Housing: The Affordability Challenge in a Growing Region

This comprehensive report, funded through a grant from the Lilly Endowment to the Community Foundation of Southern Indiana (CFSI), was developed in partnership with the Applied Research and Education Center (AREC) at Indiana University Southeast.

The availability of affordable housing is a growing challenge across Clark and Floyd counties. Our recent study, Housing: The Affordability Challenge in a Growing Region, examines the structural dynamics of income and the housing market in our growing region, offering key insights into the challenges faced by local residents.

Understanding the Housing Crisis

The study dives into the structural dynamics of income and the housing market in our Southern Indiana region. Its primary goal is to uncover leverage points for systemic change, ensuring better housing outcomes for the significant portion of Clark and Floyd County residents burdened by housing costs.

Alarmingly, the findings reveal that rising housing costs are far outpacing income growth, especially for lower-income households. This imbalance disproportionately affects Black, Hispanic/Latine, and female-headed single-parent households, exacerbating housing insecurity and perpetuating long-term inequalities.

Key Findings from the Report

• Housing Cost Burden: A third of Clark and Floyd County households have incomes below $50,000. Those earning less than $50,000 per year are most likely to struggle with high housing cost burden. Housing that is affordable to these households is in short supply and market forces alone are not likely to increase supply at this price point.
• Renters at Risk: Approximately 52% of Clark County and 42% of Floyd County renters spend more than 30% of their income on housing costs.
• Rising Homeownership Costs: Among owners, 20.5% in Clark County and 15.3% in Floyd County spend 30% or more of their income on housing costs. This burden leaves households that simply can’t afford regular updates and necessary maintenance on their properties.
• Barriers to Homeownership: Low vacancy rates, gentrification and the rise of short-term rentals, and growth in new workforce and high-end housing are pricing residents out, making it difficult for adults earning at or below Area Median Income (AMI) to enter homeownership, leaving vulnerable residents one “life event” away from being unhoused.

Leveraging the Community Needs Assessment

According to the 2020 Assessment of Needs and Priorities in Clark and Floyd counties, known as the Priorities for Progress: Assets and Aspirations in Southern Indiana 2021, affordable housing is a top priority for residents in the region. While the local housing market has rebounded from the 2008 collapse, the rental market, places safe, quality housing out of reach for many workers.

In 2019, an estimated 50.6% of the two-county region’s renter households spent 30% or more of monthly household income on rent (not including utilities). Nearly 7,000 Clark and Floyd County households spent 50% or more of monthly earnings on housing (not including utilities) during the 2014-2018 period.

The Needs Assessment argues for more mixed income housing development, which would ease the price pressures on the local rental market and increase access to affordable housing for low-wage workers.

The Road Ahead

The study outlines innovative strategies used across the U.S., such as community land trusts and mixed-income housing developments, that could be adapted to Southern Indiana. It calls for local governments, nonprofits, developers, and financial institutions to work together to create sustainable solutions that prioritize equity and affordability.

The report also stresses the importance of collective action. It urges stakeholders to align resources and implement policies that prioritize housing affordability and equity. Without intervention, rising housing costs could continue to displace vulnerable populations and hinder economic growth.

Next Steps for Southern Indiana

The Housing: The Affordability Challenge in a Growing Region report is a vital resource for understanding and addressing housing challenges in Clark and Floyd counties. By fostering collaboration and embracing innovative solutions, our region can leverage its resources – including land, funding, policy tools, and grant opportunities – to develop sustainable affordable housing models.

Explore the Study

Dive deeper into the findings and recommendations by viewing the full report below. Our interactive digital flipbook allows you to navigate the study and explore its insights. You can also download the complete report.