Intel Delay May Give Columbus Home Builders a Chance to Catch Up
Builders see an opportunity to ramp up construction as the $20 billion chip manufacturing plant in New Albany is delayed at least a year.
Time is a treasured commodity in the real estate world. So, Intel’s February announcement that the opening of its $20 billion chip manufacturing plant in New Albany could be delayed at least by a year was seen by some in the housing-starved Central Ohio community as a gift.
Construction has been continuing on the plant since the 2022 groundbreaking, but the computer chip giant cited the current business climate as one reason for the delay, possibly to the end of 2026 or beyond. The new plant, along with its subordinate businesses and other national companies opening facilities here, is expected to spur growth over the next 25 years, adding more than 725,000 residents that equals about 272,000 new households.
“This potentially gives people a little more time to put infrastructure in place and build some of the structures we need as this project takes hold,” says Jon Melchi, the executive director of the Building Industry Association of Central Ohio. “If some of the commercial activity slows for a period of time, we can ramp up the residential activity and maybe catch up.”
The need for housing now and in the future is pronounced, while continued scarcity could lead to rising costs. Builders constructed just over 12,000 new homes in 2022 and about 13,000 in 2023, but an additional annual build of 6,000 to 7,000 is needed. About 3,200 homes at all price points were available on the market at the start of 2023, about 2½ times fewer than what real estate agents would like to see, says Scott Hrabcak, president of Columbus Realtors.
“Intel is just one of many developments going on around Central Ohio so this delay may help bridge a little bit of the gap, but there is so much pent-up demand I’m not sure it moves the needle a ton,” Hrabcak says. “The supply and demand curve is still the challenge, and we are upside down until we can reach a tipping point to move the inventory needle in multiple price points.”
Utility providers like the Southwest Licking Community Water and Sewer District, responsible for water and sewer connections in the Intel region, are the foundation for business and residential development. Intel’s announced delay was not unwelcome in his quarter, says Jim Roberts, the organization’s executive director.
The district is capable of providing 3.5 million gallons of water and treating 2.65 million gallons of sewage per day. In the next five years, the district hopes to increase that volume to 10 million gallons a day for each system.
“Because our growth needs hit so suddenly, this gives us a little more time to catch up with what we think the needs are going to be,” Roberts says. “With the delay of Intel, we haven’t put anything on hold or delayed any of the things we think we need to do. We’re still trying to be ready and available when people want us.”
This story is from the April 2024 issue of Columbus Monthly.