Flipping back the calendar to 2005, three brothers created a new business that would impact the Columbus real estate and grow their wisdom: New City Homes.
Sean, Chris, and Brian Knoppe started small with just a few houses in suburban subdivisions. They then pivoted to renovating houses throughout the Great Recession. And more recently, they’ve put more emphasis on urban redevelopment projects.
“All three of us have lived in the urban neighborhoods around downtown Columbus and have formed an appreciation for the renewal and growth that has been occurring in recent years,” said Chris Knoppe.
But the brothers have hit difficult growing pains. Chris pulled back the curtain to reveal certain realities when it comes to development — sharing some of his experience and wisdom.
Being Adaptable: An Expensive Lesson
The brothers have attempted to build clusters of in-fill housing to scale their business. But these projects were easier said than done.
“Rather than gaining economies of scale, the additional zoning and development burdens render the projects less profitable than the one-off houses and sometimes entirely unfeasible, Chris shared.
He offered a recent example: The Knoppes purchased an infill parcel that could accommodate three or four houses. The single parcel needed to be split into separate lots, and that ignited the need for zoning variances.
Six zoning meetings and four months later, they received approval for the required variances to split up the lots.
But that wasn’t the end of their hurdles.
Soon enough, the brothers learned the city would require them to install a new sewer main, along with a stormwater detention system—although neither would typically be required for building a one-off single-family home.
“After a couple more months of work we found out that those requirements increased our costs by six figures and made the entire project unfeasible,” he recalled. “If we were to build the four houses with the additional sewer and drainage requirements, we would lose money on the project.”
And just like that, nine months of planning had gone up in smoke. They had to shift and now are building only one larger house to make a small profit.
“It defies logic and restrains the housing supply, but it’s the reality of the current system,” he said. “In order to avoid the cost traps, we must learn from these unpleasant experiences and pursue projects that do not contain such pitfalls. But there are always unknowns and things keep changing, so you must remain adaptable.”
But that hasn’t been their most extreme challenge. That one has been people’s preconceived notions.
A False Narrative
“As a local business with employees who live and work in Columbus, we do our best to produce as many quality housing units as possible,” Chris Knoppe said. “There’s a constant narrative around ‘affordable housing’ and ‘greedy developers’ that seems to be fueled by a lack of understanding around the process and costs involved in building housing.”
Helping people understand this truth can be difficult, he revealed, because so many don’t realize that affordable housing isn’t possible without the builder or developer acquiring large government subsidies.
He offered an example:
A typical “affording housing” apartment building is the beneficiary of millions of dollars worth of subsidies to cover the costs of construction. Those dollars are often a mix of federal, state, and local funding sources.
And they all come from taxes, which means their capacity is limited.
“To obtain those subsidies, a developer must navigate a rigorous process and compete against other developers for the limited resources,” he said. “That model of subsidized development is not scalable or sustainable.”
A better solution for the housing shortage, according to Chris, is to build more units at all price points. That way, the overall supply of housing can be increased at a faster rate than what is currently being produced.
“There is hope that current city initiatives to make the zoning and development process less cumbersome will result in the production of more housing,” he said.
But Chris said he and his brothers understand there are even more growing pains. And it’s all thanks to Central Ohio being a wonderful place to live.
Stretching Things Thin
Chris believes the rest of the country is beginning to understand that Central Ohio offers an overall better quality of life, which has led to the growth.
“However, growth also brings challenges as the region tries to adapt and absorb the increased population and demand on resources,” he said. “From a developer’s perspective, the growth provides strong demand for housing, but it is also causing shortages and price increases for the labor and materials needed to build housing.”
Various groups have jumped on this problem. Suggested solutions include workforce training, modular housing, and 3D printing, he said.
But the number one issue for developers? Labor shortage.
“Beyond housing, large projects, such as the Intel chip fabrication plants, large technology data centers, OSU’s new Innovation District, the OSU Medical Center expansion and Children’s Hospital expansion projects, are all competing for regional construction resources,” he said.
Working Together to Grow Together
The past decade has seen an uptick in people seeking urban housing, Chris said. It’s quite the reversal from the consistent decline seen since 1950. The re-emerging popularity comes from factors like people wanting to live near employment centers and entertainment districts.
There is an opportunity to rebuild the housing stock in urban neighborhoods to meet the demand. But that means current residents need to make room for the others to settle in. On top of that, city leaders should accommodate the need for more housing, Chris suggested.
“Increased density can most efficiently accommodate growth as well as set the stage for improved transit options and more walkable amenities: restaurants, retail stores, grocery stores, and businesses that once flourished in every urban neighborhood,” he said.
Chris then shared the rub: Most people agree more housing is needed, but every new project faces some level of opposition.
“Change is never easy, but as a community, we can do a better job of working together to grow together,” he said.
And New City Homes is working on that growth.
Future Projects
Chris shared some exciting projects now in development within New City Homes. The first is the construction of four new single-family homes on North Monroe Avenue in the King-Lincoln / Bronzeville neighborhood, just North of Long Street near the King Arts Complex and Lincoln Theater.
Two of the houses are already finished, with one pending sale and the other newly available for purchase at the time of our interview with Chris. The others are slated to be completed this summer.
Another project is on North Yale Avenue in Franklinton. New City is currently finalizing plans to build six duplexes (a total of 12 units) that will be available for rent.
“Each duplex will contain a larger two-story unit that feels more like a single-family home with two bedrooms, two-and-a-half bathrooms, and a detached garage,” he said.
“The lower level is a separate unit that is a smaller efficiency apartment. This design provides
two different rental options to accommodate the varying needs of prospective residents,” he added.
New City also has homes for sale in the Near East and Southside.
“We are proud to now be playing a small role in continuing that positive momentum while providing housing options for current and future residents of Columbus,” he said.
If you would like more information about New City Homes, please visit newcityohio.com. This feature was brought to you with paid sponsorship of our Urban Living Tour event, which is an annual self-guided tour featuring living options in Columbus and surrounding neighborhoods, and we thank New City Homes for their support. Sign up for our email newsletters to be notified of other upcoming events!