FOR IMMEDIATE RELEASE

June 4, 2021

Contact: Jessica Fraser, Indiana Institute for Working Families, jfraser@incap.org; Jan Kruse, National Consumer Law Center, jkruse@nclc.org

New 50-State Survey Finds Losses for Indiana Consumers in Larger, Longer High-Cost Predatory Loans

INDIANAPOLIS – A high-cost predatory loan is only made worse when the loan is larger and longer. But while residents in some states are gaining protections from these larger, longer-term products, Hoosiers are now paying more than before the COVID-19 crisis, according to a new report from the National Consumer Law Center. This report builds on NCLC’s extensive work on predatory lending.

“The Institute and Prosperity Indiana have been working to educate policymakers and the public about how harmful these high-cost loans are to financially vulnerable Hoosiers. This research will help us advance the 36 percent rate cap Hoosiers desperately need,” said Jessica Fraser, Director of the Indiana Institute for Working Families.

“This new report shows how Indiana stacks up against other states when it comes to rate caps, and it’s not pretty. Despite Hoosiers asking for more responsible lending policies, the state allows some of the highest rate caps in the Midwest. This is now pitting Hoosiers who are working to recover from the COVID-19 pandemic against the growing predatory lending industry – a result of policies that have been moving in the wrong direction for years,” said Jessica Love, Executive Director of Prosperity Indiana.

In 2020, Indiana enacted a law (SEA 395) that increases the already excessive fees that lenders can charge and distorts the interest rate. The result is that non-bank lenders in the state can now charge an APR of 89 percent for a $500 six-month loan, an increase from 71 percent. For a two-year, $2,000 loan, the increased fee pushes the APR cap up from 39 percent to 40 percent.

Source: National Consumer Law Center, State Rate Caps for $500 and $2,000 Loans, March 2021

“Since the pandemic, Indiana has failed to assist struggling families by decreasing rates on consumer loans and instead welcomed predatory lenders by increasing already excessive fees,” said National Consumer Law Center Deputy Director Carolyn Carter, author of the report. “To avoid trapping residents in long-term debt, we encourage a 36 percent interest rate, including all fees.”

Key Recommendations

• Cap APRs at 36 percent for smaller loans, such as those of $1,000 or less, with lower rates for larger loans.

• Prohibit loan fees or strictly limit them to prevent fees from being used to undermine the interest rate cap and acting as an incentive for loan flipping.

• Prevent loopholes for open-end credit. Rate caps on installment loans will be ineffective if lenders can evade them through open-end lines of credit with low interest rates but high fees.

• Ban the sale of credit insurance and other add-on products, which primarily benefit the lender and increase the cost of credit, or require their cost to be included in the APR cap, as the Military Lending Act does for loans made to servicemembers.

• Examine consumer lending bills carefully. Predatory lenders often propose bills that obscure the true interest rate. For example, they may present a rate as being 24 percent per year plus 7/10ths of a percent per day, instead of acknowledging the rate as being 279 percent. Or the bill may list the per-month rate rather than the annual rate. To protect consumers, legislators should get a calculation of the full APR, including all interest, all fees, and all other charges, and reject the bill if it is over 36 percent.

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About the Indiana Institute for Working Families

The Indiana Institute for Working Families promotes public policies to help Hoosier families achieve financial well-being. We value, gather, and translate quantitative and qualitative data to communicate the opportunities and challenges that Hoosiers experience. We advance well-being by promoting evidence-based solutions and building coalitions to engage in direct and strategic conversations with policymakers and the public.

About the National Consumer Law Center

Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has worked for consumer justice and economic security for low-income and other disadvantaged people in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.

About Prosperity Indiana

Indiana Association for Community Economic Development d/b/a Prosperity Indiana builds a better future for our communities by providing advocacy, leveraging resources and engaging an empowered network of members to create inclusive opportunities that build assets and improve lives. Since its founding in 1986, Prosperity Indiana has grown to nearly 200 members from the public, private and nonprofit sectors.

Prosperity Indiana is pleased to co-release with the Indiana Institute for Working Families and Indiana Youth Institute, Policy Brief: A Year in Review: Housing Instability Trends for Hoosier Families and Counties Most Affected by COVID-19. The ongoing COVID-19 pandemic has exacerbated a pre-existing housing stability crisis in Indiana, with effects particularly concentrated among renter households, families with children, Black and brown Hoosiers, and low-income households. Throughout the first year of the pandemic, these Hoosier households were most likely to be affected by job and income loss and least likely to be able to stay current on housing payments. Therefore, they were most at risk of eviction or foreclosure.

After a year of economic disruptions, Indiana has experienced over 41,000 eviction filings at an average rate of over 750 per week, despite two eviction moratoria and two rounds of federally-funded emergency rental assistance. With the addition of a new state law that increases eviction powers and reduces local control over landlord-tenant relations, nearly one third of the state’s counties are now above pre-pandemic eviction filing rates, with the highest increases concentrated in Indiana’s smaller and more rural counties.

The report considers data from the weekly U.S. Census Household Pulse Survey, Federal Reserve Bank of Atlanta’s Unemployment Claims Monitor, and EvictionLab’s Eviction Tracking System to analyze the economic and social demographics and geographies of COVID-19 housing instability. Recognizing the significant federal resources becoming available to address COVID-related housing instability for renters concurrently with state and federal law and policies making eviction an increasingly available option for landlords, the brief also provides policy recommendations designed to inform Indiana’s state and federal policymakers regarding measures needed to rebuild housing stability and move towards long-term housing security.

Read the Joint Policy Brief

Additionally, Prosperity Indiana published “Indiana’s Emergency Rental Assistance: Program Outlines and Recommendations for Equitable Outcomes.” Currently, there are seven emergency rental assistance programs across Indiana, including six local programs and one statewide program that serves Hoosiers that are not covered by the local programs. This overview reviews the requirements of each program and includes recommendations on maximizing the equity and efficiency of ERA programs.

Read about Indiana’s Emergency Rental Assistance Programs

At the end of a session like no other before it, the Indiana General Assembly largely demonstrated that it was not focused on ensuring basic needs for Hoosiers nor protecting resources for the community economic development sector and the communities it serves. A notable “bright spot” included winning a measure of housing protections for renters, instead of seeing a whole-cloth reversal of the governor’s 2020 veto of the “evictions bill” with no correcting trailer bill. However, due to the combination of advocacy efforts of Prosperity Indiana’s members and investments in recovery from the federal government, there is reason to be optimistic for the future of community development in Indiana for the remainder of 2021 and beyond.

As a benchmark for the review of the session found below, please refer back to Prosperity Indiana’s 2021 policy agenda, A Blueprint for Equitable Response, Recovery, and Rebuilding in Indiana. This agenda was developed in consultation with PI’s Board after a series of virtual regional member meetings with lawmakers to communicate the immediate and long-term needs of Hoosiers and their communities. PI’s members wanted policymakers to know that “in order to respond, recover, and rebuild from COVID-19, we must first have equitable policies that take care of the most vulnerable Hoosiers and their communities”. So with the directive to advocate for racial equity across all state and federal COVID-19 response and recovery policies, members urged policymakers to focus above all on these three priorities:

• Provide adequate housing stability resources so that no Hoosier is evicted, foreclosed upon, or made homeless due to the pandemic.
• Increase Hoosiers’ consumer protections, guarding against predatory lending and increasing financial assets and opportunities at a time of great economic upheaval.
• Protect resources for community economic development organizations in budget decisions to ensure vital services for the organizations on the front lines of the pandemic.

So, how did the Indiana General Assembly deliver on these priorities during this session? Let’s take a look.

End-of-Session Update

On Thursday, April 22, the Indiana General Assembly departed the Statehouse for what observers are calling ‘Spring Adjournment’ rather than the typical term of adjourning Sine Die, an indication of the impact of the ongoing COVID-19 pandemic on the structure and content of the session. For much of the session, the public was not able to testify in person in the same room as committee members, large gatherings were not possible under safety precautions, and the typical interaction between legislators, constituents, and advocates was greatly disrupted. To ensure our members’ voices were heard, Prosperity Indiana conducted our first-ever virtual ‘Statehouse Week’ and mid-session update, in addition to action alerts, virtual press conferences, outdoor rallies, and presenting testimony on video to committees. The progress we made on our priority bills would not have been possible without the countless e-mails, phone calls, and sign-ons from members and partners throughout the state.

PI-sponsored legislation and high-priority bills:

SEA148 Override of Governor’s Veto (Sen. Blake Doriot) / HB1541 Landlord-Tenant Relations (Rep. Ethan Manning)

Despite those hundreds of calls, emails, and signatures, the General Assembly overrode Governor Holcomb’s veto of SEA148 on February 17, 2021. This made the law’s provisions, including the broad preemption of local ordinances affecting all aspects of the landlord-tenant relationship, effective immediately. However, we are grateful that legislators listened to the calls from PI and our partners in the Hoosier Housing Needs Coalition urging them to make improvements to the new law in ‘trailer bill’ HB1541. In its final form, HB1541 eliminates the provision of SEA148 allowing a landlord to ‘contract around’ anti-retaliation guarantees for tenants. Because form leases are generally ‘take it or leave it’ and are not up for negotiation, adding a provision to SEA 148 via HB 1541 that says the anti-retaliation language cannot be waived in any instance was necessary. Now, even by signing a written contract, residents cannot be stripped of their legally-protected rights against retaliation via a waiver clause. In addition, HB 1541 removes the broad provision in SEA 148 that nullified and preempted local ordinances that address “all other aspects of the landlord-tenant relationship” beyond those named in the law.

Even so, despite our testimony in House and Senate committees, HB1541 left several dangerous provisions of SEA148 in place, including seven new forms of ‘emergency possession’ that effectively allow expedited three-day evictions, including instances when the tenant is not at fault, as well as other loopholes in retaliation protections. HB1541 passed 96-0 in the House and 49-0 in the Senate, indicating unanimous support for fixing the problems in SEA148, even in limited form. See the Hoosier Housing Needs Coalition press release here.

HB1001 State Budget (Rep. Tim Brown)

The budget bill included $500 million for the renamed Regional Economic Acceleration and Development Initiative (READI), a program meant to fuel regional collaborations with opportunities for PI’s community economic development membership. However, despite a late revenue forecast that is $2 billion above previous projections, the budget bill decreased annual appropriations for the state’s Individual Development Account (IDA) programs from $874,645 in FY19-21 to $609,945 in FY21-23. The final version of HB1001 passed 96-2 in the House and 46-3 in the Senate.

SB214 Low-Income Housing (Sen. Travis Holdman)

PI testified in support of an early version of this bill, which in its final form reinstates provisions regarding eligibility for the property tax exemption for improvements on real property that are constructed, rehabilitated, or acquired for the purpose of providing low-income housing. The final bill also provides that payments in lieu of taxes (PILOTS) may be allowed from a property owner claiming such an exemption. The final vote on the bill in the House was 48-0 in the Senate and 94-0 in the House.

SB236 Land Banks (Sen. Tim Lanane)

SB236 would have increased the capacity of Indiana’s local land banks and increased the stock of affordable and available housing throughout the state. The bill would have allowed a county fiscal body to adopt an ordinance that requires 50% of the amount of property taxes paid on the tract to be transferred to the land bank, for the five years after a tract is purchased from the land bank. In addition, under SB236 a county executive would provide a land bank with a list of tracts that are delinquent on property taxes and have been offered for public sale at least twice and remain unsold; it would also permit the county executive to transfer its interest in a tract on the list to a land bank, if requested by the land bank no later than 30 days after it receives the list. PI testified in support of this bill, along with members and land bank supporters from across the state. Despite bipartisan authors, including the chairs of the House and Senate Local Government Committee where SB236 passed unanimously, the bill died after failing to be voted out of the House Ways and Means Committee.

HB1219 Various Housing Matters (Rep. Ed Clere)

Prosperity Indiana and our partners in the Hoosier Housing Needs Coalition worked with author Rep. Clere and co-authors of HB1219 to include provisions that would increase housing stability for at-risk Hoosiers during the COVID-19 pandemic and help those who’d fallen through the cracks to regain housing. These provisions would have created an eviction expungement process allowing tenants to expunge certain evictions from their court records; create a right for tenants to see their tenant screening records, if denied housing, to remedy and/or rectify inaccurate information; and create problem-solving housing courts to test effective remedies for tenants and landlords. Despite bipartisan authorship and support, the bill was not granted a hearing in the House Judiciary Committee.

HB1530 Housing Stability Task Force and Eviction Data (Rep. Sue Errington)

Rep. Errington’s HB1530 addressed two more housing stability priorities of PI and the Hoosier Housing Needs Coalition. The bill would have created a task force composed of landlords, tenants, public health experts, state officials, and other stakeholders to identify solutions to prevent evictions and foreclosures. The bill also would have required the state to include eviction and foreclosure data, as well as outcomes from Indiana’s housing stability efforts, on the state housing stability website. Despite bipartisan authorship and support, the bill was not granted a hearing in the House Government and Regulatory Reform Committee.

SB184 Small Loan Finance Charges (Sen. Greg Walker)

Supported by PI and partners in the Indiana Assets and Opportunities Network, Sen. Greg Walker’s SB184 would have capped payday loans at 36% APR. Despite bipartisan authorship and support, the bill was not granted a hearing in the Senate Insurance and Financial Institutions Committee.

The full list of bills that PI tracked this session across several issue categories, including all actions taken and final outcomes:

• Housing Legislation
• Asset-Building and Consumer Protection Legislation
• Economic Development Legislation

Although progress made for community economic development was limited this session, Prosperity Indiana thanks the General Assembly for those steps that were taken and thanks Governor Holcomb for signing them into law. Prosperity Indiana will continue working on the federal and administrative priorities of our 2021 policy agenda. Millions of federal dollars are coming to Indiana for relief, recovery, and rebuilding, including $448 million already available for seven Emergency Rental Assistance programs across the state and $168 million for the new Homeowner Assistance Fund from the American Rescue Plan act. Prosperity Indiana will continue to advocate and work with members and partners to ensure these funds reach the hardest-hit Hoosiers and communities throughout Indiana.

FOR IMMEDIATE RELEASE

March 18, 2021

CONTACT: Andrew Bradley, Policy Director, Prosperity Indiana, abradley@prosperityindiana.org

The Gap: A Shortage of Affordable Homes, a new report released today by the National Low Income Housing Coalition (NLIHC) and Prosperity Indiana, finds a national shortage of nearly seven million affordable and available rental homes for extremely low-income (ELI) renter households, those with incomes at or below the poverty level or 30 percent of their area median income. There are just 37 affordable and available rental homes for every 100 ELI renter households nationwide. Seventy percent of the poorest renter households are severely housing cost-burdened, spending more than half of their incomes on housing, with little left over for other basic necessities. The report shows that, even before COVID-19 devastated many low-income households, they were already struggling to afford their rent. Every year, The Gap reports on the severe shortage of affordable rental homes available to extremely low-income families and individuals.

“While Indiana likes to tout being an affordable place to live, I think two questions need to be asked: for whom and compared to what? In looking at the data, what we see is how Indiana continues to fail our lowest-income renters, especially when compared to our peers. Only one Midwest state is less affordable than Indiana,” said Jessica Love, executive director of Prosperity Indiana.

In Indiana, only 75,219 affordable rental homes are available for the 202,171 extremely low-income Hoosier households. That means there are only 37 affordable and available rental homes for every 100 households with extremely low incomes, tied for the second-lowest rate among 12 Midwest states. Approximately 72 percent of Hoosier renters with extremely low incomes are severely cost burdened and at risk of homelessness, which is the second-highest rate in the Midwest.

According to NLIHC and Prosperity Indiana, without public subsidies, the private market does not provide an adequate supply of rental housing affordable to low-income households. Both groups note that, even if rents fall during an economic downturn, they will not fall sufficiently to provide extremely low-income renters with an adequate supply of affordable housing. They say a downturn often leads to property owners abandoning rental housing or converting it to other uses when rental income is too low to cover basic operating costs and maintenance, making the housing affordability crisis worse.

Love said, “What this new data says about Hoosiers is that our most vulnerable families remain at risk of housing instability, which impacts job stability, and now also public health, and threatens the state's economic recovery. We need our Congressional delegation to step up as champions for policies that help these Hoosiers experience housing affordability, not just short-term housing stability as part of an immediate rescue plan, but looking beyond the pandemic to real and lasting solutions.”

Both NLIHC and Prosperity Indiana advocate for increased production and preservation of affordable rental housing, an increase in rental assistance resources for lowest income households, a stabilization fund to prevent evictions, and stronger legal protections for renters.

 For additional information, visit: https://nlihc.org/gap

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About Prosperity Indiana

The Indiana Association for Community Economic Development d/b/a Prosperity Indiana builds a better future for our communities by providing advocacy, leveraging resources, and engaging an empowered network of members to create inclusive opportunities that build assets and improve lives. Since its founding in 1986, Prosperity Indiana has grown to nearly 200 members from the public, private, and nonprofit sectors.

By Natalie James, Coalition Builder

On Wednesday, March 10, 2021, Jacob Sipe, Executive Director of the Indiana Housing and Community Development Authority, announced that the State of Indiana’s portal for emergency rental and utility assistance is now open at IndianaHousingNow.org. The Indiana Emergency Rental Assistance program (IERA) will provide rent and utility assistance to eligible Hoosier families using $372 million of $448 million allocated to Indiana from Congressional COVID-19 relief passed by Congress in December 2020. The remaining $76 million will be administered by six city and county-based programs (see below).

One of the biggest questions is: who qualifies for rental assistance from the IERA? An eligible household under the IERA as defined by the U.S. Treasury includes renter households in which one or more people: qualifies for unemployment or has experienced a reduction in household income, incurred significant costs, or experienced a financial hardship due to COVID-19; demonstrates a risk of experiencing homelessness or housing instability; has a household income at or below 80% of area median income (two-person household: $46,250; four-person household: $57,850; six-person household: $67,100).

This program is designed to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic. Eligible renter households can receive up to 12 months of rental assistance and utility/home energy assistance. This includes a combination of past due rent incurred since April 1, 2020, and future months of rental assistance. The person filling out the application will be considered the head of household.

Utility assistance is also available for those eligible for the IERA program. As long as the utility is in the name of one of the tenants listed on the lease and the utility is not paid as part of the monthly rental payment, the applicant may receive utility assistance. Internet assistance is also available, with additional eligibility requirements outlined in the application.

Renters, housing providers, and community-based organizations can find more information at IndianaHousingNow.org in English and Spanish, including application materials, frequently asked questions, and assistance examples. The site also links to other resources for foreclosure prevention and consumer protection, home repair or modification, senior housing, housing for persons with disabilities, shelters, and fair housing.

Renter applicants must meet all of the above requirements in order to be considered for rental assistance. While landlord participation is not required in order for a renter to receive assistance, IHCDA will attempt to work with landlords to verify amounts due and to issue payments. For more information, visit the application portal. For assistance submitting the application call 211.

In addition to IERA, six Indiana cities and counties have received funding and will administer separate programs. These six areas include Elkhart County, Marion County, Hamilton County, St. Joseph County, City of Fort Wayne, and Lake County. Renter households living in these six areas MUST apply through their LOCAL PROGRAM and are NOT ELIGIBLE to apply for the IERA program administered by IHCDA.

Need assistance?

• State of Indiana: IndianaHousingNow.org or call 211

• Elkhart County: www.elkhartcounty.com/rentalassistance

• Marion County: www.indyrent.org 

• Hamilton County: www.HCTAIndiana.com 

• St. Joseph County: www.sjcindiana.com

• City of Fort Wayne: www.fwcares.org 

• Lake County: www.LakeCountyIN.care

The state program, through IHCDA, will cover all areas in the state that do not have a local government receiving separate funds to distribute rental assistance.

Prosperity Indiana submitted comments on Indiana's 2022 Draft Qualified Allocation Plan (QAP). In the comments, we expressed appreciation for the complex task of balancing our state’s substantial affordable housing needs in setting the priorities through the QAP. To inform our response, Prosperity Indiana consulted our membership, inviting members to attend the virtual hearing for this draft plan and to provide feedback through an online member meeting and over email. PI's comments represent the feedback we received from our membership of community development practitioners.

We appreciate that the current draft 2022 QAP addresses some of the preferences and concerns expressed by our membership regarding prior plans. This includes recurring feedback that there were so many set-asides, too few credits were awarded under critical categories, meaning high scoring projects were not funded. In the past, we have recommended eliminating, combining, or reducing points for some of the categories, which has been acknowledged by the elimination of the Stellar and Workforce Housing categories.

We also appreciate the circumstances of this one-year plan being drafted as IHCDA also grapples with the housing and community development needs brought on by an ongoing pandemic. Many of our members are on the front lines of COVID-19 response and recovery, and some who would typically be active in this process are preoccupied by ensuring basic needs are met in their communities. Given that, we affirm holding off on multi-year planning efforts when an issue with longer-term ramifications can be addressed at a later time.

Throughout this process, some clear themes emerged regarding the current QAP, even though our membership and the populations and geographies served are diverse. Far and away, we received the most feedback on the proposed penalty for filing for a qualified contract release. In the interest of partnership and working towards shared community development goals, we are providing those themes – as well as some of the more technical suggestions – from member responses to address concerns from members as you continue work on the 2022 QAP draft. These responses are not necessarily presented verbatim but represent the spectrum of perspectives we received.

Please click here to see PI's full comments on the draft 2022 QAP.

FOR IMMEDIATE RELEASE

February 17, 2021

CONTACT:  Andrew Bradley | (317) 222-1221 x403| abradley@prosperityindiana.org

Housing coalition: General Assembly leadership must bring solutions to the table to fix newly-enacted SEA 148

INDIANAPOLIS – The Hoosier Housing Needs Coalition is disappointed that the General Assembly has completed the override of Governor Holcomb’s veto of SEA 148 without input from stakeholders who advocate on behalf of the 30% of Hoosiers who rent their homes and without a plan to mitigate the immediate and long-term damage it will create. The Coalition urges the General Assembly to use its remaining time this session to implement common-sense solutions that have been left out of the discussion to date.

Throughout SEA 148’s 11-month ordeal, the process for creating language that would affect approximately 2 million renters was never open to their contributions. No stakeholders that represent the interests of tenants or their communities was allowed to be party to the original language of SEA 148 or the two ‘trailer bills’ which, despite claims to the contrary, leave the new law overly broad and unbalanced in scope and now made law at exactly the wrong time.

In the short term, SEA 148 becomes effective immediately and will allow seven new forms of expedited evictions in the middle of a glacial winter and an ongoing deadly pandemic. SEA 148 specifies that landlords may now use emergency possessory actions (evicting tenants in three days), not just for destroying property. In fact, reporting code violations is now a legitimate reason for a three-day eviction.

We now know that every new eviction spreads COVID-19 wherever it happens: in rural, suburban, or urban communities, wherever evicted families are forced to double up in others’ homes or sleep in overburdened congregate housing like homeless shelters. And due to holes in the CDC’s eviction moratorium, 900 Hoosier households are already being evicted each week.

In the long term, SEA 148 locks the full state into the lowest common denominator of housing standards and tenant protections. Starting today, the new law voids substantial portions of local ordinances enacted to reduce evictions, promote housing stability, and enable better enforcement of housing codes to improve housing conditions. It also replaces local anti-retaliation ordinances and codifies loopholes in anti-retaliation protections.

In addition to these damages to Hoosiers’ public health and tenant rights, the Coalition agrees with the 65 Indiana business and community leaders who wrote “overriding the governor’s veto of legislation overturning local ordinances on renter-landlord relations [undermines] reasonable housing close to employment centers [and keeps] more residents away from work and living in poverty." With SEA 148 taking away tenant protections and employment opportunities throughout Indiana, it is our local economies and service providers who will bear the brunt, decreasing from their capacity to help Indiana recover from the pandemic and rebuild economic growth.

To remedy the negative impacts that will be felt by Hoosier renters as a result of this law, the Hoosier Housing Needs Coalition has developed a list of simple fixes that would address flaws in the new law regarding expedited evictions and loopholes in retaliatory protections and would allow those who slip through the cracks to regain stable housing.

“It is now on the General Assembly to address these issues before the end of this legislative session,” said Jessica Love, executive director of Prosperity Indiana and HHNC member.

“We are prepared to offer our recommendations for a more balanced law. The solutions are at the ready. Now it’s time to see leadership bring those solutions to the table.”

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About the Hoosier Housing Needs Coalition:

Hoosier Housing Needs Coalition (HHNC) was formed by members of Indiana’s housing security advocacy community in April 2020 to support advocacy and education related to housing and homelessness prevention in response to the COVID-19 pandemic. Staffed by Prosperity Indiana through advocacy and coalition building grants from the National Low Income Housing Coalition and the Central Indiana Community Foundation, HHNC convenes partners from across Indiana to advocate for immediate, medium- and long-term housing stability policy solutions and conduct education and research to achieve federal, state, and local policies for an equitable response and recovery to the pandemic and beyond.

The HHNC Steering Committee is comprised of members from AARP Indiana, the Coalition for Homelessness Intervention & Prevention (CHIP), Fair Housing Center of Central Indiana, Family Promise of Greater Indianapolis, Indiana Coalition Against Domestic Violence, Indiana Institute for Working Families – INCAA, Prosperity Indiana, and The Ross Foundation.

Prosperity Indiana submitted comments regarding the Federal Reserve Board’s (Fed) Advance Notice of Proposed Rulemaking (ANPR) on the Community Reinvestment Act (CRA). We believe the Fed’s approach is a good first step to improve upon the current CRA exam, in contrast to the Office of Comptroller’s final rule. However, we join our state and national partners in calling for more rigor in performance measures in order to ensure that CRA ratings will not be as inflated as they are today. More rigor is key to ensuring that CRA exams leverage more lending, investing and services for communities of color and low- and moderate-income (LMI) communities.

Prosperity Indiana is a network of nearly 200 organizations and individuals committed to advancing community economic development statewide. The focus of our efforts is to ensure everyone can enjoy equal economic and social opportunities and live in thriving communities. In carrying out this work, we know how critical CRA is to ensuring that areas and/or projects that would not otherwise receive investment can secure critical capital from banks through loans and investments for affordable housing and economic development. These investments and credit services spark neighborhood revitalization and help more Hoosiers achieve and maintain economic success.

Increased intentionality around meeting the purposes of CRA is critical, in light of the disproportionate impact COVID-19 has had on people on color and LMI households and those that serve them. Prosperity Indiana offers these comments as the cross-sector intermediary for organizations dedicated to community economic development, which means our members are the people and organizations on the front lines fighting COVID-19. Our members and the populations and communities they serve statewide have borne the brunt of the pandemic, resulting in stresses on capacity and finances. Three-quarters of our members report having six months or less cash reserve on hand; and the great majority have been forced to cancel programs or events and experienced disrupted services, even while seeing an increased demand for services and assistance. In May 2020, 82% anticipated a future decrease in revenue, and 94% anticipated a moderate to high impact on their programs, services, and general operation.

And while many of our nearly 200 members are deeply engaged in the community economic development work affected by the CRA and the proposed changes in the ANPR, few have the capacity during the ongoing emergency of COVID-19 to respond to the 99 questions involved. In order for our members to continue to respond, recover, and rebuild from COVID-19, they need a robust CRA that does not hinder services to communities of color and low- and moderate-income communities.

What’s at stake in Indiana?

Every community has a stake in strengthening the CRA, from Indiana’s small towns to growing suburban areas to the core urban areas. This is true from Angola, which saw $130.3 million in mortgages or loans to LMI borrowers or neighborhoods from 2009 through 2018, $0 in business loans to LMI neighborhoods, and $97.2 million in loans to small businesses, to Warsaw with $277 million in mortgages to LMI borrowers or neighborhoods, $36.1 million in business loans to LMI neighborhoods, and $271.4 million in loans to small businesses. And in our state’s largest metro area of Indianapolis-Carmel-Anderson, which itself spans a large city, a wealthy suburb, and a former industrial center now facing challenges, mortgages to LMI borrowers or neighborhoods totaled $14.2 billion from 2009 through 2018, with $3.9 billion in business loans to LMI neighborhoods, and nearly $4 billion in loans to small business. Indiana’s communities from smallest to largest can’t risk a weakening of the CRA that would allow an increase in discrimination in lending.

Strengthening CRA is a critical component of a just recovery

Indiana communities who have been hardest-hit and are still battling the public health, economic, and housing impacts of COVID-19 are the same who carry the scars of redlining. The National Community Reinvestment Coalition (NCRC) recently released a major report finding significant correlations between redlining and susceptibility to COVID, including Evansville, Fort Wayne, Indianapolis, Gary and Lake County, Muncie, South Bend, and Terre Haute. In the 1930s, the Home Owners Loan Corporation (HOLC) commissioned the production of maps that rated neighborhoods based on the risk of lending in them. Working class and minority neighborhoods usually received the riskiest designation of hazardous. The designations subsequently facilitated redlining and discrimination against these neighborhoods, which remain starved of credit and are predominantly lower-income and minority. These neighborhoods also have the highest incidence of health conditions such as asthma, diabetes, kidney disease and stroke, which make residents more susceptible to COVID-19. Life expectancy is almost four years lower in the redlined communities than the neighborhoods not designated as hazardous by HOLC.

In Indiana, the pandemic has disproportionately affected communities of color in additional ways. For example, according to the Federal Reserve Bank of Atlanta’s Unemployment Claims Monitor, Black Hoosiers have filed one in five unemployment insurance claims throughout the pandemic, although they make up only 9.4% of the labor force, according to 2019 data.

While we have not seen state-level data about Indiana’s Black-owned businesses, reports from the experiences of our members throughout the state align with nationwide trends showing a disproportionate impact on these businesses. Since the start of the pandemic, more than 440,000 African American businesses (41%) have been closed nationwide, compared to just 17% of White-owned small businesses. Discrimination in lending contributes significantly to racial disparities in small business survival rates. An NCRC investigation found that African American testers applying for Paycheck Protection Program (PPP) loans for their small businesses during the pandemic were likely to receive less information or encouragement to apply than White testers. We do not need state-level data to confirm the impact, and we cannot afford to see the CRA watered down in the meantime. CRA must be strengthened considerably in order to combat discrimination and help our communities recover from the pandemic.

Read Prosperity Indiana's full comments to the Fed's ANPR on the CRA.

By Laura Berry and Andrew Bradley

On October 13, Indiana reopened its Rental Assistance Portal for the first time since closing on August 26. While the Hoosier Housing Needs Coalition applauds this needed step, the restrictions now attached to the portal funds will likely mean that very few of the nearly quarter million Hoosier households at threat of eviction will be helped. The Coalition renews its calls for Governor Holcomb to create a coordinated COVID-19 Housing Stability Policy Plan and leverage some of over $1 billion in CARES Act funds still sitting on the table to ensure no Hoosier is evicted or made homeless due to the pandemic.

Read the entire blog post here.

Prosperity Indiana has submitted comments to the Indiana Housing & Community Development Authority on proposed use of Emergency Solutions Grant (ESG) Round 2 from the CARES Act. The letter states "[i]n large part, our comments today do not object to the proposed new activities in the amendment, but instead demonstrate our concern about the continuing missed opportunities of the State of Indiana not providing a coordinated COVID-19 housing stability policy response that aligns ESG-CV alongside current and newly-available CARES Act funds."

The comment period coincides with an announcement from the U.S. Department of Housing and Urban Development of new allocations totaling over $27.3M in Community Development Block Grant (CDBG) funds to Indiana and its cities with explicit guidance that "funds can be used to provide temporary financial assistance to meet rental obligations for up to 6 months".

The comments state: "[f]or the proposed ESG plan to make a meaningful impact on the scope of Indiana’s housing stability crisis, the state must act quickly to incorporate both the ESG-CV2 and CDBG-CV3, as well as other remaining CARES Act funds to re-open the Rental Assistance Program well before the end of the CDC’s moratorium."

The comments reiterate calls on the state to provide a coordinated COVID-19 Housing Stability policy response, with a Task Force comprised of landlords, tenants, and experts in the connections between public health and housing; as well as a dashboard on the state's COVID-19 website with data on evictions and outcomes of rental assistance programs.

Read Prosperity Indiana's full comments here.