Intel’s announcement earlier this year of a $20 billion manufacturing project that is bringing thousands of jobs to rural Ohio was greeted as an economic boost.
But behind that excitement was a serious question.
“Where are we putting everyone?” asked Melissa Humbert-Washington, vice president of programs and services at Homes for Families, which helps low-wage workers find housing in an already struggling community.
Intel says its first two computer factories will employ 3,000 people when the project begins in 2025. The project is also expected to hire 7,000 construction workers. And that doesn’t include the hundreds of additional jobs that Intel’s partners are getting into, and the expected increase in the service sector.
Similar housing crises are occurring across the country as companies grapple with failing to consider the housing needs of their new workforce or how large-scale development will affect existing housing markets.
Experts agree that years of underbuilding in the Great Recession of 2008 have led to a housing shortage. Nationwide, the country is about 1 million homes short, according to Rob Dietz, an economist at the National Association of Home Builders. The National Apartment Association estimates a decrease in rents of about 600,000 units.
Dennis Shea, director of the J. Ronald Terwilliger Center for Housing Policy, said: “We’ve built millions of homes in the last 15 years. “So when a big company comes into an area that has limited supply, what they want to supply … will affect housing prices and rental rates because there is more demand than supply.”
For a large company’s impact on housing, look no further than what Intel has done in Chandler, Arizona, which has grown from a small farming town of about 30,000 in 1980 when the company built its first factory to the sprawling metropolis of 220,000 today. This was accompanied by a huge housing boom, and today Chandler is in need of land for development, about 95% of the built-up area is residential, office, industrial and commercial, according to the Greater Phoenix Economic Council.
Housing is more expensive in Chandler, with a median home sale of $525,000 compared to $455,000 in greater Phoenix, and a median rent of $2,027 compared to $1,950 in Phoenix.
Intel jobs ‘need a home’
The problem with communities like rural Ohio is that they don’t have the local workforce to build or do major projects, said Mark Stapp, director of the Center for Real Estate Theory and Practice at Arizona State University. There are no houses or buildings to accommodate the thousands of new arrivals, driving up housing prices and forcing existing residents out.
“It is economic development. It will hire people. “But maybe you need to bring more people to the area,” he said. And “those jobs need a home.”
“If you don’t realize this and don’t plan well for infrastructure, operational plans and managing that growth, it can be a big problem. A great opportunity turns into a great challenge. “
In central Ohio, the Intel site is rising on hundreds of acres of rural land that was once home to farms and cottages while large parks have re-emerged near highways. The area has received about 8,200 building permits a year for single-family and multi-family housing, as the number of jobs and population before the Intel project is expected to double, according to the Building Industry Association of Central Ohio.
“We’re not building enough of anything,” said team CEO Jon Melchi. Central Ohio, which has about 2.4 million people today, will grow to 3 million by 2050, the group said.
Central Ohio’s lack includes the “lack of middle” of housing workers, or housing up to $250,000, said Tre’ Giller, CEO and president of Metro Development, one of Ohio’s largest home builders. A recent Zillow search showed only about 570 home listings for $250,000 or less in the area.
The housing pressure is particularly high for the minority workers. Central Ohio already has about 71,000 families that are considered “highly burdened” — families that spend more than half of their income on housing, said the Ohio Coalition on Homelessness and Housing. The area has only 34 affordable units available for every 100 households with low rent, it said.
The problem is particularly acute in Licking County, home to Intel’s future plants, where more than one in five renters are considered overburdened.
Affordable housing is essential for low-wage workers who keep the economy running, from high school teachers to medical assistants, said COHIO director Amy Riegel. But housing also needs to be seen in public: Without high-rises to buy, buyers pay rent, which locks out poor workers.
“A home is an environment,” Riegel said. “If you add a building at one end, and don’t take care of the other end, it has a negative impact and disrupts the whole system.”
On the Nov. 8, Columbus voters approved a $200 million bill aimed at increasing the city’s affordable housing for homeowners making less than $50,000 a year. “We don’t have enough places for people to live,” said Mayor Andrew Ginther when announcing the issue in July.
The ‘disadvantages’ of rent and house prices
Janna Sharrett appreciates her home in affordable housing in Columbus as the area prepares for the arrival of Intel and its impact on the area. A 60-year-old customer service manager works from home and earns 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 where Sharrett lives was designed by Homeport, a nonprofit in Columbus that works to develop affordable housing. Sharrett moved out two years ago seeking relief from the $1,000 rent payment, and today she doesn’t know what she would have done without it.
He is concerned about the needs of people like himself as the community grows through services like Intel.
“Rent is obscene. Housing prices are obscene. And my income is not very high,” Sharrett said.
Across the country, a growing number of companies are responding to housing concerns by launching sustainable plans for thousands of new housing units – even if the efforts are failing.
In 2021, Amazon established a $2 billion Housing Equity Fund to build more than 8,000 affordable housing units in three areas where it operates: Puget Sound in Washington state; Arlington, Virginia, and Nashville, Tennessee.
In 2019, Apple said it would donate $2.5 billion to alleviate California’s housing crisis, one of several initiatives the tech giant has taken. This month Walt Disney World selected a developer to build affordable housing on 80 acres of its property in Orange County, Florida.
Intel, in turn, hopes to work with community leaders in Ohio to plan for the number of homes needed over the next few years, said Intel spokeswoman Linda Qian, without providing details.
Experts say it is useful for Intel to help solve the housing shortage in the region. Employers in greater Columbus are already blaming high labor costs and long-term productivity declines, according to a report by the Affordable Housing Alliance of Central Ohio.
“Without infrastructure, it could hinder the needs of Intel and others,” said Jamie Green, a planning consultant in Columbus.
Intel’s work is underway, signaling the challenges ahead, said Leah Evans, president and CEO of Homeport, which developed Sharrett’s affordable housing.
“It just goes to show that for every job you do, you have time to travel and you have a home,” Evans said. “You have to think about all these things.”
-Michael Casey in Boston contributed to this story.
