COLUMBUS, Ohio (WCMH) – Granite countertops and stainless steel appliances aren’t the only thing enticing Columbus residents to sign leases at apartment complexes deemed “luxury” by their owners.
Current and prospective tenants at some properties owned by Oakwood Management Company – including The City on Olentangy River Road in Columbus – have the chance to win a Tesla as part of an effort to recruit future tenants as demand for housing skyrockets and the Columbus metro area population grows, according to Ben Hasson, a leasing agent for The City.
Hasson said about 14% of units inside the year-old apartment complex are vacant. The Tesla raffle, discounted rent specials, and six months of free parking for residents who apply by a certain date is the company’s way to market itself to future tenants.
“People see Teslas as a luxury car, and I mean, someone can give away a Ford Focus or Honda Civic, but if they give away a Tesla, it’s a way bigger thing,” Hasson said.
Although Hasson said some central Ohioans might be deterred from The City’s rent prices, with available units starting at nearly $1,300 for a studio, Jen Noll said the demand for housing – at all price points – is high across the region.
“The reality is that we’re seeing a lot of luxury apartments. It might feel like it’s a lot to us – we see the cranes everywhere,” Noll, associate director of community development for the Mid-Ohio Regional Planning Commission, said. “But the need is really there and is great.”
From 2010 to 2020, Noll said the central Ohio region gained about 240,000 people, earning the area the No. 27 spot on a list of more than 400 metro regions in terms of population growth.
With more people buying homes and signing leases in central Ohio, Noll said the vacancy rate for multi-family homes in central Ohio sits at 3% or 4% – much lower than what she called a healthy 7% or 8% rate.
“That tells us that there’s not a whole lot of excess supply out there for households, and so we’d like to see that vacancy rate get a little healthier into that seven or eight percent range,” she said. “So there’s definitely an opportunity for more housing to help fill that gap.”
But, Jon Melchi, executive director of the Building Industry Association of Central Ohio, said until local governments start approving housing development proposals to accommodate the growing population, Columbus and neighboring cities are on a path toward running out of room for those looking to move.
Central Ohio should be building about 14,000 to 18,000 homes each year, but in 2020, only 10,859 were built, Melchi said. Of the nearly 11,000 homes constructed, 4,600 were apartment complexes – a decline of about 2,000 apartments from the year before.
“The reality is we are not building enough units of any market type,” Melchi said. “You need to continue to meet the demand, otherwise rents will continue to go up because there will not be enough supply.”
Part of the reason why rent at luxury apartment complexes like The City are so high, Melchi said, is because construction costs of residential buildings have increased significantly – in some cases by 30%-40%.
“Lumber costs alone add about $75 a month in rent to an apartment – just on lumber and material costs,” Melchi said. “That’s when you start seeing rents jacked up.”
As housing options dwindle, Kara Thompson, director of operations for Oakwood Management Company, said more Ohioans, from empty-nesters to divorcees to recent college grads, are moving into luxury apartment complexes.
“You can’t find homes,” Thompson said. “So I think they’re realizing, and they’re not sure if they want to stay forever, so they like a flexibility of a rental.”
With incentives like a free Tesla and six months of free parking, Melchi said some central Ohioans are sacrificing higher rent prices for low-maintenance living and high-end amenities.
“In the short term, until local governments start approving housing at a cliff that is reflective of the number of people moving to central Ohio, it’s going to a challenge for people to find housing,” he said.