Despite an abundance of new central Ohio apartment complexes, the region is not building anywhere near enough housing, according to a report by the Building Industry Association of Central Ohio.
The study concluded that central Ohio should be building between 14,000 and 21,000 new apartments and homes each year to accommodate anticipated need through 2050. Instead, the region will add about 8,400 new residences this year, about the same number as last year.
“Clearly, if historical building permit activity continues, the Columbus (area) will not meet the housing need based on the anticipated job growth projections through year 2050,” according to the report, prepared by the Columbus real-estate research firm Vogt Strategic Insights.
“Based on our estimates, permitting activity needs to increase two- to three-fold to meet the projected housing need over the next several decades.”
Robert Schottenstein, chief executive officer and president of M/I Homes, said there is no simple solution.
“This thing is going to move in baby steps,” Schottenstein said during a Columbus Metropolitan Club luncheon Wednesday where the report was unveiled. “It’s too low here. That’s the bottom line.”
The study “indicates just how significantly we’re under building relative to demand — and how the shortfall will worsen over the coming decades if nothing changes,” said BIA executive director Jon Melchi.
About 7,100 permits were issued in central Ohio for new apartments and homes each year between 2010 and 2017, far fewer than comparable growing metropolitan areas, according to the report.
During the same period, an average of 13,189 permits were issued each year in Nashville, Tenn., 15,602 in Charlotte, N.C., and 18,833 in Austin, Texas.
“Builders are capitalizing on that in virtually every other market in the country. Not here,” Schottenstein said.
Schottenstein and Melchi said builders struggle to keep up with demand in central Ohio because zoning regulations — especially limitations on how many homes can be built per acre — are too onerous.
When compared to regional cities such as Indianapolis or Cincinnati, Columbus isn’t as far behind, illustrating that the shortage of new housing is a national, not merely local, challenge.
The inability to add more homes has pushed central Ohio housing prices up across the board, making it harder for residents to buy homes, according to the study. Between 2012 and 2017, central Ohio home prices rose 5.8% each year on average. Household income, however, only rose 1.24% a year during the same period.
“This report will guide important discussions about how the region can address the issue and its root causes — unfavorable density requirements, workforce and labor shortages, regulatory costs and material inflation — as we aim to supply homes and apartments at all price points and in all communities to support the growth of our entire region,” Melchi said.
Tribune Content Agency