Affordable housing bond delivered 1,300 new units, just a fraction of what’s needed
One of the methods the city is using to increase the stock of affordable housing in Columbus could be tripled, but unless new housing permits increase in other ways too, the city will fall short of new construction goals.
A $50 million affordable housing bond passed in 2019 contributed funds to 20 projects, creating 1,324 new housing units and a combined public/private investment of $300 million.
Now, the city plans to ask voters in November to approve an affordable housing bond of $150 million.
If that pans out, it could mean 4,000 new units of affordable housing with $900 million public/private investment.
The growing city needs more places for people to live. There aren’t enough housing options in Columbus to ensure people who work, but don’t have a high enough wage to pay market rates, have somewhere to live.
The city needs to add 14,000 new housing units a year in order to keep up with demand.
“We should be building 14,000 homes per year. But we're not. Even on our best year we're falling thousands of homes short of that goal, and as a result, 29% of Ohio's renters don't know how they're going to pay rent this month,” said Carlie Boos, executive director of the Affordable Housing Alliance of Central Ohio.
If the city were able to triple the number of subsidized units produced in 2021 under a new initiative with three times the funding, that would make up 12 percent of the annual goal of 14,000 new units a year.
In 2021, the 560 units added under the current bond program amounted to just 4% of the 14,000-unit annual goal.
The area fell about 3,000 new units short of its total housing goal last year.
The city could use a boost in multi-family construction to raise those figures.
Columbus’ assistant director of housing strategies Erin Prosser said the city favors projects that increase density in downtown areas and build up instead of out.
But according to the Building Industry Association of Central Ohio, multi-unit permits lagged behind permits for single-family housing in 2021.
While single-family permits rose 17% over 2020 figures, multi-family permits dropped 29%. And, single-family permits out-paced their counterpart, taking almost 60% of the total permits issued that year.
Part of the culprit is the cost of construction, Prosser said.
With construction costs so high and with limited subsidies, most developers are hesitant to build units that are affordable to people making $60,000 a year, or about 80% of the area median income.
“One of the challenges we have with bringing units below that 80% AMI level is that the market won't naturally bring them because of the cost of construction versus what we would like to see the rents remain at in order to allow folks to afford to live downtown. And so, there is a gap, a gap in the funding that has to be filled outside of traditional sources that our market-rate partners will utilize,” Prosser said.
That is the purpose of the bond program, to subsidize the cost to build so the developers can afford to charge lower rents.
At a groundbreaking earlier this month for a 98-unit, new construction project at South Washington Avenue and East Town Street across the street from Topiary Park, Columbus Downtown Development Corporation administrators and city officials celebrated the $25 million project that is using $7 million in public funds.
With five stories, the first for parking, the building will have studios, one-bedroom and two-bedroom apartments reserved for people making the median income in the area, and people making 60% to 80% of the median income.
At the groundbreaking, former Mayor Michael B. Coleman said the project fits into the vision he had decades ago to increase downtown living.
Columbus City Council President Shannon Hardin said downtown has room for more residents who want to live, work and relax in one neighborhood.
He said while 11,000 people live downtown now, 30,000 people lived downtown at the height of the mid-20th century.
Prosser said the downtown area was viewed for decades as a central business district only, but that is changing.
Several of the projects partially funded with the bond are downtown. That could help with the housing supply issue.
Boos said housing scarcity is seriously effecting many right now, especially those making $20 or less at their job.
“We only have 32 homes for every 100 extremely low-income people who need them. And because of that, the cost to rent just a plain old modest, affordable home in our community is $19.83 an hour. That’s what a wage earner needs to have coming in every month. And, most of our jobs don’t pay anywhere near that. Only about 1 in 10 of our jobs pay in that range,” Boos said.
When housing isn’t affordable, people have to spend money they might’ve used on medicine, food and other necessities on rent instead.
Prosser said too many working people in the city spend half of their paycheck on rent.
“We want families and individuals to not be paying more than 30% of their income on their housing so that they have opportunities for saving money to buy a house, to pay for childcare, to make sure they can maintain reliable transportation,” she said.