Ohio State Intel project sparks housing fears in tight market

COLUMBUS, Ohio (AP) — Intel’s announcement of a $20 billion manufacturing operation earlier this year Bringing thousands of jobs to rural Ohio was hailed as an economic boon.

But behind this enthusiasm there was an actual question.

“Where do we put everyone?” asked Melissa Humbert-Washington, vice president of programs and services at Homes for Families, which helps low-wage workers find housing in an area already suffering from severe housing shortages.

Intel says the first two computer chip factories will employ 3,000 people when they start operating in 2025. The project is also expected to employ 7,000 construction workers.. None of this includes an expected boom in the service sector, as well as hundreds of additional jobs as Intel suppliers relocate.

Such housing problems continue across the country as companies increasingly come under fire for not considering the shelter needs of their new hires or the impact of major events on already tight housing markets.

Experts agree that years of construction that coincided with the Great Recession of 2008 led to a widespread housing shortage. According to Rob Dietz, chief economist for the National Association of Home Builders, the nation is about 1 million homes short. The National Housing Association estimates a rental shortage of about 600,000 units.

“We’ve underbuilt housing by millions of homes over the past 15 years,” says Dennis Shea, executive director of the J. Ronald Terwilliger Center for Housing Policy. “So when a big company comes into a supply-constrained community, the demand they’re going to impose … will affect home prices and rents because there’s more demand than supply.”

For a large company’s impact on housing, consider Intel’s own operations in Chandler, Arizona, which grew from a small farming town of about 30,000 when the company built its first factory in 1980 to a high-tech metropolis of 220,000 today. This was accompanied by a huge housing boom, and today Chandler is running out of developable land, with about 95% of the area built up with residential, office, industrial and retail projects, according to the Greater Phoenix Economic Council.

Housing is also more expensive in Chandler, with a median home sales price of $525,000 compared to $455,000 in greater Phoenix and a median rent of $2,027 compared to $1,950 in Phoenix.

Mark Stapp, director of Arizona State University’s Center for Real Estate Theory and Practice, said rural Ohio lacks local workers to build or staff a large project. There is neither housing nor infrastructure to accommodate thousands of new arrivals, driving up housing prices and possibly forcing existing residents out.

“This is economic development. It will hire people. But you’ll probably have to bring a lot of people into the area,” he said. And “these jobs require housing.”

“If you don’t recognize that and you don’t plan the infrastructure, the land use policy, and you don’t manage that growth, it can be a big problem. A big opportunity turns into a big problem.”

In central Ohio, the Intel site rises on hundreds of acres of rural land once occupied by farms and modest homes, where large business parks are also growing near major highways. The region averaged 8,200 building permits a year for both single-family and multi-unit buildings, according to the Central Ohio Building Industry Association, which estimates jobs and population growth before the Intel project.

“We’re not building enough of anything,” said Jon Melchi, the group’s chief executive. Central Ohio, which has about 2.4 million residents today, will grow to at least 3 million by 2050, the group said.

Central Ohio’s shortage includes the “missing middle” of workforce housing, or homes up to $250,000, said Tre’ Giller, CEO and president of Metro Development, one of Ohio’s largest housing developers. A recent Zillow search showed a total of 570 listings for homes in the area for $250,000 or less.

Housing pressures are particularly strong for low-wage workers. Central Ohio already has about 71,000 families considered “severely rent burdened” — families spending more than half of their income on housing, the Ohio Coalition on Homelessness and Housing said. The area has only 34 affordable housing units for every 100 low-rent households, he said.

The problem is more severe in Licking County, home to future Intel plants, where more than one in five tenants are in serious rent arrears.

Affordable housing is critical to low-wage workers who keep the economy running, from preschool teachers to health care workers, said Amy Riegel, executive director of COHIO. But housing also needs to be viewed on a spectrum: If there aren’t enough high-end properties to buy, buyers will lock up rentals, which locks out workers with limited means.

“Housing is definitely an ecosystem,” Riegel said. “If you add housing at one end and don’t take care of the other end, it has an effect and a ripple effect on the whole system.”

In a Nov. 8 vote, Columbus voters approved a $200 million bond issue aimed at boosting the city’s affordable housing stock for homeowners making less than $50,000 annually. “We just don’t have enough places for people to live,” said Mayor Andrew Ginther when he announced the issue in July.

Janna Sharrett is grateful for her apartment in an affordable apartment complex in suburban Columbus as the region prepares for the arrival of Intel and its impact on real estate. A 60-year-old customer service representative works from home and makes just $14.94 an hour. The rent for the one-bedroom apartment she shares with her dog Bella and cat Daisy is $695.

The $6.5 million, 28-story building where Sharrett lives was designed by Homeport, a Columbus-based nonprofit that works to expand affordable housing. Sharrett moved out two years ago to be free of a $1,000 rent payment, and today she doesn’t know what she’d do without it.

As the region grows through projects like Intel, he is concerned about the needs of people like him.

“The rent is exorbitant. House prices are too high. And my income is not exorbitant,” Sharrett said.

A growing number of companies across the country are responding to housing challenges with ambitious plans for thousands of new homes, even though the efforts fall far short of actual needs.

In 2021, Amazon launched a $2 billion Housing Equity Fund to create More than 8,000 affordable homes in three regions where it operates: Washington State’s Puget Sound; Arlington, Virginia and Nashville, Tennessee.

In 2019, Apple said it would allocate $2.5 billion to alleviate California’s housing crisis, one of several initiatives by the high-tech company. This month, Walt Disney World selected a developer to build affordable housing on 80 acres of land Orange County, Florida.

Intel also looks forward to working with Ohio community leaders to prepare for increased housing demand over the next few years, Intel spokeswoman Linda Qian said, without elaborating.

Experts say it is in Intel’s interest to contribute to the region’s housing shortage. Employers in greater Columbus already blame high employee turnover and long commutes for lost productivity, according to a report by the Affordable Housing Alliance of Central Ohio.

“Without the housing product, it could easily overwhelm the labor needs of Intel and others,” said Jamie Green, a planning consultant based in Columbus.

Leah Evans, president and CEO of Homeport, the developer of Sharrett’s affordable housing complex, highlights the challenges ahead as the Intel project progresses.

“It made it clear that for every job you create, you have a commute and a housing unit,” Evans said. “You have to think about all this.”


Michael Casey in Boston contributed to this report.

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