Thank you Chairman Holdman and Members of the Interim Study Committee. My name is Andrew Bradley, and I am Policy Director for Prosperity Indiana. My testimony today is informed by a series of regional housing convenings we’ve been conducting this month with our statewide membership of community economic development organizations and housing providers, realtors, homelessness service organizations and legislators. We’re holding our last two tomorrow in Fishers and next Tuesday in Fort Wayne and I invite all of you to join what have been some very illuminating discussions.

Those regional discussions have uncovered new support for the evidence we’ve seen that Indiana has a pre-existing and intertwined housing affordability and stability crisis that has only been exacerbated by the pandemic and increasingly puts our state at a competitive disadvantage with our Midwestern peers when it comes to maintaining and growing our workforce. However, there are policy options and resources on the table that could close the gap and secure homes for future generations of Hoosiers.

The stakes for housing our workforce and overall population are clear. Brand new Census data show that Indiana’s population grew 4.7% from 2010 to 2020. But our housing stock only grew 4.6% during that time, with net losses in nearly half of Indiana’s counties, mostly the smallest and most rural parts of the state. We can’t sustain or grow Indiana without sustaining and growing safe, affordable, and stable homes for Hoosiers.

Although Indiana is a relatively affordable place to live for some, quality affordable housing is far out of reach for too many across our state, including for much of our workforce. In fact, data from the National Low Income Housing Coalition finds that Indiana has a gap of -126,952 affordable and available units for the bottom 30% of earners. Indiana has the second-lowest supply of affordable and available housing among all Midwest states for people at 30% or below of area median income, with only 37 units for every 100 households. This bottom 30% of earners are what’s known as ‘extremely low income households’ and are the same category that employers say they can’t fill jobs for – the restaurant and bar workers; hotel and hospitality workers; certified nursing assistants and all kinds of high-touch personal service jobs most likely to be held by the Black and brown Hoosiers, women, and Hoosiers with low educational attainment that were most affected by the pandemic. Without a stable foundation of housing they can afford, these Hoosiers won’t be able to compete for higher-level jobs.

At the same time, 72% of Indiana’s extremely low-income households are severely housing cost burdened, meaning they spend more than half of their income on housing. This is the second-higest rate in the Midwest, And in 2021, it takes a renter $16.57 an hour to afford a 2BR unit at the statewide fair market rent of $862/month, the average Hoosier renter earns $14.58 per hour. That average renter wage of $14.58 is increasingly out of step with the Midwest average of $15.35, a gap of $0.77 per hour or almost $1,600 less than neighbors across the region. Meanwhile, the median wage for 10 of Indiana’s top 20 occupations pays less than the housing wage for a 2BR at fair market rent – and 6 of those top 20 occupations pays less than what’s needed for 1BR.

That’s a competitive disadvantage.

During our regional convenings, stakeholders who work with these issues on the ground every day told us that when Hoosiers have fewer available options and have to put a greater proportion of of a smaller income towards housing than elsewhere in the Midwest, it means they’re forced to choose rent instead of medicine, childrens’ school supplies, or savings needed to buy a home or skill up to move up the career ladder. It also means that families may be forced to accept substandard housing and live in poor conditions that affect children’s health and learning outcomes, parent’s ability to gain and maintain a job, and the overall economic viability of the community.

What adds fuel to the fire is the current housing crisis brought on by COVID-19. Indiana has seen over 55,000 eviction filings during the pandemic, despite eviction moratoriums. Even before the pandemic, Indiana had an eviction rate of 4.07%, nearly double the national average, with three Indiana cities among the top 20 for highest eviction rates nationwide.

And while emergency rental assistance is now beginning to reach the landlords and renters who need it, even having that eviction filing can hang like a “Scarlet E” around a renter family’s neck, making it harder for them to obtain new housing, and leaving them more susceptible to the cycle of substandard housing that drains resources from families and communities. But unlike many criminal records, there is currently no way for renters to expunge that Scarlet E from their records, or even a right to access and correct errors in a tenant screening record.

At one convening this month, after hearing these stories from his community, one legislator remarked that “this housing issue is more complicated than rocket science”, but agreed that it’s necessary for communities to thrive and too important to neglect. However, the tools available to communities to keep their workforce stably housed has been reduced over the past few years, from preventing inclusive zoning to increase workforce housing, to disallowing communities from informing landlords and tenants of their legal rights.

Another stakeholder remarked that communities too often try to address housing issues thinking about the $300K-$500K homes, but too often don’t have a strategy for the lower income workforce that sees the most acute gaps. Perhaps the greatest benefit of this committee would be to provide a strategy for the state to align partners and resources to target available resources in the areas of greatest need, including:

• Using available policy levers to increase the supply of affordable, workforce housing by increasing state tax credit resources targeted for the development of housing for low-income households, and through robust land bank tools and resources.

• Creating a Housing Stability Task Force to to inform the use of federal housing recovery resources with input from housing providers, residents, and communities with on-the-ground experience of what works and what doesn’t.

• Assessing the effectiveness of current policies affecting housing affordability and stability with the input of those affected by them, and weeding out those that are outdated, lopsided, or counterproductive to housing Indiana’s future.

Thank you for your dedication to addressing and finding lasting solutions to this complex issue.

Sincerely,

Andrew Bradley

Policy Director, Prosperity Indiana