Miller-Valentine Group had a strong year for multifamily residential construction in 2012, but 2013 looks even stronger.
Dave Liette, president of Miller Valentine Residential Development, said the 10 tax credit housing projects the company did in 2012 marked one of the best years it had ever had. But in 2013, the company is looking to return to market rate housing projects for the first time since the housing crisis, showing a renewed confidence in the residential market and in local job creation.
Liette sat down with me to discuss the trends that are driving development of multifamily residential projects.
Q: How strong is multifamily construction right now?
A: On the multifamily side, occupancies are above 95 percent in the city. It was just three or four years ago that average occupancies were below 90 percent. Clearly the market has gotten stronger in Dayton. That’s driven by activity aroundÂ Wright-Patterson Air Force Base, including Wright Field, which has enjoyed strong occupancy. What weâ€™re experience in Dayton is whatâ€™s happening across the country. And when occupancies grow above 95 percent, you’ll see stronger rent growth. Rents are growing 2 to 3 percent in Dayton.
Q: Where does Miller-Valentine see opportunities for new development?
A: We’re looking at a couple potential opportunities in the Dayton market. If you look at potential household growths in the whole Dayton market, it will tell you this market could absorb 250 to 300 units per year. It looks like we could support more product. The key is getting it in the right location. We look for employment drivers. The volatility at Wright-Patt makes me nervous to look there, but Austin and downtown, we’re looking there. And we will always look for opportunities with tax credit housing. We haven’t started a new market rate deal since 2009. We’re focused right now on Indianapolis and perhaps Cincinnati and Dayton.
Q: What sector is the most active for multifamily?
A: The senior demographic is staggering. Over 10,000 people a day reach the age of 65. We must find a way to capitalize on this growing market. It’s not just housing needs, it’s all the services for seniors, and a lot of them are active. The traditional senior housing is going away.
The downturn put a quick stop to market rate senior housing across the country because seniors chose to stay in homes rather than move to senior apartments because their home values went down. Everything is on hold until the single-family market comes back. We’re at the stage to figure out our next play with senior housing. I have a passion for seniors.
Q: What other trends are you seeing with multifamily construction?
A: A growing piece of the market for market rate apartments is single women. There are 4 million more women with college degrees than men. And currently there are 3.5 million more women in the university system than men. It drives the apartment market to say, “What are single professional women looking for in an apartment?” That’s a big growing market for women. The other thing changing is people are getting married and starting families later. Married couples with children were 45 percent of the population in 1955. Now it’s 20 percent. That’s the typical homeowner. So couple the women, the fact that people are getting married later, and the baby boomers children are 19 to 25 years old, with the seniors who would like to rent if they can sell their houses, it bodes very positive for apartments in the future. We’re just trying to figure out where our niche is going to be.
From the Dayton Business Journal