Ohio’s Intel Project Triggers Housing Fears In Tight Market

Ohio's Intel Project Triggers Housing Fears In Tight Market

Jana Sharett takes a break from her job as a full-time customer service representative for a contact lens and eyeglass company at her home on Tuesday, November 1, 2022 in Grove City, Ohio. Sharett makes $14.94 per hour but pays only $695 per month in rent thanks to affordable apartments created by a local nonprofit to increase low-rent options in downtown Ohio. According to Intel Corporation. There is a housing shortage in the area. He is planning a $20 billion project that is expected to add thousands of new residents. (AP photo/Andrew Welsh-Huggins)

COLUMBUS, Ohio (AP) — Intel's announcement earlier this year of a $20 billion manufacturing deal that would create thousands of jobs in rural Ohio was hailed as an economic boon.

But behind the enthusiasm, there are pressing questions.

Where are we taking everyone? asked Melissa Humbert Washington, vice president of housing programs and services for families, which helps low-wage workers find housing in areas with a severe housing shortage.

When Intel launches in 2025, the first computer chip maker will employ 3,000 people. The project is expected to employ 7,000 construction workers. And all of this won't add hundreds of additional jobs as Intel vendors come with expected service growth.

These housing problems are cropping up across the country as companies fail to consider the housing needs of their new hires or the impact major events will have on an already tight housing market.

per year Experts agree that the years of the housing boom following the 2008 Great Recession led to a widespread housing shortage. According to Rob Dietz, chief economist for the National Association of Home Builders, the country is short on about 1 million homes. The National Apartment Association estimates the rent gap to be around 600,000 units.

"Over the last 15 years, we've built millions of homes," said Dennis Shih, executive director of the JJ Housing Policy Center. Ronald Terwilliger. “So when a large company moves into a community with limited supply, the demand they provide… will impact housing prices and rents as demand outstrips supply.”

To study the impact of large corporations on housing, look at Intel's work in Chandler, Arizona, which grew from a small farming town of about 30,000 people in 1980, when the company built its first factory, into a high-tech town of 220 people. . thousand souls. population today. This has led to a housing boom, and today Chandler is running out of buildable land, with nearly 95% of the area developed with residential, office, industrial and commercial real estate, according to the Greater Phoenix Economic Council.

Housing is also more affordable in Chandler, with average home selling prices of $525,000 compared to $455,000 in Greater Phoenix, and rents averaging $2,027 compared to $1,950 in Phoenix.

The problem in rural areas like Ohio is that they don't have local builders or workers for large projects, says Mark Stubb, director of ASU's Center for Real Estate Theory and Practice. There is no housing or infrastructure to accommodate the thousands of new arrivals, causing rising house prices and potential displacement of existing residents.

"This is economic development. It will give people jobs. But you may need to bring more people into the area . And these jobs require housing,” he said.

“If you don't know this and plan infrastructure, land use and development policies inappropriately, it can become a big problem. Big opportunities turn into big problems.

In central Ohio, exploratory land included hundreds of acres of country land formerly occupied by farms and modest homes, where large business complexes grew along major highways. The state issues an average of 8,200 building permits per year to single- and multi-family homes, though this requires more than twice the number of pre-Intel Intel and population growth estimates.

"We didn't build anything," said John Melchi, the group's chief executive. Central Ohio, which is home to about 2.4 million people today, will grow to at least three million by 2050, according to the group.

Central Ohio's shortage of labor housing or homes under $250,000 includes a "missing middle ground ," said Trey Geller, CEO of Metro Development and one of Ohio's largest condo developers. A recent Zillow search turned up only 570 listings for homes priced at $250,000 or less.

The housing problem is especially strong for low-wage workers. There are already about 71,000 families in Central Ohio who are considered "heavily rent-burdened" — families spend more than half their income on housing, according to the Ohio Homeless and Housing Coalition. The report stated that out of every 100 units of rented houses in the area, only 34 units were affordable.

The problem is even more serious in Lycoming County, home to Intel's future factory, where one in five tenants is estimated to be burdened with rent.

“Affordable housing for low-wage workers, from preschool teachers to paramedics, is critical to sustaining the economy,” said Amy Riggle, chief executive of COHIO. But housing also has to be looked at broadly: if there aren't enough luxury properties to buy, buyers will buy rents, and this doesn't include workers with limited resources.

"The house is definitely an ecosystem ," says Riegel. "If you add problems to one side and don't take care of the other side, it affects the whole system."

On November 8, Columbus voters approved the issuance of a $200 million bond to increase affordable housing in the city for homeowners who earn less than $50,000 a year. "We don't have enough living space ," Mayor Andrew Ginter said when he announced the problem in July.

Gianna Chert is grateful for her apartment in affordable housing on the outskirts of Columbus as the area prepares for the arrival of Intel and its impact on real estate. This 60 year old customer service representative works from home and only makes $14.94 per hour. The rent for the one-bedroom apartment he shares with his dog Bella and cat Daisy is $695.

The $6.5 million 28-unit building that Sharett lives in was built by Homeport, a Columbus-based nonprofit that aims to expand affordable housing. That chart came out two years ago for $1,000 as a rental allowance, and today you don't know what you would do without it.

As the territory grew for projects like Intel, they were concerned about the need for people like him.

The rental price is shocking. House prices are up. My earnings are not bad,” said Sherit.

Across the country, a growing number of companies are responding to the housing crisis by launching sweeping plans to build thousands of new homes, even though their efforts fall far short of actual needs.

That same year, Amazon launched a $2 billion equity fund to build more than 8,000 affordable homes by 2021 in the three regions where it operates: Puget Sound in Washington State; Arlington, Virginia and Nashville, Tennessee

In 2019, Apple said it would spend $2.5 billion to ease California's housing crisis, one of many initiatives being taken by the tech company. This month, Walt Disney World selected a developer to build affordable housing on 80 acres of land in Orange County, Florida.

Intel spokeswoman Linda Tian said Intel looks forward to working with leaders in the Ohio community to prepare for increased housing demand in the coming years.

Experts say helping the region's housing shortage does more for Intel. Employers in Greater Columbus are already facing high employee turnover and low productivity due to long commutes, according to a report from the Central Ohio Affordable Housing Coalition.

“Without housing, the demand for labor for Intel and others could easily fall,” said Jimmy Green, a planning consultant in Columbus.

Leah Evans, president and CEO of Homeport, which built the Sharrett low-cost housing development, said Intel's project highlights issues that need to be addressed when it opens.

I understand that for every job you create, you have travel requirements and residency requirements, ” says Evans. "You should think about all these things."

Watch NBC News Live – October 16

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