With $6.5 Billion in Multifamily Development since 2000, Columbus Lags Behind Competitive Markets
Based solely on the sight of construction cranes and orange barrels, it’s apparent that Columbus is in the midst of an apartment-building boom. A new report from ApartmentList.com puts some raw numbers behind what exactly that means for our city, and how it compares to other markets across the U.S.
According to the study, the Columbus Metro Area (the city, its suburbs and surrounding counties) has seen $6.5 billion invested in multi-family construction projects (generally, apartments and condos) between 2000 and 2016. The rate at which this type of development has been occurring in Columbus has also been accelerating, with the percentage of residential development investment dollars spent on multifamily projects growing from 13.6 percent to 30.6 percent over the course of the past 16 years.
“Although 69 percent of all households in the U.S. live in single family homes, multifamily properties have become increasingly important to our housing markets,” stated housing economist Chris Salvati at Apartment List. “As our economy has shifted toward knowledge work, there has been an increase in demand for housing in the metropolitan cores where these jobs tend to be located.”
While the recent construction boom in Columbus feels significant — particularly in the wake of the Great Recession between 2007 and 2009 — the level of growth in our region still pales in comparison to many other cities across the country. During the same 2000 to 2016 timeframe, Phoenix has been home to double the amount of multifamily development ($13 Billion), while Chicago has seen triple the investment of Columbus ($19.8 Billion). Other peer markets outpacing Columbus include Denver ($12 Billion), Minneapolis ($8.6 Billion), Portland ($8.2 Billion), Charlotte ($9.5 Billion) and Austin ($12.8 Billion).
“When controlling for metro population, the fast-growing tech hubs of Seattle and Denver had the highest levels of per-capita spending on multifamily construction,” explained Salvati. “Although housing markets in these areas have still struggled to keep pace with their booming job growth, this new supply has surely helped to temper rent growth.”
While rental prices have continued to rise in Columbus alongside the increased demand for rentals, the city has remained affordable compared to other major U.S. metros. In February, Columbus ranked 95th in terms of rental pricing (San Francisco ranks 1st for most expensive) with a median one-bedroom rental in Columbus priced at $693 per month.
Meanwhile, the construction of new single family housing lags all across the country, driving for-sale housing prices higher as the demand continues to outpace supply.
“Construction of new homes remain
at depressed levels in the face of increased costs for land, labor and materials,” says Salvati. “Single family construction has failed to recover to the same extent, with real spending still at less than half its peak level.”
The level of multifamily development in Columbus leads the state of Ohio, and much of the Midwest, outpacing Cincinnati ($3 Billion), Cleveland ($990 Million), Detroit ($3.5 Billion), Pittsburgh ($2 Billion), Indianapolis ($4.9 Billion) and Louisville ($2.2 Billion).
To view the full report, visit www.apartmentlist.com.
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