COLUMBUS (WCMH) — When the federal eviction moratorium ends on July 31, more people might soon be looking for affordable housing. But they won’t find much of it in Columbus.
An analysis provided by Vogt Strategic Insights, a Columbus-based firm that tracks U.S. housing markets, shows a surplus of luxury rental housing in the capital city and an insufficient supply of affordable rentals to meet demands.
Rob Vogt, a managing partner at VSI, says the high-end rental market was booming before the COVID-19 pandemic.
“Low vacancy rates, high rents, a willingness to develop properties, a willingness to lend money, a willingness to get zoning for projects,” he said, led to a lot of new high-end development that was scheduled to begin leasing in 2020.
“All this product comes online, they didn’t expect the pandemic to hit,” Vogt explained. “They didn’t expect a lot of – a decline in household formations.”
Vogt’s data shows high-end apartments in Columbus — including studio units — rented for an average of $1,215 per month in 2020. But Fair Market Rent in Columbus last year was $677 for a studio apartment, $794 for a one-bedroom and $992 for a two-bedroom unit, according to the U.S. Department of Housing and Urban Development.
Luxury housing to eclipse other types by 2026
The most startling finding from Vogt’s data, however, is that the availability of high-end rentals is outpacing the availability of affordable housing in Columbus. And soon there will be more luxury units (Class A) than non-luxury apartments (Classes B and C).
From 2010 to 2020, the number of Class A units in Columbus rose 54%, but Class B and C units rose less than 3%.
NBC4 used the average increase in the past decade to project when there will be more luxury apartments than other types in the city. The answer: just five years from now, in 2026.
Fueling the rise in luxury units, Vogt said, is that it’s no longer financially viable for developers to build affordable housing.
“The land costs and the construction costs are simply too high, if you were going to target a certain income range,” he said.
Prior to the pandemic, the Columbus city government took steps to expand affordable housing, partnering with developers to build hundreds of new units. Mayor Andrew Ginther also announced in May a $10 million development with 60 affordable units.
Columbus has also offered tax breaks to developers who offer 10% of their units to households earning 80% of the Area Median Income (AMI), and another 10% to households earning 100% of the AMI.
Councilmember Shayla Favor is looking to expand those incentives to include more people.
“When we talk about the term affordability, and we’re using Area Median Incomes, we need to ensure that we’re hitting our teachers, we’re hitting our janitors, we’re hitting our folks that have been deemed essential workers,” Favor said. “And that policy doesn’t go far enough.”