The ‘Housing Governor’ Hoosiers have been waiting for

Columnist Andrew Bradley details how Indiana’s new governor could be pivotal in shaping housing policy for millions of Hoosiers. (Getty Image)

With the past decade marked by decreasing homeownership, spiraling costs, and increasingly unstable homes, Indiana’s next Governor has the critical opportunity to become the ‘Housing Governor’ and help increase the supply and affordability of homes for all Hoosiers. Prosperity Indiana’s policy brief Housing Hoosiers, created for the Indiana University Public Policy Institue’s 2024 Gubernatorial Forum series, offers a guide for Indiana’s next governor to repair the state’s ladder to homeownership and housing security. 

The brief conceives of a ‘housing ladder’ for Indiana that would allow Hoosiers to build assets and climb to larger homes as families grow and choose to step up from renting to homeownership. When structurally sound, each rung of the housing ladder would provide Hoosiers with a safe, stable, and affordable place to live without spending more than 30% of their income on housing costs. Investment in the preservation and rehabilitation of existing homes and in the enforcement of health and safety standards would keep each rung strong so homeowners and renters could enjoy stability wherever they choose to live. 

However, the brief demonstrates that Indiana’s current housing ladder is missing rungs and is in dire need of reinforcement and repair. For example, homeownership rates in Indiana have fallen from 70.6% in 2012 to 70.1% in 2022, a decline driven almost exclusively by the decrease in Black homeownership. Reasons include the increased costs of home repair and property taxes, structural issues such as the legacy of redlining and discriminatory lending, and an underproduction rate that now stands at 40,000 homes. 

Hoosiers who cannot climb to – or stay on – the rung of homeownership face a rental housing environment that is among the most deteriorated in the Midwest, if not the nation. With only 34 homes for every 100 extremely low-income Hoosier renter households, Indiana now has a lower rate of affordable and available housing than the national average. 76% of those Hoosiers spend more than half of their income on housing costs, the single-highest rate of severe housing cost burden in the Midwest. It now takes $22.07 an hour to afford a modest, two-bedroom apartment at fair market rent in Indiana. However, the average Hoosier renter’s wage is only $17.92 per hour. In addition, 14 of Indiana’s 20 largest occupations pay median wages that are less than what a full-time worker needs to afford that two-bedroom rental —up from 9 of the top 20 occupations in 2022. 

Indiana’s refusal to enforce housing health and safety standards has made life more dangerous for the 30% of Hoosiers who rent their homes and has seriously impaired the ability to climb to better housing and economic opportunities. Indiana is one of only six states without effective public and private enforcement of habitability standards such as court-based rent escrow. In most states, if tenants are current on rent and all obligations of a lease but their units fail to meet health and safety standards, they can ask a judge to allow them to continue to pay rent into court-based escrow accounts until the judge is satisfied that the proper repairs have been made. The combination of low supply, increased housing costs, and poor conditions contributes to a rate of Hoosiers experiencing homelessness that has increased by 11% since 2017 while the state’s population increased only 3%. 

Despite these daunting facts, Indiana’s next governor has an opportunity to help fix the housing ladder and create stronger communities for all. Housing Hoosiers recommends that the next Governor appoint a commission on housing safety, stability, and affordability, to align resources and stakeholders and to get more out of proven investments like the state’s Housing Trust Fund and Housing First programs. The next Governor can also adopt innovative approaches like Ohio’s Single Family Tax Credit program, adapted from U.S. Senator Todd Young’s Neighborhood Homes Investment Act, which provides gap financing for developers to build or renovate homes that are affordable to low- and moderate-income homebuyers. And without spending a dime, the next Governor could increase enforcement of existing habitability code standards and strengthen fair housing standards and zoning reform to increase affordability. 

By tackling the state’s housing crisis head-on, our next chief executive could become the Housing Governor that Hoosiers have been waiting for.