Good news.

The Plaza at Central Greens, a complex being built in Indianapolis, will offer 122 two- and three-bedroom units aimed at Indy families and individuals who make 60% less than the median income for the area. A family of four making less than $55,000, for example, is eligible not only for secure housing but also for resources such as recreational services, literacy and educational training, and career counseling. This is a huge win.

Developments like the Plaza at Central Greens are a step in the right direction. But, with a challenge as multifaceted and complex as achievable housing, one step in one direction is not enough. We need to rethink, and reframe, the entire conversation. It must encompass all of the nearly 2 million Indiana households that are currently priced out of the market.

The Indianapolis Metro Area Housing Shortage

We have a problem.

Prosperity Indiana, an advocacy organization dedicated to advancing fair housing for Hoosiers, puts it succinctly: “What’s clear is that Indiana can’t wait to simply build its way out of our affordable housing crisis – we need our lawmakers to increase access, habitability standards, and tenant protections alongside supply if we are to ensure every Hoosier has a safe, affordable place to live.”

All true, particularly the fact that we cannot wait to build our way out, but there is also the pressing issue of attainable housing. This is non-subsidized housing that is achievable for households with an income between 80-120% of the area’s median income (i.e., within reach for those earning $43,200 – $64,000). In other words, it is a realistic shot at homeownership for teachers, managers, retail and hospitality workers, nurses, law enforcement and first responders, tradespeople, small business owners, and others who want to live in the communities in which they work.

Currently, they simply cannot. There is a crushingly inadequate supply of housing in the Indianapolis metro area – and most households can’t afford to buy what is available. According to the Common Sense Institute’s Indianapolis Metropolitan Area Housing Affordability Report, the housing deficit (2022 figures) stands at between 18,852 and 61,238. To meet projected population growth in the next five years, and to close this gap, we need to build between 66,000 and 115,000 units. Most counties are not on pace. Not even close.

And even when they are… the elephant in the room blares his trumpet. Cost.

Elevated prices and interest rates have pushed home affordability in the Indy metro area to the lowest point in nearly 15 years. In the past 8 years, the cost of buying an average-priced home increased 61% – 88%, mostly within the last two years.

Hancock County, for example, is on track to close their deficit. According to CSI research, they need 4629 – 6404 housing permits to meet demand by 2028. In 2022, over 1350 permits were issued. CSI forecasts a surplus of 280 – 576 permitted housing units over the next five years. How exactly people will be able to afford these homes, though, is the big question. Since 2015, housing prices in the Indy metro area have surpassed the US average. In 2006, an average Hancock County home was around $150,000. By 2022, it was double that. Wage growth is not enough to allow most of Indiana’s population to make up that difference.

The Solution?

While the problem is clear (and staring us right in the face), the solutions are decidedly less so. The Indianapolis metro area housing shortage requires innovative, and multi-pronged, strategies. However, when we put our collective weight behind achievable housing, we work to effectively close the deficit, increase homeownership rates, build robust local economies, create vibrant and diverse communities, and shore up the local workforce by empowering them to live where they work.

And, of course, we start putting the American Dream back within reach of millions of Hoosiers who are currently struggling to grasp it – or even imagine it. Ready to lend a hand? Learn more at Build Indiana Roots.