In preparation for Indy’s upcoming local elections, IndyHub’s running YP Perspectives: The 2015 Indy Election Series. These articles explore important community issues that will be directly impacted by this election. We serve as a platform for these conversations. We care that you vote–not how you vote.
Traditionally, an individual’s ZIP code determined their K-12 educational resources, access to healthy or unhealthy food options, proximity to adequate healthcare facilities, and the response time from law enforcement due to the occurrence of a crime.
While there has been some progression in this area, it is still a battle that many Hoosiers fight on a daily. Yet, there is a new reality that young professionals (YPs) in Indianapolis have come to face with when it comes to housing in the downtown area; affordable options or the lack thereof.
Affordable housing has become a taboo subject for many individuals that are in control of the housing brought to the city. No, this is not the definition of affordable housing that comes to mind when it is debated at the City County Council, at a mayoral forum, or while legislators are canvassing the neighborhoods encouraging their constituents to vote on November 3rd.
The Indianapolis Housing Agency defines affordable housing as rent being based on a flat rate. This is the same definition that helped to create the Department of Housing and Urban Development’s Affordable Housing Program. Such rental programs include private or subsidized housing, public housing, and the Housing Choice Voucher Program.
These programs have specific low income requirements that must be met in order to be a benefactor. In 2015, HUD’s low income calculations for Marion County included:
| FY 2015 INCOME LIMITS |
1 PERSON |
2 PERSON HOUSEHOLD |
| Very Low (50%) Income Limits |
$23, 850 |
$27, 250 |
| Extremely Low Income Limits |
$14, 350 |
$16,400 |
| Low (80%) Income Limits |
$38,150 |
$43,600 |
http://www.huduser.gov/portal/datasets/il/il2015/2015summary.odn
While such programs are necessary and crucial to ensure that affordable housing is available to all citizens; such programs do not always directly relate to YPs. In many instances, YPs do not fit into the federally mandated low income category to qualify for affordable housing options. Which causes downtown Indianapolis to look like a case of “The Haves” and “The Have Nots” when it comes to affordable housing options; with YPs falling in the middle.
In comparison to other metropolitan cities, what makes Indianapolis different when it comes to housing for YPs?
Duane Ingram, Indy YP
The layout of downtown Indianapolis is different in comparison to other cities of its size. Duane Ingram, the Chief Operating Officer of Mapleton-Fall Creek Development Corporation, believes that when one looks at other cities, the downtown area generally has an increased number of housing structure, but the nightlife options are few and far between.
In recent years, Indianapolis has created what some believe is an up and coming vibrant nightlife, while the affordable housing market has suffered. Yes, there has been an influx of new developments but this has turned into downtown being oversaturated with condominiums.
When it comes to traditional affordable housing options, developers and contractors tend to focus on the plans for 3 bedroom units that would be ideal for families. Yet, the majority of YPs that want to live downtown are considered mid-ground, so the 1 bedroom or 2-bedroom market is being missed when it correlates both to access and affordability.
With the lack of affordable housing options, YPs that want to have the best of both world’s (access to a vibrant nightlife and housing) are forced to make a choice. There are two options: “Do I pay more and live downtown” or “Do I move further away and get more bang for my buck?” As a YP, it is a choice that several have had to make when making their zip code decision.
You can build it, but will they come….and stay?
In the movie Field of Dreams, Kevin Costner’s character took on the large feat of building a baseball diamond. While driving down the streets of downtown, one might say that this same thing is taking place with the increased number of new construction efforts. However, with these new developments the real question is: “Can Indy YPs afford to live in them?”
Catherine Esselman, YP Indy
Catherine Esselman, the Real Estate Development Director for Downtown Indy, knows all too well what it looks like for Indianapolis to be considered a viable place for housing options. According to Esselman, “absorption is the key matrix for a healthy market.”
While Indianapolis has new developments, the true test comes in whether or not all these rentals are being absorbed both efficiently and effectively.
There are certain properties in downtown Indianapolis that may be affordable to a YP, such as Van Rooy Companies or Barrett & Stokely units. But, with these units may come a lack of YP preferred amenities and less square footage.
The newer developments are much higher in price but inclusive of the amenities that many YPs are attracted too. Esselman reiterated, when looking at the pricing of these units, most new developments are charging over $1.60 to $2.00 per square foot. For example, a floorplan that is based on a $2.00 per square foot calculation would charge a YP potential tenant at least $1200 for a 600 square foot unit. The less expensive units may be allocated at $1.00 per square foot.
There was a report done that showed that generally these less expensive and less square footage properties have an average build date of 1938, with all being renovated at some point and time.
In addition, the ala carte method is in effect when it comes to some new downtown residential properties. There may be a “base” rent that is promoted, but after adding additional costs from the cart such as trash pickup/recycle services, garage parking, and washer/dryer; then the YP’s rent can go from the $1,000 “base” rent for a studio or 1 bedroom to $1,200 to $1,500 in real rent. This amount allocated along with household bills, car note’s, and student loan payments that weigh on many YPs makes these rental prices less and less affordable.
With Indianapolis focusing on attracting new YPs to the city and retaining the local residents through the pull of increased employment opportunities; the question remains if these advertised salaries can actually afford to live in the downtown that was set up to attract this same pool of talented YPs. These continue to be questions that need answers.
What are some ways that new a new mayor can address the affordable housing options for YPs to access the downtown market?
One alternative is to expand the borders of downtown. Ingram believes that with the influx of new developments, these housing options have priced out the middle class and those that fall into that economic status, including YPs. If the borders are expanded to surrounding areas, this would allow more access for an increase in economic development. Specifically, in relation to the allocation of downtown TIF dollars.
The Indiana Economic Development Association describes Tax Increment Financing (TIF), as “a mechanism for capturing future tax benefits of real estate improvements to pay for present costs related to those improvements. TIF uses the increased property taxes generated from new development to finance costs related to development, such as public infrastructure and private incentives.” The goal is to increase overall economic development in a community.
This cannot happen if the economic development is thriving in part and stagnant in others. Affordable Indy is a site designed to market affordable housing options in downtown Indianapolis including: The Braxton, Lugar Tower, Millikan on Mass, 16 Park, and Barton Tower. Again these affordable properties have income restrictions for which YPs do not generally qualify.
Esselman also sees the need for there to be more accountability for housing developers. Specifically, when these developers are interested in building in Indianapolis some prioritization must be given to the needs of the community; and not just in the form of dollars.
A new administration can enforce a true sense of accountability. This can come in the form of developers ensuring that these new properties have units that are affordable to YPs, and not under the traditional definition of “affordable” housing or just as a tax credit property.
What challenges do YPs face when it comes to determining their housing options in relation to affordability, accessibility, and awareness in downtown Indianapolis?
Location! Location! Location! According to Esselman, this is the first question a YP must ask themselves when considering the move to downtown Indianapolis. Like any typical housing search, the location that one chooses will determine the amount of rent to be paid. However, in downtown it will also likely affect the square footage, amenities, potential exposure to crime, and access to the vibrant nightlife that was described by Ingram.
In the recent years, Mass Ave has become a hot commodity for YPs during the week and on the weekends. However, there are properties in that area that would not be deemed as “affordable” to the YPs that patron its restaurants, bars, and shops on a daily basis.
On the other hand, there are certain apartments that are located above the businesses on Mass Ave. However, these units are not really advertised as abundantly as much as new construction options. Someone already living in the area may hear about the unit by word of mouth, a posting on Craigslist, or refer a friend.
In fact, Esselman shared how apps and websites like Next Door act as a resource for those considering neighborhoods and housing options. But, in a city like Indianapolis some of this pertinent information is heard about at neighborhood meetings or through a friend or family member.
Indianapolis is a city that is built on relationships YPs new to the city would not be privy to such information. Therefore, one consideration is make sure that the Realtors and Relocation Specialists for these recruiting companies are more educated about the YP perspective when it comes to housing. In addition, along with all the other task forces and commissions that the city has, it may be beneficial to have a real estate/housing task force specifically for the YP’s definition of “affordable” housing.
The reality is that for various reasons many YPs are not able to live in downtown Indianapolis. In order to address this reality, the new administration must expand its way of thinking when it comes to the definition of “affordability” in relation to YPs.
This first step of awareness will open the door to not only having the conversation, but will hopefully lead to true implementation and change. This is crucial if Indianapolis wants to retain and attract YPs on a continuing basis.
If not, YPs will continue to have to make the decision of either living downtown where they want and enjoy the nightlife, access to employment, and culture of the city; or for affordability reasons are forced to move to the outer limits of the city where they will be characterized as “An Urban Girl/Guy Living in A Suburban World.”
