New national housing report echoes study conducted by Federal Home Loan Bank of Indianapolis
2024年7月25日 - 4:52AM
A new annual report by the National Low Income Housing Coalition
(NLIHC) that highlights current trends in rental housing and
average wages across the country echoes similar sobering findings
of a housing needs assessment conducted by the Federal Home Loan
Bank of Indianapolis (FHLBank Indianapolis or Bank) in 2023.
Titled “Bridging the Gap: Housing and Community Needs in Indiana
and Michigan,” the FHLBank Indianapolis study conducted by
third-party consulting firm Atria Planning found that while hourly
wages in Indiana and Michigan rose an average of 11% between 2019
and 2023, average rent costs increased at a higher rate of 30%.
Notably, the average home purchase price saw an even greater
increase, rising an average of 48% during that time, highlighting
the increasing struggle to find affordable housing solutions for
low- and middle-income households.
The NLIHC’s report, titled “Out of Reach: The High Cost of
Housing,” once again calls attention to disparities between the
rapidly rising cost of rental housing and comparatively stagnant
wages earned by a significant portion of renters across the
country.
“Out of Reach” highlights a central statistic: the Housing Wage,
which estimates the hourly wage required to afford a modest rental
home at HUD’s Fair Market Rent levels. Industrywide, the standard
for what constitutes “affordable” housing is generally accepted to
be no more than 30% of a household’s total monthly
income.National report highlightsIn Indiana, the
NLIHC reports the estimated number of work hours required to afford
a modest one-bedroom unit at Fair Market Rent is 101 hours a week.
The housing wage needed to afford a modest two-bedroom apartment is
$22.07 an hour. “Out of Reach” further estimates that over 350,000
renter households, or 44% of renters, earn less than 50% of the
local Area Median Income.
In Michigan, the NLIHC reports the estimated number of weekly
working hours required to afford a modest one-bedroom unit at Fair
Market Rent is 72 hours a week, and the necessary housing wage to
afford a two-bedroom apartment is $23.16 an hour. Per the report,
nearly 500,000 households — 45% of Michigan renters — earn below
50% of the local Area Median Income.
Bank report highlightsEchoing these findings,
the Bank’s “Bridging the Gap” study further reports that Indiana
and Michigan combined are home to about 800,000 renters who pay
more than 30% of their income toward housing costs. Of these, more
than 400,000 spend more than 50% of their income on housing costs
and are considered severely cost burdened.
Adding to the problem, the affordability contracts on more than
30,000 existing rental units developed through tax credits in
Indiana and Michigan are set to expire within the next five years,
highlighting a significant need for action.
“Bridging the Gap” further examines rising affordability
problems for even low- to middle-income homeowners, who
historically have been more insulated from the worst problems
caused by inflation and rapidly rising rents. The Bank’s report
further illustrates that incomplete methodology can give rise to
misconceptions about an area’s true housing affordability
problems.
Notably, the report found that when comparing typical home
prices with area median income, most metro areas within Indiana and
Michigan — excluding Traverse City and Ann Arbor, Mich., and
Lafayette and Bloomington, Ind. — would be considered affordable.
However, when quantifying the number and percentage of households
spending more than 30% of their income on housing, significant
affordability challenges appear in areas with high poverty, like
Detroit and Flint, Mich. and Gary, Ind., as well as in rural areas
like central and northern Michigan. This approach also highlights
unaffordability in areas with significant economic disparity such
as college towns and areas with high tourism.
For more information on how FHLBank Indianapolis is working to
support middle- and low-income renters by increasing and improving
the available housing stock and supporting affordable housing
development across Indiana and Michigan, see the Community Programs
page on fhlbi.com.
Media contact information:For more information,
contact Katherine Marshall, Corporate Communications Specialist, at
kmarshall@fhlbi.com.
Federal Home Loan Bank of Indianapolis: Building
Partnerships. Serving CommunitiesFHLBank Indianapolis is a
regional bank in the Federal Home Loan Bank System. FHLBanks are
government-sponsored enterprises created by Congress to provide
access to low-cost funding for their member financial institutions,
with particular attention paid to providing solutions that support
the housing and small business needs of members' customers.
FHLBanks are privately capitalized and funded, and they receive no
Congressional appropriations. One of 11 independent regional
cooperative banks across the U.S., FHLBank Indianapolis is owned by
its Indiana and Michigan financial institution members, including
commercial banks, credit unions, insurance companies, savings
institutions and community development financial institutions. For
more information about FHLBank Indianapolis, visit www.fhlbi.com
and follow the Bank on LinkedIn, and Instagram and X at
@FHLBankIndy.