Housing affordability — or rather unaffordability — has received plenty of attention since the Great Recession. Even though we are now past that event, the cost of housing continues to be a major concern for many, if not most, Hoosiers. It seems that every couple of months, some group, be it the Urban Institute or the National Low Income Housing Coalition, puts out another map that shows in varying shades of blue and red just where people are sweating over the price of housing the most.
Indiana has a reputation for having an affordable supply of housing, but that is only in comparison to some of its neighbors. We still must contend with the reality that the average Hoosier household has to make more than $15 per hour to afford only an average two-bedroom apartment. Or put another way, every single county in the state requires that a minimum wage earner must work the equivalent of two full-time jobs or more just to be able to pay rent for that same modest home. That may not seem like a big threshold to overcome for those fortunate enough to have two breadwinners, few other debts to pay off, or good health. But to those whose incomes are restricted by any number of factors, it is a challenge that can be insurmountable.
Fortunately, the Low Income Housing Tax Credit (LIHTC) has been wildly effective in combating the affordable housing crisis. LIHTC is the primary tool by which affordable housing gets built in Indiana and nationwide. The tax credits are sold to investors who benefit from the reduction in their tax liability, with the private money from their sale going to build high quality apartments that offer rents affordable to low-income households. That term — “low income” — comes with a lot of baggage to unpack. So to offer some perspective, here are some low-income households in Indiana that are helped by the LIHTC program:
n In Indianapolis, a family of four with two children, one stay-at-home parent, and one parent making a $45,000 salary as a public school teacher is considered low income.
n In Fort Wayne, a recent community college graduate who just moved out of their parents’ home and makes $13.25 per hour as a Certified Nurse Assistant is considered low income.
n In rural Harrison County, a single mother of one making $34,000 a year as a 9-1-1 dispatcher is considered low income.
These are real examples of households that qualify to live in LIHTC housing communities. Families in these situations earn a real living, but if the housing options available in their community take half of their paycheck each month, that leaves very little wiggle room for emergencies or to build up a savings account or college fund, especially when groceries, childcare, medication, car payments, and student loans are thrown into the mix. LIHTC helps people in these situations by offering affordable rents, plain and simple. The people who live in LIHTC housing are not offered subsidies by the program, and all must have the means to pay their own way.
With luck, by having a monthly rent that does not rob them of their future wealth, some tenants can move on to purchase homes in the same communities where they rented. Others might stay for as long as the rest of their lives, and if they improve their financial situation during that time, they don’t have to move out. That is the benefit of the LIHTC program, and its beneficiaries are the real people who already live and work in our communities. It is fortunate that throughout its 30 years the LIHTC program has been well supported on both sides of the political aisle. But, if we and our elected officials can strengthen and support the program even more, then together we will strengthen and support our own communities, too.
— Dawn Gallaway is president of the Indiana Affordable Housing Council.