Dayton, OH

DaytonDayton was one of the first cities in Ohio to see extensive subprime lending activity and high numbers of foreclosure. The city has lost half of its population since 1973, and with the closing of GM factories, lost 40,000 jobs in the 1990s. The current unemployment rate is nearly 12 percent. The city anticipates growing defaults and re-defaults on mortgage loans as unemployment increases during the economic downturn. In addition, more than 50,000 GM retirees living in the area who rely on retiree benefits could be affected by GM’s ability to weather the recession.


Vacant property has been a major issue for several years in Dayton. The overall vacancy rate is almost a staggering 25 percent, with some neighborhoods having rates pushing 40 percent. There are an estimated 6,000 vacant lots in the city and 15,000 vacant structures. To stabilize its neighborhoods, the city plans to target NSP funds on blight removal through demolition, and to use a shrinking cities strategy, by increasing green space rather than building new homes on vacant lots. Previous neighborhood strategies centered on “mothballing” properties in anticipation of future housing demand that never materialized. Dayton’s Community Development Department plans to form neighborhood groups to help maintain the city’s new green spaces.

DaytonTo develop its NSP plan, city staff partnered with a neighborhood advisory board and a city-wide community development corporation (CDC). Most of Dayton’s NSP funds will be used to demolish roughly 300 blighted structures. Some resources will be used to support neighborhood greening and historic preservation efforts. The city also plans to partner with the city-wide CDC and two other non-profit housing agencies to purchase and rehab houses 20 homes. The city has difficulty competing with private investors, who are able to buy foreclosed properties in bulk, including in sales by HUD of FHA properties, and with ready cash. Servicers managing REO property are often bound by contractual obligations to sell to the highest bidder, regardless of community needs.

Differing views/approaches among Dayton’s city departments has made a consistent planning approach a challenge. For example, while the Department of Community Development is looking for ways to make it feasible for the city to support more green space, other city departments are envisioning building housing on current park land.

In a view shared with others in weak market regions, Dayton officials feel NSP guidelines favored those markets that had higher home appreciation and where there’s a demand for housing, as well as areas that experienced high foreclosures well after Dayton did Florida and Arizona, for example, experienced foreclosures only recently after the housing market bubble burst. Dayton’s vacancy issues began as early as 2002 as high rates of subprime precipitated increased foreclosures. Requirements forcing cities to produce a certain number of low-income housing units are also hampering Dayton’s efforts. According to Dayton officials, there is no current demand for additional low-income housing. Officials had hoped to use more NSP funds to prevent vacancy through foreclosure counseling, and to use more NSP funds to develop single-family and market rate rental housing that would attract more middle-income residents and help stabilize fragile neighborhoods.

Promising approaches

DaytonThe city’s recognition that Dayton’s population will most likely never reach previous levels was pivotal in developing a density-reducing strategy for the city. Similar scenarios are playing out in several other cities especially many weak market cities in the Midwest. According to Dayton officials, the ability to use NSP I funds to demolish vacant structures and create green space is a critical tool in helping them implement the city’s “right-sizing” goals. Unfortunately, under NSP II, this activity is no longer an eligible use of funds.

More information


Valerie McIntosh
City of Dayton