnerringneighborhoodsandmakeGreaterDowntowna

morecompetitiveregionalresidentialmarket.

o Createabalancebetweenrentalandforpurchaseresidentialunits.o Offeroptionstoresidents,inboththetypeofhousingandthepricepointsforrentalunits

andfor

purchase

units,

tomeet

the

needs

ofallincome

levels.

4. RecommendationsandActionStepsRankeachpotentialhousingsiteusingcriteriadevelopedbytheGreaterDowntownPlan

HousingCommitteetobetterunderstandwhichprojectsaremorelikelytohavethehighest

successratebasedonpredeterminedqualifiers.

Giventhediversenatureanduniqueopportunitieswitheachoftheproposedhousingproject

options,specificcriteriaweredevelopedtohelpevaluateeachlocation.Foreachsite,the

individualplanforredevelopment,thespecificlocationofthatdevelopment,andthebroader

implicationsofdevelopmentmustbefurtherreducedtomeasuresthatmaybebetter

quantitativelyassessed.Anobviousbenchmarkisthenumberofunitsinvolvedineachproposal,aswellasthedevelopmentcostperunit,asmeasuredbythepercentofthesubsidyneededto

completetheproject.Thetimeneededtocompleteanysuchdevelopmentalsorequires

evaluation.Becauseoftheinherenturbannatureofthesepotentialprojects,location

considerationsmayincorporatepotentialcontaminationandnecessarycleanup,costofland

assemblyperacre,andavailableparking.Otherconsiderationsmustincludesiteownership,

whetherbytheCityofDayton/CityWideDevelopment/MontgomeryCounty,awillingseller,or

anoutsideparty,andtheeligibilityofthedevelopmentfornewmarket,historicoraffordable

housingtaxcredits.Finally,broaderlocationbasedconsiderationsshouldbelookedat,suchas

theneighborhoodsdesirabilityandmarketability,itsclosenesstoamenities,andtheimpactas

acatalystanynewdevelopmentmayhave.

Thefollowingistheevaluationusedbythecommitteetohelprankhousingdevelopment

options:

CriteriaDefinitions:

1. ScaleofDevelopment:Thenumberofunits2. Environmental:Levelofcontaminationpairedwiththetimeandcosttocleanthesite3. LowCostofLandAssembly:Costperacreandavailability4. SiteControl:thesiteisownedbytheCityofDayton/CityWideDevelopment/Montgomery

County;currentlyforsale;timeitwouldtaketoacquireland(numberofowners)

5. Marketability:Location,desirability;closetoamenitiesandassets;marketdriven;catalyticimpact

6. TaxCreditEligibility:NewMarket,Historic,AffordableHousing7. PerUnitDevelopmentCost:Percentofsubsidyneededtocompletetheproject8. Timing:Lengthoftimeitwouldtakeaprojecttodevelopfromstarttofinish9. Parking:Availabilityadjacenttohousingprojectsite

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RawScore:

Rawscoresranked14,with1beingthelowestand4beingthehighest

ScaleofDevelopment:>100units(4pts),>50(3pts),>25(2pts),

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Foranyneighborhoodredevelopmentproject,theGenesis/Phoenixmodelofacquisitionshould

beconsidered.

o Beginspeculativepredevelopmentworkonhousingsitesthatdemonstratethemostpotentialforsuccess.

Upondeterminingthesitesandneighborhoodsthatseemtohavethemostpromise,pre

developmentworkshouldbeginimmediately.Thiswouldincludeenvironmentalreviews,

visioningillustrations,

and

cost

estimates.

This

information

would

be

used

tofacilitate

redevelopmentofthesitesinquestion.

o Createalistofleadinglocal,regional,andnationaldeveloperswhohaveexperienceinurbanhousingprojects.

Developmentwithinthepreviouslybuiltenvironmentfoundinallurbancoresoffersnotonly

uniquechallenges,butalsoaddedcosts.Forthisreason,itisimportanttocreatealistof

prospectivelocal,regionalandnationaldeveloperswhohaveexperiencewithbuildinginurban

settings.Itwouldalsobehelpfultodosomeofthegeneralpredevelopmentworkofhigh

priorityprojectsandsendoutaRequestforProposalstothoseselecteddevelopers.

o BuildupontheDowntownDaytonPartnershipseffortsthroughtheStrategicReuseProject focusingonbuildingsthatrankhighbasedontheSiteEvaluationCriteria andworktodevelop

costestimatesanddevelopmentstrategiestoturnthoseprojectsintoareality.

SignificantworkwascompletedbytheStrategicReuseProject,avisioningprojectspearheaded

bytheDowntownDaytonPartnershipinconjunctionwithlocalarchitectswhograciously

volunteeredtheirtimeandskilltocreateinnovativedrawingsforunderutilizedbuildingsinthe

downtowncore.Thiseffortisnotcompletewithoutarealisticcostassessmentofthemost

promisingstructures.Itshouldalsoexplorehowtobestobtaincontrolfordevelopment

purposes,includingpurchaseorpartneringwiththecurrentowner.

o IncorporatetheCityWideDevelopmentNeighborhoodDevelopmentStrategicPlanningGroupsrecommendationsforMidPark,anareabetweentheUniversityofDaytonandMiami

ValleyHospital.Thisneighborhoodisacriticalpieceofthepuzzlethatwillserveasanimproved

gatewaywhilecreatingalivabledistrictthatwillhelpfillDaytonsmarketgapsinboththe

housingandoffice/retailmarket.ThelocationofMidParknotonlyservesasavisualgateway,

butitsproximitytomanysuccessfulprojectsmakesitapromisinglocationforfuture

development.

o Developstrategiestobringagrocerystore/foodcooptotheGreaterDowntownarea.ExplorethepotentialoftransitioningtheGreyhoundbusstationtoagrocerystorewithrelatedservices

likedrycleaners,deliandotherrelatedservicesneededbyresidents.

5. Recommendedand/orPotentialFundingSourcesThepredevelopmentfundisforthefollowingtypesofitems:

Visioningillustrations

Appraisals

Environmentalreviews

Titlesearches

Costestimates

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http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151http://www.downtowndayton.org/index.php?option=com_content&task=view&id=151

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Thefundmaynotrecoupallitsexpenditures.Consequently,itmayneed

tobesourcedwithpublicdollars.Thefundshouldbecapitalizedwith

$250,000.

TheHousingEquityFund(HEF)willhelpclosethefundinggapbetweendeveloperequityand

bankfinancing.TheHEFwillbestructuredtorecoverallprincipalandgeneratea15%returnon

investment.TheHEFsfundinggoalisrecommendedtobe$10million.

6. RolesandResponsibilities/ImplementationTeamsWhileitisstilltooearlytobegindiscussingrolesandresponsibilitiesforproposedprojects,there

aremanysuccessfulexamplesofprojectdevelopmentinDaytonthatcanserveasexamples.

Forlargescaleneighborhoodredevelopment,theGenesisandPhoenixProjectsofferagood

comparisonfortheroadahead.Thesetwoprojectsweresuccessfullargelybecauseofabalanced

governingstructurethatguidedtheprojectsfromtheirinception.Asimilargoverningstructureis

recommendedforfutureneighborhooddevelopmentprojects,suchasMidPark.

Forsmallerprojectsandthosecontainedwithinasinglebuilding,therolesandresponsibilitiesmay

beverydifferent.Itwilldependonwhothepartnersareineachspecificprojectandtheirlevelofinvolvement.

7. SupplementalMaterials: DowntownDaytonPartnership(DDP)StrategicReuseProject CityWideDevelopmentCorporationMidParkDevelopmentRecommendations DDParchitectrenderings

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