Threats of evictions, foreclosures and homelessness magnify the state’s shortage of affordable housing and adds pressure to frontline organizations

by Shari Finnell, editor/writer, Not for Profit News

With renovations recently completed on a two-bedroom, 1-bathroom home in Martindale-Brightwood, a neighborhood on Indianapolis’ Eastside, another family has the opportunity to get closer to one of the most heralded symbols of the American Dream: home ownership.

The house located on Manlove Avenue was completely gutted before being furnished with quality finishes and appliances, said Steven Meyer, CEO of Renew Indianapolis, which rehabbed the house — one of 20 affordable housing projects it will rebuild or rehab near Douglass Park in the Martindale-Brightwood neighborhood during the next three years.

“Our philosophy around affordable housing is that you shouldn’t be able to tell the difference between one of these houses or any other house,” Meyer said. “Whoever ends up in this home will not have to face constant problems with maintenance.”

The Manlove Avenue house also is symbolic of the massive challenge Indianapolis, like many other cities, is facing in producing enough affordable housing to accommodate increasing demand. With the Centers for Disease Control and Prevention moratorium on evictions expiring on Aug. 1, 2021, Meyer and other nonprofit leaders and city officials fear that Indianapolis will face a potential eviction crisis.

“One of the most difficult challenges facing frontline organizations is that the moratorium is lifting for everyone at the same time,” said Aaron Laramore, senior program officer for the Local Initiatives Support Corporation (LISC) Indianapolis, an organization that collaborates with residents, organizations, businesses and government officials to revitalize urban communities.

“It’s going to put a lot of pressure on affordable housing demand in Indianapolis,” Laramore added. “How many people are going to be evicted by their landlord once the moratorium is lifted? It will likely be a significant number, which will present a significant challenge for every frontline organization providing emergency needs for people. It may not happen immediately, but the process will start.”

Meyer also said that foreclosures and evictions could make hard hit neighborhoods more vulnerable, as they did with the Great Recession, “The need for affordable housing — affordable housing preservation — is at its highest level ever,” Meyer said. “During the great recession, we saw the neighborhoods hardest hit lose 20 percent of their homeowners. Currently, new affordable housing programs can’t keep up with demand.”

According to recent statistics:

  • Rent for Indianapolis properties continues to rise. As of June 2021, the monthly average had climbed to $1,047 — up from $968 in January 2020, according to data compiled from Apartment List.
  • Indiana is one of 10 states where more than 20% of renters are behind on their payments, according to the State of the Nation’s Housing 2021 report, recently released by the Joint Center for Housing Studies of Harvard University. Also, 53 percent of renters reported losing income during the pandemic. Comparatively, 8.4 percent of Indiana homeowners were behind on their payments, and 36.2 percent reported losing income.
  • Home prices continue to climb, another factor that can keep lower-income households out of the real estate market. In Central Indiana, the average home price of $250,000 is — 14.2% higher than it was in June 2020, according to MIBOR.
  • For the general market alone, Indianapolis is lagging behind a demand for 9,000 housing units a year, according to a recent MIBOR report, which states that “the Indianapolis region is underbuilding each year by 1,750 units.”

Laramore also noted that lower income households were financially stressed because many of them spend significantly more than the federal standard of 30 percent for their housing. “Affordable housing is absolutely part of the way we will recover — affordable housing and home ownership are the wealth building tools for the average person,” he said.

According to the report Out of Reach, released earlier this month, more than 145,000 extremely low-income renters in Indiana already were spending more than half of their incomes on housing — before the pandemic. The report, which was jointly released by the National Low Income Housing Coalition and Prosperity Indiana, found that full-time Indiana employees would need to earn $18.19 an hour for a modest two-bedroom apartment in Indianapolis. However, the average renter in Indiana makes $14.58 an hour. 

In response to the report, Jessica Love, executive director for Prosperity Indiana, said, “The cost of housing in Indiana just keeps rising, which means the state Housing Wage – what you really need to earn for your home to be affordable to you – keeps going up. Unfortunately, the average renter’s wage hasn’t risen much for Hoosiers, especially when compared to our Midwestern peers. And this only serves to widen the disparities experienced by the lowest income renters.”

While a significant amount of dollars are being dedicated to housing stabilization during the current crisis, including the American Rescue Plan Act of 2021, long-term plans need to continue to focus on the evolving needs of low-income households, according to Laramore.

New construction also needs to recognize the needs of the changing American household. “The housing industry is built around the idea of a nuclear family, however that household type is no longer the most dominant,” Laramore said. “We have intergenerational households, single parents as head of the household. This changing demographic has different needs than the traditional nuclear family household. We need to pivot to align with what families look like now.”

Meyer said that recent developments are starting to reflect an awareness that different aspects of stabilization aren’t isolated. 

“Community development, in general, has acknowledged that different areas — affordable housing, economic development and supportive services — are all interrelated in a way that hasn’t happened in the past. We’re bringing all the resources people will need in a neighborhood to ensure they will have the most impact as possible.”