Area needs apartments to catch up to demand

It’s impossible to drive anywhere in central Ohio without being confronted with this question: How many more apartments can the market handle?

The answer is: probably a lot more.

Between 4,000 and 5,000 apartments will be built this year, and that’s expected to set a record for this century. And there’s still no indication that the market is overbuilt. For the most part, apartment buildings start to fill up as quickly as they open.

Recent research reinforces that still more are needed:

■ A study commissioned by apartment trade groups National Multifamily Housing Council and National Apartment Association concluded that the Columbus area will need more than 33,000 new apartments by 2030. Considering that new complexes have an average of about 200 apartments, that’s a lot of new complexes.

■ The rental website Apartment List looked at the main driver of housing demand — job growth — to determine which of the nation’s 50 largest metropolitan areas needed more new homes — both apartments and single-family.

The study concluded that only 10 communities were keeping pace with demand. Columbus wasn’t one of them. Instead, the area ranked 15th out of 50 for the number of new apartments needed.

Central Ohio added one new home or apartment for each 2.9 jobs between 2010 and 2015, well below the number needed to support demand, according to the study.

“Construction of new houses and apartments has not kept up with job growth in major cities, a contributing factor to the nation’s housing shortage,” concluded the report.

Less than 5 percent of central Ohio apartments are empty, and rents rose over the past year at a very healthy 5 percent, according to the apartment information service Yardi Matrix.

Yes, this year is likely to see lots of new apartments, but keep in mind that for several years before the market recovered in 2012, few market-rate apartments

were built. So to a certain extent, the market is catching up.

Central Ohio adds about 20,000 residents each year, or about 10,000 new households, far more than the number of apartments being built. Add in 3,500 houses being built this year, and the new housing still falls far short of the new population.

If you work Downtown, like I do, all the apartments seem to be going up in the city's center. But the apartment explosion isn't a Downtown story; it's a central Ohio story. The fact is, apartments are going up everywhere, from Hilliard to New Albany, Delaware to Canal Winchester, and dozens more places.

Expect those cranes to continue rising for at least a few more years.