This is the fifth in a series about how Intel’s new superconductor site in Licking County will affect Knox County decisions. Part 1 is here, Part 2 is here, Part 3 is here, and Part 4 is here.
MOUNT VERNON — Like virtually every county nationwide, Knox County is grappling with an affordable housing problem.
But housing is multi-faceted, and there is no one solution. Wages, size, location, and rentals vs. home ownership all come into play. Sometimes, they are at odds with one another.
Housing joins economic development, land use, and workforce skill sets as a component of the Knox County Growth Strategy Report.
The report, released last year, analyzes how Intel’s $20 billion semiconductor facility in Licking County affects Knox County. Even without Intel’s added impact, Knox County faces growth, and an effective housing response is essential.
Local officials and residents already know Knox County has a housing shortage. Area Development Foundation President Jeff Gottke said not only did the growth report build on the ADF’s previous housing study, but it also provided more information.
“Instead of just quantifying demand or the number of units, it also helped quantify salaries for new and existing jobs and therefore rent,” he said.
Mismatched units
A cost-burdened renter or homeowner pays more than 30 percent of their income for monthly rent or mortgage.
A mismatched unit is a renter or homeowner who pays either more or less than 30% of their income toward housing. Knox County’s housing stock is more than 60% mismatched.
•Rental units
44% (2,498) cost-burdened
40% (2,247) pay less than 20% of income toward rent
•Owner-occupied units
14% (2,316) cost-burdened
50% (8,205) pay less than 20% of income in a mortgage
This means that 10,452 renters or homeowners can afford to move up in housing (pay more). If you include those who pay between 20% and 30% of monthly income for housing, the number rises to 16,881.
The report also found Knox County trails the state average in the number of one- and two-bedroom units at a price point of more than $1,000 monthly.
“The Rockford, Lemmon, and Highland Real Estate developments will help with some of that mismatch for those who can afford more scale,” Gottke said.
The Graduate Since 1939 complex also fits that price point.
Speaking at an Intel update in Utica on Jan. 24, Betsy Goldstein of Betsy Goldstein Consulting noted that the availability of higher-priced housing reduces competition for lower-priced housing.
Affordable housing: Cost-burdened
Gottke acknowledged that developments underway won’t help cost-burdened individuals because pricing is too high for their rent scale. So, how do we help those who are cost-burdened?
“Build more affordable housing and attract higher-paying jobs,” Gottke responded.
“Affordable housing comes in a lot of ways. You can get it through infilling on existing lots where there is no infrastructure cost.”
Citing Schlabach’s development on Upper Gilchrist, he noted that the lot price is high because the buyer is paying to install water and sewer pipes and roads.
“Density is another way to do affordable housing,” he continued. “Building more units per acre will help to keep costs down.
“There really is no silver bullet. It’s more like arrows in the quiver.”
ADF President jeff gottke on housing solutions
“But people get scared when they hear multifamily; they think that it’s automatically going to be low-income tax credits.”
Gottke said allowing accessory dwelling units — garage, attic, or basement conversions —is a third way to promote affordable housing.
“That would create affordability and downward pressure on the rental market in general,” he explained.
Historic preservation tax credits or subsidies to convert a building into residential are additional ways to lower housing costs.
When people hear the word subsidies, they often think of Section 8 housing vouchers through the U.S. Department of Housing and Urban Development.
“The community has made it very clear that they don’t want that. We don’t work with a lot of those builders because it’s too hard of a lift,” Gottke said.
How many bedrooms?
Knox County lags behind the state average in one-bedroom units renting for less than $300 a month ($14,400 household income needed).
It exceeds the state average for two-bedroom units renting for less than $750 a month ($36,000 household income).
Gottke said the best way to get $300 apartments is to convert existing buildings into affordable units. That also gets back to converting attic or garage space.
“But it’s very important not to confuse affordable with low quality or high crime or disinvestment,” he said. “A community should have housing units that can meet all income types, and we shouldn’t be discouraging any of these things.”
In general, the county can use more one- and two-bedroom units.
Rockford plans 164 one-bedroom apartments and 332 two-bedroom units at its Upper Gilchrist complex, The Retreat at Mount Vernon. Highland Real Estate’s Liberty Crossing plans 128 units each for one- and two-bedroom apartments.
“The more units that come online, that has an effect on price. The higher the supply, the lower the price,” Gottke said.
Affordable housing: Location
The county needs more housing to fill the current demand, the “do nothing” approach to Intel. Depending on which growth strategy the county adopts toward Intel — moderate, strong, or aggressive — Knox County could need between 3,156 and 9,449 housing units over the next 10 years.
Building additional units at whatever pace leads to the question of location.
Gottke reiterated that the best place to put housing is near already developed areas so that “we are not annexing large swaths of farmland.”
However, he acknowledged that at some point, the county will lose farmland.
“What’s important to understand is that development and agriculture aren’t mutually exclusive,” he said. “Some places might lose farmland, but not countywide.
“Rural character doesn’t have to be measured just by the amount of farmland that exists.”
Gottke said locating development underscores the need for a countywide comprehensive plan.
“What goes where has to be a community input. The not-in-my-back-yard people are naive to think they won’t get something in their back yard. So the most appropriate thing is to ask what do I want in my back yard?”
The flip side
Raising income is the flip side to increasing stock. Higher wages mean households have more income to put toward housing.
“That’s what we do every day here at ADF, work to attract companies with higher-paying jobs,” Gottke said. “But we also work with existing companies to raise wages.
“We work with human resources departments to help them understand the value to themselves of higher wages.”
Existing companies can raise wages through cost-saving efficiencies. Education also plays a role.
“That’s the importance of the career center, Knox Technical Center, COTC, or any of our adult retraining or educations programs. They offer workers an opportunity to up-skill,” Gottke said.
“Some companies are saying the more machines you know how to use on the floor, the more you get paid. Instead of doing longevity bonuses, they’re doing competency bonuses.”
Housing, especially affordable housing, is a complex topic with or without Intel’s potential influence. But Gottke said, “It’s a good problem to have.”
“We’re having discussions about growth and how best to be responsible. The economic conditions of not having any growth or not decreasing those problems is way worse than the problems created by growth,” he said.
But, he said, it is a tough conversation.
“We all have an idea of what we like about Mount Vernon or Knox County or wherever you live, and sometimes growth can interfere with that. I get it,” Gottke said.
“Rural lifestyle is being threatened, and it’s perfectly valid to be concerned. Having the facts can help allay some of those fears.”