Central Ohio Faces Housing Shortage: Housing Study Calls for Increased Permitting Activity

Central Ohio Faces Housing Shortage: Housing Study Calls for Increased Permitting Activity 
URL: /blog/Details/central-ohio-BIA-housing-study

Central Ohio's housing market is booming, but not in the way we'd like. A recent housing study by the Building Industry Association (BIA) of Central Ohio reveals a significant gap between housing demand and construction. Here is a breakdown of the three key findings: 

1) High demand for homes and low production

2) Affordability crisis

3) Shortage across the board

High Demand for Homes and Low Production: Based on projected job growth, the housing study estimates a need for 14,000 new housing units annually through 2032. However, historical permitting activity falls far short, putting our economic growth at risk.

• Job Growth Engine: The BIA study analyzes projected job growth in Central Ohio. The job market creates a strong demand for housing units. When a company announces hundreds of new jobs, these new employees will need places to live, increasing the need for new homes and apartments.
  
  
• Shortage in Permits: However, the number of permits issued by the government for new housing construction falls far short of this projected demand. Permits are government approvals needed before construction can begin. A few permits suggest that factors like complex regulations or high construction costs might discourage builders from starting new projects.
  
  The study suggests Central Ohio needs to nearly double the number of permits issued for new housing construction to meet the current demand. This means there is a need to streamline the permitting process, reduce red tape and delays, or offer incentives to builders to encourage them to take on more projects.
  
  
• Benchmarking: Researchers compared Columbus to similar regions (state and national Metropolitan Statistical Areas) with similar socioeconomic characteristics. Our research found that Columbus trails behind its peers in the average number of annual permits. These findings suggest Columbus might need to learn from these other cities to improve its permitting process, attract builders, or find other ways to incentivize new housing construction.
  
  
  
  
  Shortage Across the Board:
  
  Widespread Impact: While the shortage is more pronounced in areas with high job growth or desirable amenities, all counties studied in Central Ohio are experiencing population growth and rising housing costs. This suggests the problem is not isolated but affects the entire region. Areas with more job growth or a lower existing housing stock might experience a greater shortage, but even areas with historically lower housing costs could be feeling the pinch.
  1) Zoning and land use
  2) Infrastructure investment 
  3) Construction costs and workforce development.
  

The mismatch between housing supply and demand can significantly hinder Central Ohio's economic growth. If people cannot find affordable housing options, businesses struggle to attract and retain employees, impeding economic expansion. Existing residents might face financial strain, and the overall quality of life could decline. Finding solutions to increase housing construction and focusing on affordable housing options is crucial for Central Ohio's future.

The housing study highlights the need for solutions across three areas: 

1) Zoning and land use

2) Infrastructure investment 

 3) Construction costs and workforce development.

Zoning and Land Use:

Re-evaluating Regulations: Zoning regulations often dictate what types of housing can be built in specific areas. The report suggests that these regulations should be reviewed to allow for more development of multi-unit housing (apartments, condos) or higher-density housing options (townhomes). This would help to create more housing units on less land.

Land-Use Practices: Land-use practices refer to how land is zoned and allocated for different purposes (residential, commercial, industrial). The report suggests that current practices favor single-family homes over other housing types. Re-examining these practices could involve designating more land for multi-unit housing development or allowing for mixed-use development projects that combine residential and commercial spaces.

Infrastructure Investment: 

Supporting Growth: Building new housing units requires additional infrastructure, such as roads, sewers, and schools. The report suggests that investments in these areas are necessary to handle the increased population that new housing would bring. Without proper infrastructure, building more housing could strain existing resources and lead to other problems.

Strategic Planning: These infrastructure investments need to be strategically planned alongside new housing developments. This might involve working with developers to ensure new projects are built in areas where existing infrastructure can be expanded or where new infrastructure can be built efficiently.

Construction Costs and Workforce Development: 

Addressing Rising Costs: The cost of building new housing units has been steadily rising. This is due to factors like a shortage of building materials and skilled labor. The report suggests that solutions are needed to address these rising costs, such as streamlining permitting processes or finding ways to reduce development costs.

Workforce Availability: There might also be a shortage of skilled workers in the construction trades. The report suggests that programs to train and recruit new construction workers are necessary to increase housing production. This could involve partnering with vocational schools or community colleges to develop training programs focused on the housing market's needs.

This isn't just a housing issue; it's an economic one. Failure to address the housing shortage can hinder Columbus's ability to attract and retain talent, impacting job growth.

The BIA's housing study serves as a wake-up call. By working together, policymakers, developers, and communities can find solutions to bridge the gap and ensure Central Ohio has a thriving housing and development market that meets the needs of all residents.

Download the full BIA Housing Study