INDIANAPOLIS – Indiana’s rate of affordable and available rental homes for the most vulnerable renter households is now tied for lowest in the Midwest and is below the national average, according to a new report published by Prosperity Indiana and the National Low Income Housing Coalition (NLIHC).
The report, The Gap: A Shortage of Affordable Homes finds a national shortage of 7.2 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, whichever is greater - resulting in just 35 affordable and available rental homes for every 100 extremely low-income renter households nationwide. The report also reveals that there are 210,668 extremely low-income households in Indiana, and just 34 affordable and available rental homes for every 100 of these households in our state, leaving a gap of 137,138 units needed statewide. Indiana’s rate of affordable housing is now not only below the national average but is tied with Illinois for the lowest among all Midwest states. These findings come amidst ongoing attacks on federal housing resources and a lack of investments at the state level targeted at increasing housing supply for low- and moderate-income Hoosiers.
Released annually, The Gap investigates the affordability and availability of rental homes for households of different income levels nationwide and in every state and major metropolitan area. The supply of affordable rental housing for extremely low-income households remains deeply inadequate both nationally and in Indiana. As a result, 74% of extremely low-income Hoosier renters are severely housing cost-burdened, spending more than 50% of their income on housing, with little leftover for food, healthcare, and other basic necessities. Indiana’s rate of severe housing cost burden matches the U.S. average and is tied with Illinois for second highest in the Midwest, behind only Michigan.
The Gap in the supply of affordable housing in Indiana is concentrated at the lower end of the income distribution spectrum. The deficit of 137,138 rental homes for the state’s 210,668 extremely low-income renter households produces the lowest rate of affordable and available housing at only 34 affordable and available units for every 100 households. As incomes increase, so does the rate of affordable and available rental homes, with 64 units for every 100 households at or below 50% of area median income; 100 units for every 100 households those at or below 80% area median income; and 104 units for every 100 households at or below the state’s median income.
Affordability and the cost burden of rental housing in Indiana is also highly dependent on income. 74% of all extremely low-income Hoosier renter households are ‘severely cost burdened’, meaning they pay half or more of their income on housing costs, including rent and utilities. By contrast, very low-income households (those between 30-50% area median income) have a severe housing cost burden rate of 26%. Just 5% of low-income households (between 50-80% area median income), and only 1% of those between 80% and the state’s median income are severely cost burdened.
The private market, without subsidy, is unable to provide an adequate supply of housing affordable to the lowest-income renters. What extremely low-income renters can afford to pay for rent does not cover the development and operating costs of new housing, and it often is not sufficient to provide an incentive for landlords to maintain older housing. The result is a systemic shortage of affordable housing for extremely low-income renters impacting nearly every community, including those across Indiana. Subsidies are needed to produce new affordable housing, preserve existing affordable housing, or subsidize the difference between what the lowest-income renters can afford to pay and market rents.
“The findings from The Gap show that no state or major metropolitan area has an adequate supply of affordable and available homes for extremely low-income renters,” said NLIHC President and CEO Renee M. Willis, “It is a sad fact that only one in four households who qualify for housing assistance receive it. When renters are housing cost-burdened, they cannot afford to cover other basic necessities such as food, healthcare, transportation, or childcare. Congress has the solutions to increase housing affordability across the country. They must support robust housing assistance programs that can alleviate the housing crisis and ensure the wellbeing of millions of the lowest-income renters.”
Learn more about The Gap by visiting: https://nlihc.org/gap
Prosperity Indiana will release exclusive additional data and maps from ‘The Gap’ at the county, state legislative district, and Congressional district levels on Tuesday, March 17 at: https://www.prosperityindiana.org/
