Intel’s plan for a $20 billion chip manufacturing hub in Ohio means an affordable housing problem: “Where are we putting everyone?”

Intel’s announcement earlier this year of a $20 billion manufacturing operation that has brought thousands of jobs to rural Ohio has been hailed as an economic boon.

But behind that enthusiasm was a pressing 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 a region already suffering from a severe shortage.

Intel says its first two computer chip factories will employ 3,000 people when the operation goes live 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, coupled with the expected boom in the services sector.

Such housing challenges are playing out across the country as companies increasingly come under fire for failing to consider the housing needs of their new employees or the impact big developments will have on already tight housing markets.

Experts agree that years of underconstruction dating back to the Great Recession of 2008 have caused widespread housing shortages. Nationally, the country is short on about 1 million homes, according to Rob Dietz, a senior economist at the National Association of Home Builders. The National Apartment Association estimates a rental shortage of approximately 600,000 units.

“We’ve underbuilt housing of 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 business comes into a community that’s supply-constrained, the demand that they’re going to inject … it’s going to affect house prices and rental prices because there’s more demand than supply.”

For a large company’s impact on housing, look no further than Intel’s Chandler, Arizona operations, which grew from a small farming town of about 30,000 in 1980 when the company built its first factory, to a high-tech metropolis of 220,000 today. This has been accompanied by tremendous housing growth, and Chandler is now running out of building land, with nearly 95 percent of the area built on residential, office, industrial and commercial projects, according to the Greater Phoenix Economic Council.

Housing is also more expensive in Chandler, with an average 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.

Intel jobs ‘require housing’

The challenge for areas like rural Ohio is that they don’t have local employees to build or hire for 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 the thousands of newcomers, driving up house prices and possibly forcing existing residents out.

“It is economic development. It will employ people. But you’ll probably have to bring a lot of people to the area,” she said. And “those jobs require housing.”

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

In central Ohio, Intel’s site is being built on hundreds of acres of rural land once filled with farm fields and modest homes where large retail parks have also sprung up near major thoroughfares. The region averages about 8,200 building permits annually for both single-family and multi-family buildings, even though pre-Intel job and population growth estimates required more than double that, according to the Building Industry Association of Central Ohio.

“We’re not building enough of anything,” said group executive director Jon Melchi. Central Ohio, with 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 half” 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 search by Zillow showed only about 570 listings for homes $250,000 or less in the area.

Housing pressure is particularly intense for low-wage workers. Central Ohio already has about 71,000 households considered “severely rent-burdened” — households that spend more than half of their income on housing, said the Coalition on Homelessness and Housing in Ohio. The region has just 34 affordable units available for every 100 low-rent households, he said.

The problem is even worse in Licking County, home to future Intel factories, where more than one in five renters are considered severely rent-burdened.

Affordable housing is critical for the low-wage workers who keep the economy going, from preschool teachers to medical assistants, said COHIO Executive Director Amy Riegel. But housing also needs to be viewed on a spectrum: Without enough high-end properties to buy, buyers will accept rentals, which rules out workers of limited means.

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

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

‘Outrageous’ rent and house prices

Janna Shrett is thankful for her apartment in an affordable housing development in suburban Columbus as the region prepares for the arrival of Intel and its real estate impact. The 60-year-old customer service rep works from home and makes just $14.94 an hour. Her rent for her one-bedroom apartment that she shares with her dog, Bella, and cat, Daisy, is $695.

The $6.5 million, 28-unit building that Shrett lives in was developed by Homeport, a Columbus-based nonprofit working to expand affordable housing. Shrett moved here two years ago seeking relief from a $1,000 rent payment, and today she’s not sure what he would do without it.

She cares about the needs of people like her as the region grows with projects like Intel.

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

Across the country, a growing number of companies are responding to housing concerns by rolling out ambitious plans for thousands of new housing units, though efforts fall far short of real needs.

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

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

Intel also looks forward to working with Ohio community leaders to prepare for increased housing demand in the coming years, Intel spokeswoman Linda Qian said, without providing details.

Experts say it is in Intel’s best interest to help alleviate the region’s housing shortage. Employers in the Columbus metro area already attribute high worker turnover and reduced productivity to long commute times, according to a report by the Affordable Housing Alliance of Central Ohio.

“Without the real estate product, it can easily stifle the needs of Intel’s workforce 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 the affordable Sharrett apartment complex.

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

—Michael Casey of Boston contributed to this report.

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