INDIANAPOLIS, IN - A new report by Prosperity Indiana and the National Low Income Housing Coalition (NLIHC) finds that amid a staggering acceleration in the shortage of affordable housing, Indiana’s rates of affordable housing supply and severe housing cost burden for extremely low-income renters are some of the worst in the Midwest, and now worse than the national average, contrary to the common claim that Indiana is an affordable place to live. 

The report, The Gap: A Shortage of Affordable Homes finds a national shortage of 7.3 million affordable and available rental homes for extremely low-income renter households – those with incomes at or below the poverty level or 30% of their area median income (AMI), whichever is greater – resulting in just 33.89 (rounded to 34) affordable and available rental homes for every 100 extremely low-income renter households nationwide.   

The Gap: A Shortage of Affordable Homes also reveals that there are 209,710 extremely low-income households in Indiana (an increase of 10,660 since the 2023 report) but only 70,392 affordable and available rental homes available to them (a loss of 7,862 units). This leaves a gap of 139,318 affordable and available units (18,522 more missing units than in 2023) or only 33.57 (rounding up to 34) rental homes for every 100 extremely low-income households in the state.

View map here.

Analysis of The Gap data by Prosperity Indiana finds that, at approximately 34 units available for every 100 households in need, affordable and available rental homes for Extremely Low Income (ELI) households is not only now below the 2024 national average, but is a lower rate of attainable housing than states such as New York, Hawaii, or Massachusetts. Indiana’s rate of affordable and available housing for the most vulnerable renter households is also second-lowest in the Midwest, with only Nebraska being worse off at 32.50.   

Released annually, The Gap investigates the severe shortage of affordable rental homes available to extremely low-income families and individuals nationwide as well as in every state and metro area. While rents have stabilized since the pandemic in most markets – and even declined to a small degree in some markets – the supply of affordable rental housing for extremely low-income households remains deeply inadequate nationwide, including in Indiana. As a consequence, about 76% of extremely low-income Hoosier renters are severely housing cost-burdened, meaning that they spend more than 50% of their income on housing with little left over for food, healthcare, and other basic necessities.  

Prosperity Indiana’s analysis of The Gap data finds that at 75.65%, Indiana’s rate of severe housing cost burden for ELI renter households is not only higher than the national average (73.71%) but is 10^th-highest among all 50 states.  Indiana’s rate of severe housing cost burden is also the highest among any Midwest state.  

Aspen Clemons, Executive Director at Prosperity Indiana shares that “The proportion of older Hoosiers making up the state's ELI population has increased from 21% to 28% in two years, signaling that aging Hoosiers are becoming increasingly more vulnerable”. She continues, “In Indiana, 62% of Black households are renters and 23% are extremely low-income renters. 45% of Latino households are renters and 10% are extremely low-income renters. These disparities are the product of historical and ongoing injustices that have systematically disadvantaged Black and brown Hoosiers, often preventing them from owning a home and significantly limiting their ability to build wealth”.  

View chart here.

The report confirms what Indiana’s housing advocates have been saying for years: the state’s largest housing gaps and cost burdens are borne by the lowest-income Hoosier renters who make up some of the most vulnerable populations in the state. At 33%, the greatest proportion of ELI renter households are in the workforce, along with older Hoosiers at 28% (increasing from 26% in 2023 and 21% in 2022), disabled Hoosiers at 22%, students at 6%, caregivers at 4%, and other households at 7%.  

Of the plurality of Indiana’s ELI households who are in the labor force, over two-thirds of these Hoosiers are working more than part-time hours, with the greatest proportion (40%) working 40 hours or more per week and another 31% working between 20 and 39 hours per week. Another 15% work fewer than 20 hours per week and the remaining 14% are in the labor force but are jobless, looking for a job, and available for work. In summary, the largest segment of Indiana’s poorest renter households actively participates in the state’s labor force, with most working at more than part time status.  

The report also reveals that national and state rental markets provide an adequate supply of housing for middle-income renters but that neither the nation’s nor Indiana’s rental market provides enough homes for extremely low-income renters. Even in housing markets with shortages of affordable and available homes for middle-income renters, the cumulative shortage is largely attributable to the significant unmet housing needs of people with the lowest incomes, who must occupy higher-priced homes in the private market that would otherwise be available to higher-income renters.  

View chart here.

The Gap finds that the rate of affordable and available rental housing has decreased among all income levels – not just ELI households - in Indiana since last year, but the largest losses are concentrated at the bottom of the income spectrum. With a deficit of 139,318 units, Indiana’s widest housing gap is by far among Hoosiers earning below 30% AMI. When considered cumulatively along with those ELI households, the state’s Very Low Income households (those earning between 0-50% AMI) experience a smaller but still substantial gap of 102,853 affordable and available units. This equals a rate of 70 units for every 100 households earning below half of AMI statewide (down from 76 in 2023).   

However, The Gap data finds that at or below 80% Area Median Income, a population known as Low Income (LI), there is an absolute surplus of 3,735 affordable and available rental units in Indiana (down from 16,336 in 2023), equaling a rate of 101 units for every 100 of these LI households (down from 103 in 2023). And above the statewide median income there is an absolute surplus of 15, 711 affordable and available units (down from 39,223 in 2023), equaling a rate of 103 affordable and available units for ever 100 of these median income households (down from 105 in 2023).  

View chart here.

The burden of Indiana’s gap in affordable and available rental housing is disproportionately shouldered by Black and brown Hoosier households, as these households are more likely to be renters. They are also twice or more as likely as white households to be extremely low-income renters. For example, 62% of Black households are renters and 23% are extremely low-income renters. 45% of Latino households are renters and 10% are extremely low-income renters. By contrast, 24% of white households are renters and 6% are extremely low-income renters. These disparities are the product of historical and ongoing injustices that have systematically disadvantaged Hoosiers of color, often preventing them from owning a home and significantly limiting wealth accumulation. These disparities also mean that Indiana’s policy choices to not adequately target resources for developing, preserving, and enforcing the habitability standards of homes affordable for those at the lowest incomes disproportionately puts the health and economic burdens of substandard housing on Black and brown Hoosier renter households.  

View chart here.

Though Indiana is commonly thought of as an affordable place to live when it comes to the availability and cost of housing, this reputation does not bear out for the lowest-income Hoosiers who face housing shortages and high rates of housing cost burden. And while the Midwest is typically more affordable than heavily populated coastal areas, Indiana performs near the bottom of the region. In 2024, Indiana has the second-lowest rate of affordable and available housing for ELI households at 33.57% and far below the average of 39.63% for states in the region.

View table here.

Indiana’s rate of 75.65% of ELI households who experience severe housing cost burdens in 2024 is the highest of any Midwest state and above the regional average of 69.72%. Because severe housing cost burden is itself an indicator of housing instability, this means that more than three quarters of the most vulnerable Hoosier renter households are currently at risk of eviction and homelessness, along with the long-term health and economic damage these things bring.  

View table here.  

Additional data provided for The Gap 2024 Indiana state report using American Community Survey data finds that the gap in affordable and available housing and rates of severe housing cost burden are statewide and affect rural, urban, and suburban counties alike. Only one county (Union) shows an outlier data result with a small surplus of 25 units. All other Indiana counties show a deficit of affordable and available rental homes for ELI households, ranging from a gap of 40 in Crawford and LaGrange Counties to 37,420 in Marion County. 26 Indiana counties have rates of affordable and available rental homes per 100 ELI households that are below the national average. And 18 counties have rates of severe housing cost burden for ELI households above the national average. 

Find ‘the Gap’ of affordable and available rental homes and rates of severe housing cost burden for ELI households in all 92 Indiana counties at this link. 

View map here. 

“The findings from The Gap 2024 Indiana state report echo what Prosperity Indiana’s members and coalition partners have been seeing in the field, that Indiana is no longer an affordable place to live for the most vulnerable members of our communities,” said Andrew Bradley, Policy Director for Prosperity Indiana and NLIHC Board Member. “It is alarming to see Indiana’s rate of affordable housing and severe cost burden become worse than the national average and at or near worst in the Midwest. These findings should serve as a wake-up call to Indiana’s policymakers to not let the decline of the state’s housing supply, and the health and economic effects of that decline, serve as their legacy. Indiana’s elected officials should use this moment to work with Hoosiers at the front lines of the state’s housing safety, stability, and affordability crisis to dedicate resources to develop, preserve, and enforce the habitability standards of housing so that it is attainable for all Hoosiers,” Bradley said.  

“Even with a strong economy and stabilizing rents, homelessness has increased to its highest level ever recorded, and millions of the lowest-income and most marginalized households are at risk,” said NLIHC President and CEO Diane Yentel. “We know what works to end housing insecurity and homelessness – what we lack is the political will to invest in these solutions at the scale needed. More than ever, Congress should act quickly to enact bold legislation to ensure rental assistance is universally available, build and preserve homes affordable to people with the lowest incomes, create tools to prevent eviction and homelessness, and strengthen renter protections to keep renters stably housed.”  

Learn more about The Gap by visiting: https://nlihc.org/gap