It’s a seller’s market in Central Ohio as inventory remains low, and that’s likely to continue as homebuilders find it more difficult to construct new housing.
"Primarily the biggest problem we have is that our builders and developers cannot get the densities to put enough housing units up,” says Jon Melchi, executive director of the Building Industry Association (BIA) of Central Ohio.
The BIA of Central Ohio is holding its annual conference Wednesday afternoon, January 30, at the Ohio Expo Center.
Melchi says to keep up with demand, builders need to create 14,000 housing units each year in the Central Ohio market, which includes Franklin County and nine other counties surrounding I-270. Currently, he says they are only building about 8,000 units per year.
It’s estimated 1 million additional people will live in Central Ohio by 2050.
Melchi argues local regulations add to building costs and stymie growth.
“The biggest challenge is local regulations, which include density, inspection fees and water tap fees, which are among the highest in the United States,” Melchi says.
Melchi says regulatory fees can take up to 60 percent of the cost to build a new home.
“Right now, it is very difficult to build and sell a home at what some would call an affordable price,” Melchi says.
Melchi says a new single-family home can cost at least $250,000, and that can be too expensive for most young families. He says local communities can be more responsive to homebuilders.
“What we know, though, is that new development does not always equal a bunch of new students into the schools," Melchi says. "And what we are trying to communicate is that new development equals jobs, and it equals growth for the community and we’ve got 30 years of data to back that up.”
The shortage of skilled workers in the construction industry also raises costs, Melchi says, since homebuilders compete with commercial builders for the same workers.
“We absolutely must address the worker shortage that we have in the construction trades,” Melchi says. “This is driving up the cost of homes and it’s a significant challenge across the country and here in Central Ohio.”