Intel’s plans for a $20 billion chip manufacturing center in Ohio mean an affordable housing problem: “Where do we put everyone?”

Intel’s announcement earlier this year of a $20 billion manufacturing operation to create thousands of jobs in rural Ohio was hailed as an economic boon.

But behind this enthusiasm lurked an urgent 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 an area already experiencing significant shortages.

Intel says its first two computer chip plants will employ 3,000 people when they start operating in 2025. The project is also expected to employ 7,000 construction workers. And none of that includes the hundreds of additional jobs with the entry of Intel suppliers, along with the expected boom in the services sector.

These housing challenges are emerging across the country as companies come under increasing criticism for failing to take into account the shelter needs of their new hires or the impact that major developments will have on already tight housing markets.

Experts agree that years of building under construction dating back to the Great Recession of 2008 caused a widespread housing shortage. Nationally, the country is short of about 1 million homes, according to Rob Dietz, chief economist for the National Association of Home Builders. The National Association of Apartments estimates the rent deficit to be around 600,000 units.

“We’ve built housing in 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 large corporation enters a community that has supply constraints, the demand that it will inject … will affect house prices and rental prices because there is more demand than supply.”

For a large company’s impact on housing, look no further than Intel’s own operations in Chandler, Arizona, which has grown from a small farming town of about 30,000 in the 1980s when the company built its first factory to a high-tech town of 220,000 today. . That was accompanied by explosive growth in housing, and today Chandler is running out of developable land, with roughly 95% of the area built up with residential, office, industrial and retail developments, according to the Phoenix Greater Economic Council.

Housing is also more affordable 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.

Intel jobs “require housing”

The challenge for areas like rural Ohio is the lack of local staff to build or hire a major project, said Mark Stubb, 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 housing prices and possibly forcing existing residents out.

“It is economic development. You will hire people. But you will likely have to bring a lot of people into the area. and “Those jobs require housing.”

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

In central Ohio, the intel site rises on hundreds of acres of rural land that used to be occupied by farm fields and modest homes where large business complexes have also sprung up near major thoroughfares. The area averaged about 8,200 building permits per year for both single- and multi-unit buildings, even with estimates of population growth and jobs that predate Project Intel, according to the Central Ohio Building Industry Association.

“We’re not building enough of anything,” said group CEO John Melchi. Central Ohio, which today has a population of about 2.4 million, will grow to at least three million by 2050, the group said.

Trey Geller, CEO and president of Metro Development, one of Ohio’s largest condo developers, said the shortage in central Ohio includes the “missing middle” of workforce housing, or homes up to $250,000. A recent Zillow search showed only about 570 properties for homes $250,000 or less in the area.

The housing pressure is particularly severe for low-wage workers. Central Ohio already has about 71,000 families considered “severely burdened” — families spending more than half of their incomes on housing, the Ohio Homelessness and Housing Coalition said. She added that the district has only 34 affordable units available for every 100 low-rent households.

The problem is even more serious in Lycoming County, home to future Intel factories, where more than one in five tenants is considered overburdened by rent.

Affordable housing is critical to the low-wage workers who keep the economy going, from pre-school teachers to medical assistants, said Amy Riggle, executive director of COHIO. But housing must also be viewed in terms of spectrum: without enough high-end real estate to buy, buyers will snap up rents, which then drives out workers with limited resources.

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

On the November 8 ballot, Columbus voters approved a $200 million bond issue intended to increase the stock of affordable housing for homeowners earning less than $50,000 annually. “We simply don’t have enough places to live,” Mayor Andrew Ginter said in announcing the issue in July.

Outrageous rents and housing prices

Jana Sharett is grateful for her apartment in an affordable apartment complex on the outskirts of Columbus as the area prepares for the arrival of intel and its impact on real estate. The 60-year-old customer service rep works from home and earns just $14.94 an hour. The one-bedroom apartment she shares with her dog, Bella, and cat, Daisy, has $695 in rent.

The $6.5 million, 28-unit building where Sharett lives was developed by Homeport, a Columbus-based nonprofit working to expand affordable housing. Sharett moved in two years ago to get a $1,000 rent payment off, and today she’s not sure what she’d have done without it.

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

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

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

In 2021, Amazon launched a $2 billion housing equity fund to create more than 8,000 affordable homes in three areas 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 a number of high-tech company initiatives. Walt Disney World this month selected a developer to build affordable housing on 80 acres of its land in Orange County, Florida.

Intel, too, is looking forward to partnering with Ohio community leaders to prepare for increased housing demand over the next few years, said Linda Kean, a spokeswoman for Intel, without providing details.

Experts say it is in Intel’s interest to contribute to alleviating the housing shortage in the region. Employers in Greater Columbus are already blaming high worker turnover and lower productivity on long commute times, according to a report from the Affordable Housing Coalition of Central Ohio.

“Without the housing product, it could easily stifle the workforce needs of Intel and others,” said Jamie Green, a planning consultant in Columbus.

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

“It highlighted that for every job you create, you have a commute, you have a housing unit,” Evans said. “You have to think about all of these things.”

—Michael Casey in Boston contributed to this report.