Mayoral Candidates on Indianapolis’ Affordable Housing Strategy
It is increasingly difficult to find affordable housing in Indianapolis. Home prices have risen since the pandemic, interest rates have risen and rent has become more expensive. This affects low- and middle-income populations more severely, and wages are not keeping pace.
City governments can address the issue in several ways — and both Indianapolis mayoral candidates, Republican Jefferson Sheriff and incumbent Democratic Mayor Joe Hogsett, have acknowledged the issue as a priority during their 2023 campaigns.
In interviews with WFYI, Hogsett and Shreve talked about how they address housing issues in the city.
Hogsett said he aims to make Indianapolis a place where everyone can find a home.
“And whether that’s market rate, or downtown residential housing, which is exploding, or whether that’s workforce housing, or below-market rate housing — however you want to define the term affordable, it should be affordable.” In Indianapolis, “that’s what we’re committed to providing,” Hogsett said.
Challenger Sheriff said The market remains unaffordable for many. Both candidates agree on the need to create more supply.
“Supply and demand are market-driven, market-driven, and what can Shreve management do about that — well, you’re influencing some of those elements that control the speed at which inventory can be delivered to the market,” Shreve said.
The city has created a number of affordable housing units in Indianapolis over the past few years. The market could use more housing of all types, including single-family homes, market-rate apartments, and safe and affordable subsidized housing.
The city said it has invested about $20 million in American Rescue Plan Act funds to add affordable housing units.
In 2022, the city was able to add 1,560 units, and an estimated 760 units this year.
But Indianapolis still needs more. The local research group SAVI has estimated A citywide shortage of more than 30,000 affordable housing units for very low-income families.
Creating new inventory can help improve supply and demand. During this year’s municipal election campaign, WYF heard from several city council candidates about bureaucratic inefficiency that they said hampered development progress. The sheriff — like others — points to the Department of Business and Neighborhood Services, which handles permits that can include anything from sewers to driveways. DBNS has discussed attempts to simplify permits at recent meetings.
The sheriff said he believes developers want to build in Indianapolis, but too much red tape surrounds the process.
“BNS is a thorn in the side of a lot of people in the development community who would tell us it’s hard to get things done in a timely manner in Indianapolis when it comes to development,” Sharif said. “The process is slow. It’s expensive. And all of these cost layers are preventing further investment in housing in our community.”
Much of the housing development the city is focusing on involves tax credits in the form of TIF or PILOT proposals. Pilot, or payment in lieu of taxes, It gives developers tax breaks in exchange for increased rental affordability. Tax increment financing, or TIF, creates funding through which districts will receive future tax dollars. It adds housing stock, but only a small percentage of units, typically 5 to 10 percent, are required to be affordable through a TIF agreement.
The sheriff said he would be more conservative in his use of those measures.
“I think we should keep as much of our inventory as possible in the public domain of our tax districts, so that it’s not too restricted or too polluted. So I would be more judicious in making TIF awards.”
Another tool is to incentivize developers to create workforce housing in new developments. A luxury mixed-use apartment building on the Near North Side is setting aside a portion of units for lower rent through a workforce housing agreement. The space will benefit medical students and health care staff at IU Health’s new campus, Hogsett said.
“Which, by the way, have not historically been highly paid, at least not initially, because they are either in school or starting their careers,” Hogsett said. “Wesley Place is a housing unit that will help health workers at IU.”
Homeowners are also suffering as property values rise. Last year, the Hogsett administration introduced A Property tax credit For homeowners in Marion County that benefited the majority of residents.
This week, the sheriff announced a tax relief plan that he said he would try to implement as mayor. This would include a property tax freeze for residents over 65 and some younger homeowners who meet certain requirements.
The measure will work through a “freeze fund” backed by city bonds, the sheriff said.
“Every homeowner wants the value of their home to increase; “This is a good thing,” Sharif said in his announcement. “We just need a simple financing mechanism to capture some of that value to pay the increased taxes.”
The Hogsett administration focused on measures to prevent displacement and maintain affordable housing, especially for older residents who lived in a community undergoing change and gentrification.
A pilot program highlighted by Hogsett uses a new state law to provide a tax break to some residents in the Riverside neighborhood.
“If you’re a long-time, multi-generational homeowner, and you may be on a fixed income, retired or otherwise, in many cases, people are, unfortunately, having to move and we want to stop that, so that homeowners get valuable property,” Hogsett said. He said.
As the city continues to rely on federal grant programs, there are some concerns that they may be difficult to obtain. At this year’s budget meeting, Metropolitan Development Department Director Rusty Carr said creating the affordable housing stock of the future is market-centered.
“When we finance housing development and affordable housing, our money is usually just one piece of a very large capital pile. And so we rely on federal and state tax credits to help fund the rest of those credits. Those have become very competitive and narrow,” Carr said. very important in this market.”
Under a Hogsett or Shreve administration, the city will still need to use a range of solutions to help stimulate the development of affordable housing for all residents.
Contact WFYI city government and politics reporter Jill Sheridan at email@example.com.