Intel project in Ohio sparks housing fears in a tight market

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

But behind this enthusiasm was a pressing question.

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

Intel says its first two computer chip factories will employ 3,000 people when operations begin in 2025. The project is also expected to employ 7,000 construction workers. And none of this includes the hundreds of additional jobs from the influx of Intel suppliers and the expected boom in the service sector.

Such housing issues are playing out across the country as companies come under increasing fire for failing to consider the housing needs of their new employees or the impact of major developments on already strained housing markets.

Experts agree that years of underdevelopment from the Great Recession of 2008 has led to widespread housing shortages. The country is missing about 1 million homes nationwide, according to Rob Dietz, senior economist at the National Association of Home Builders. The National Apartment Association estimates a rent shortage at about 600,000 units.

“We’ve built millions of homes over the last 15 years,” said Dennis Shea, executive director of the J. Ronald Terdlinger Center for Housing Policy. “So if a big company comes into a community where supply is limited, the demand they’re going to inject will affect property and rental prices because there’s more demand than supply.”

To see a big company’s impact on housing, look no further than Intel’s own operations in Chandler, Arizona, which grew from a small farming town of about 30,000 people in 1980 when the company built its first factory. developed into a high-tech metropolis with 220,000 inhabitants today. This has been accompanied by tremendous housing growth, and today Chandler is running out of buildable land, with nearly 95% of the area being developed with residential, office, industrial and retail projects, according to the Greater Phoenix Economic Council.

Housing is also more expensive in Chandler, with an average home selling price of $525,000 compared to $455,000 in the greater Phoenix area and average rents of $2,027 compared to $1,950 in Phoenix.

The challenge for areas like rural Ohio is not having local staff to build or staff a large project, said Mark Stapp, director of the Center for Real Estate Theory and Practice at Arizona State University. There is neither the housing nor the infrastructure to accommodate thousands of new arrivals, which will drive up housing prices and potentially displace existing residents.

“It’s economic development. It will keep people busy. But you’re probably going to have to bring a lot of people to the area,” he said. And “these jobs require housing.”

“If you don’t see that and plan infrastructure and land use policies properly and manage that growth, it can become a huge problem. The big opportunity turns into a big problem.”

In central Ohio, the Intel site rises on hundreds of acres of rural land once occupied by fields and humble homes, where large commercial areas have also sprung up near major thoroughfares. The region has averaged about 8,200 building permits per year for both single-family and multi-family homes, though estimates of job and population growth prior to the Intel project required more than double that, according to the Building Industry Association of Central Ohio.

“We don’t build enough of anything,” said the group’s chief executive, Jon Melchi. Central Ohio, with a population of about 2.4 million today, will grow to at least 3 million by 2050, the group said.

Central Ohio’s shortage includes the “missing middle” of workers’ housing, or homes worth 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 only about 570 listings for homes worth $250,000 or less in the area.

Housing pressure is particularly strong for low-income earners. Central Ohio already has about 71,000 households that are considered “heavily rent-burdened” — families that spend more than half of their income on housing, the Coalition on Homelessness and Housing in Ohio said. It said there were only 34 affordable units for 100 low-rent households in the region.

The problem is even more serious in Licking County, the location of the future Intel plants, where more than one in five tenants is considered to be heavily rent-burdened.

Affordable housing is critical for the low-wage workers who keep the economy running, from preschool teachers to medical assistants, said COHIO chief executive Amy Riegel. But housing also needs to be viewed on a spectrum: Without enough high-quality properties to buy, buyers will snap up rents, which then shuts out workers with limited funds.

“Housing is definitely an ecosystem,” said Riegel. “If you add apartments on one end and don’t bother with the other end, there will be repercussions and a ripple effect throughout the system.”

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

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

The $6.5 million, 28-unit building in which Sharrett resides was developed by Homeport, a Columbus-based nonprofit dedicated to expanding affordable housing. Sharrett moved in two years ago to recover from a $1,000 rent payment and today isn’t sure what she would do without that payment.

She cares about the needs of people like herself as the region grows through projects like Intel.

“The rent is outrageous. House prices are outrageous. And my income isn’t outrageous,” Sharrett said.

Across the country, a growing number of companies are responding to housing concerns by embarking on ambitious plans for thousands of new housing units — though efforts have fallen far short of actual needs.

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

In 2019, Apple announced it would provide $2.5 billion to help ease California’s housing crisis, one of several initiatives by high-tech companies. This month, Walt Disney World selected a developer to construct affordable housing on 80 acres of its land in Orange County, Florida.

Intel, too, looks forward to working with leaders in the Ohio community to prepare for rising housing demand in the years to come, Intel spokeswoman Linda Qian said without giving details.

Experts say it is in Intel’s best interest to help alleviate the region’s housing shortage. According to a report by the Affordable Housing Alliance of Central Ohio, employers in the Columbus area are already blaming high turnover and reduced productivity on long commutes.

“Without the housing product, it can easily suffocate the staffing needs of Intel and others,” said Jamie Green, a Columbus-based planning consultant.

As the Intel project unfolds, it highlights the challenges ahead, said Leah Evans, president and CEO of Homeport, which developed Sharrett’s affordable apartment complex.

“This just brought to light that for every job you get, you have to have a commute and a housing unit,” Evans said. “You have to think about all these things.”


Michael Casey in Boston contributed to this report.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

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