Intel's announcement earlier this year of a $20 billion manufacturing operation bringing thousands of jobs to rural Ohio was greeted as an economic boon. But behind that enthusiasm lurked a pressing question.
"Where are we putting everybody?" 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 a major shortage.
Intel says its initial two computer chip factories will employ 3,000 people when the operation is up and running 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, along with the expected boom in the service sector.
Such housing challenges are playing out across the country as companies increasingly come under fire for failing to consider the shelter needs of their new employees or the impact big developments will have on already tight housing markets.
Experts agree that years of underbuilding dating to the Great Recession of 2008 have caused widespread housing shortages. Nationally, the country is short about one million homes, according to Rob Dietz, Senior Economist at the National Association of Home Builders. The National Apartment Association estimates a rental shortage of about 600,000 units.
We have underbuilt housing by 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 company comes into a community that is supply constrained, the demand that they're going to inject is going to affect home prices and rental prices because there's more demand than supply."
For a big company's impact on housing, look no further than Intel's own operations in Chandler, Arizona, which grew from a small agricultural city of about 30,000 in 1980 when the company built its first factory to a high-tech metropolis of 220,000. That was accompanied by tremendous housing growth, and today Chandler is running out of developable land, with nearly 95% of the area built out with residential, office, industrial and retail projects, according to the Greater Phoenix Economic Council.
Housing is also more expensive 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.
The challenge for areas like rural Ohio is that they don't have local employees 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's neither the housing nor the infrastructure to accommodate the thousands of new arrivals, increasing housing prices and possibly forcing existing residents out.
"It's economic development. It's going to employ people. But you are probably going to have to bring a lot of people into the area," he said. And "those jobs require housing." "If you don't recognize that and don't properly plan infrastructure, land use policies and manage that growth, it can be a big problem. The great opportunity turns into a big problem."
In central Ohio, the Intel site is rising on hundreds of acres of rural land once occupied by farm fields and modest homes where large business parks have also sprung up near major thoroughfares. The region has averaged about 8,200 building permits per year for both single-family and multi-unit buildings, even as job and population growth estimates predating the Intel project called for more than twice that, according to the Building Industry Association of Central Ohio.