Columbus looks to close housing affordability gap

State of play: Central Ohio faces a housing crisis, with demand outpacing construction, houses more expensive than ever and a deficit of affordable housing.

• The bond package backed by Mayor Andrew Ginther would continue "important progress" of $250 million in bonds previously approved in 2019 and 2022.

Between the lines: Housing in Columbus falls into a uniquely challenging gap.

• Despite average rent increasing consistently, it's still cheaper to live in Central Ohio than in most other major U.S. cities near our size.

The big picture: "I think people still expect rent to be much more affordable than what it actually costs to build apartments," says Bob Bitzenhofer, the Columbus Metropolitan Housing Authority's VP of planning and development.

• "'Affordable' at 80% of area median income rent is $1,200 for a one-bedroom, and people are like, 'Oh my god, that can't be right.' But math is math."

Yes, but: Lower rents don't shield the Columbus market from the rapidly increasing building prices faced by the entire country.

• "Cost of construction is pretty extraordinary right now," Erin Prosser, Columbus' deputy director of housing strategies, tells Axios.

That leaves developers — and the city — in a bind. Columbus needs housing and wants to keep prices down, but building it is expensive, and private developers don't build out of the goodness of their hearts.

• "What we know is that housing won't get built if there isn't enough revenue on the back side to pay that loan bill, keep the lights on and mow the lawns," Prosser says.

Follow the money: That's where the city hopes $500 million can help.

• Structured correctly, Prosser says, Columbus can inject capital dollars early in the process.
• That would close the lending gaps for developers by buying down their initial debt, allowing for lower rents required to maintain developers' bottom lines.

What will $500 million get us?

Prosser says Columbus' capital investment aims to incentivize two main types of housing developments.

Three-story walk-up or "garden apartment" buildings will be focused on construction affordability rather than density, with surface parking and no elevators or sprinkler systems. These are "as straightforward as you can get," and likely built in slightly less in-demand areas.

Steel apartment buildings will be smaller, but with many more units per square foot.

• They require more expensive materials, but are designed to add "the kind of density that we're hoping for" along corridors that need it.

Multifamily developments make a bigger dent in Columbus' housing shortage than single-family homes do, and it's harder for the city to support single-family developments.

• But Prosser says the city knows "it's really important that we expand the opportunity for wealth creation and the stability that comes with home ownership."
• To that end, she says the city will continue contributing funds to nonprofit Central Ohio Community Land Trust — which builds and maintains ownership of houses and issues 99-year renewable leases to homeowners who then share equity when the property is resold.

The fine print: In many ways, policy changes have the potential to be more impactful to single-family housing than just cash injection, Bitzenhofer says.

• Columbus is updating its zoning codes, has established a new Division of Housing Stability and plans to create registries of vacant and foreclosed properties as well as wholesalers — or "flippers."

The last word: Bitzenhofer is hopeful that reforms will lead to fewer restrictions, which allows for more affordable housing.

• "If you have houses jammed right next to each other that cost $800,000, that's tough to sell. But if you have houses close together in an urban environment that cost $300,000 or $250,000, that's easier to sell."