SAVI Reports - Page 6

The Affordable Housing Market and Why it Matters Authors: John Marron, AICP; Timothy Gondola; Kirstin Oaldon Executive Summary Indianapolis is routinely recognized as one of the more affordable regional housing markets among major metropolitan areas throughout the nation. Forbes ranks the city high for home affordability for young professionals and Millennials. The cost of housing in the Indianapolis metropolitan area ranks 33rd among the 100 largest metropolitan areas. When housing costs are considered relative to household incomes, Central Indiana fares even better, ranking 23rd. It is this combination of affordable housing and relatively high wages that led Trulia, a national real estate research site, to name Indianapolis as the ‘dream city’ for Millennials. 1 At the same time, this relative affordability lies within the eye of the beholder. While Indianapolis measures among the more affordable of major metro areas, it fares relatively poorly in income inequality, ranking 64th among the 100 largest metros. In a study of upward intergenerational mobility, examining the likelihood of one’s children achieving wealth from an impoverished childhood, Indianapolis ranked 47th out of the 50 largest regions in the US. 2 To many low- and moderate-income households, the housing of their choice may be out reach. The regional housing market is embedded within the broader regional economy. While the growth of Central Indiana’s economy is generating additional opportunities, new wealth, and increasing incomes, it can also result in increased demand for housing units and limit housing opportunities for low- and moderate-income families. As demand increases in the homebuying and rental markets, new units (increased supply) take time to come into service and prices increase in the interim. These challenges are realized in both the home-buyer and the rental markets located in the core city and in the suburbs. Low- and moderate-income families with credit issues may find their access to suitable housing opportunities even further limited. Low- and moderate-income families may face the dual challenge of having trouble finding an adequate home while paying more for a home that does not fully meet their needs. 1 See coverage from Forbes (http://www.forbes.com/sites/erincarlyle/2016/03/28/americas-20-best-cities-foryoung-professionals-in-2016/#7190c5497f2b), Bloomberg (http://www.bloomberg.com/news/articles/2015-0608/these-are-the-13-cities-where-millennials-can-t-afford-a-home), and coverage of the Trulia report (http://www.nbcnews.com/business/consumer/millennials-meet-indianapolis-your-new-dream-city-n623021) 2 Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States. (http://www.equality-of-opportunity.org/images/mobility_geo.pdf) 2