Ohio’s Intel project triggers housing fears in tight market

Ohio’s Intel project triggers housing fears in tight market

COLUMBUS, Ohio — Intel’s announcement earlier this year of a $20 billion manufacturing operation bringing thousands of jobs to rural Ohio was greeted as an economic boon. But there was a pressing question behind all the excitement.

“Where do we put everybody?” asked Melissa Humbert Washington, vice president of programs & services at Homes for Families. Homes for Families helps low-wage workers find housing for their families in a region that is already experiencing a shortage.

Intel says its initial two computer chip factories will employ 3,000 people when the operation is up and running in 2025. The project is also expected to employ 7,000 construction workers. And none of that includes the hundreds of additional jobs as Intel suppliers move in, along with the expected boom in the service sector.

These housing problems are being faced across the country, as companies are increasingly being criticized for failing to consider the shelter requirements of their new employees and the impact that big developments will have upon already tight housing markets.

Experts agree with the fact that housing shortages have been a result of years of underbuilding since the Great Recession of 2008. Rob Dietz (senior economist at the National Association of Home Builders) estimates that the country has a shortage of approximately 1 million homes. The National Apartment Association estimates a rental shortage of about 600,000 units.

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

For a big company’s impact on housing, look no farther than Intel’s own operations in Chandler, Arizona, which grew from a small agricultural city of about 30,000 in 1980 when the company built its first factory to a high-tech metropolis of 220,000 today. That was accompanied by tremendous housing growth, and today Chandler is running out of developable land, with nearly 95% of the area built out 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 sale price of $525,000 compared to $455,000 in greater Phoenix, and median rents of $2,027 compared to $1,950 in Phoenix. Mark Stapp, director at Arizona State University’s Center for Real Estate Theory and Practice, stated that rural areas in Ohio face a challenge because they don’t have the local workers to build or staff large projects. The infrastructure and housing are not available to accommodate the thousands of new residents, which could lead to increased housing costs and even the displacement of existing residents.

“It is economic development. It will employ people. He said that you will likely need to bring many people into the area. The great opportunity can quickly turn into a problem. The great opportunity turns into a big problem.”

In central Ohio, the Intel site is rising on hundreds of acres of rural land once occupied by farm fields and modest homes where large business parks have also sprung up near major thoroughfares. The region has averaged about 8,200 building permits per year for both single-family and multi-unit buildings, even as job and population growth estimates predating the Intel project called for more than twice that, according to the Building Industry Association of Central Ohio.

“We aren’t building enough of anything,” said Jon Melchi, the executive director of the group. The group stated that the population of Central Ohio, which currently has 2.4 million people, will increase to at least 3,000,000 by 2050,.

The central Ohio 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 apartment developers. A recent Zillow search showed only about 570 listings for homes $250,000 or less in the area. Low-wage workers are particularly under pressure. Central Ohio already has about 71,000 households considered “severely rent burdened” — families spending more than half their income on housing, said the Coalition on Homelessness and Housing in Ohio. The region has only 34 affordable units available for every 100 low-rent households, it said. The problem is even worse in Licking County where nearly one-fifth of renters are considered rent-strapped.

Affordable housing is crucial for the low-wage workers who keep the economy running, from pre-school teachers to medical assistants, said COHIO executive director Amy Riegel. Housing must be seen in a broad context. Without enough properties of higher quality to buy, buyers will take over rentals, which then makes it difficult for workers with limited resources to afford housing.

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

On the Nov. 8 ballot, Columbus voters approved a $200 million bond issue aimed at increasing the city’s affordable housing stock for homeowners earning less than $50,000 annually. Mayor Andrew Ginther stated that there are not enough places for people to call home in July’s announcement of the issue.

Janna Sharon Sharrett is grateful to her apartment in a suburban Columbus housing complex. The area is preparing for Intel’s arrival as well as its real estate impact. The 60-year-old customer service rep works from home and earns just $14. 94 an hour. Her rent on the one-bedroom apartment she shares with her dog, Bella, and cat, Daisy, is $695.

The $6.5 million, 28-unit building where Sharrett lives was developed by Homeport, a Columbus-based nonprofit that works to expand affordable housing. Sharrett moved in two years ago seeking relief from a $1,000 rent payment, and today isn’t sure what she’d do without it.

She worries for the needs of people like her as the region expands through projects like Intel.

“Rent are outrageous. The prices of homes are ridiculous. Sharrett stated that Sharrett’s income is not excessive.

Across the country, a growing amount of companies are responding with ambitious plans to build thousands of new housing units. However, these plans fall short of actual housing needs.

In 2021, Amazon launched its $2 billion Housing Equity Fund to create over 8,000 affordable homes across three regions where it operates: the Puget Sound in Washington state; Arlington, Virginia, and Nashville, Tennessee.

In 2019, Apple announced that it would contribute $2.5 billion to alleviate California’s housing crisis. This is one of many initiatives by high-tech companies. This month Walt Disney World picked a developer to construct affordable housing on 80 acres of its land in Orange County, Florida.

Intel also looks forward to working with Ohio community leaders to meet the expected increase in housing demand over the next few decades, according to an Intel spokesperson Linda Qian. She did not provide details.

Experts agree that it is in Intel’s best interests to help alleviate the region’s housing crisis. According to a report from the Affordable Housing Alliance in Central Ohio, employers in Greater Columbus already blame high worker turnover as well as reduced productivity due to long commute times.

“Without a housing product, it can easily stifle Intel’s workforce needs and other companies,” said Jamie Green, a Columbus-based planner.

As the Intel project unfolds it highlights the challenges ahead, stated Leah Evans (CEO of Homeport), who developed Sharrett’s affordable apartment complex. This just showed that for every job you create, there’s a commute and a housing unit.” Evans stated. “You have to be thinking about all those things.”

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Michael Casey in Boston contributed to this report.

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