Housing USA: Indianapolis

6 min read

Working and living downtown

If the downtown area of a major U.S. city is growing, there is little chance that it’s also providing affordable housing for all income groups. This is clearly the case in New York City and San Francisco, where a combination of high demand, high land values, and crazy regulations put median listing prices at well over $1 million in the Central Business Districts. However, this is also the case in mid-level cities—like Detroit, Charlotte, and Oklahoma City—where housing markets that aren’t otherwise hot still have high prices in the central areas.

Indianapolis is another example. Since 2012, its downtown population has grown by 20 percent, and median home prices downtown are $309,400. This is $113,000 above the citywide median, and a Trulia heat map marks central Indianapolis as the most expensive part of the city.

This means that Indy’s downtown – which, like others nationwide, has gotten targeted public investment – could become a yuppie ghetto. The professional-class employees working at Salesforce, Eli Lilly and other anchor downtown corporations will be able to afford such prices. The working-class employees (including ones employed by those same companies) won’t.

But Indianapolis wants to avoid that fate. Amid this downtown growth spurt, the city has allowed developers to both build new projects and restore old ones, using LIHTC financing, making quasi-luxury units attainable for multiple income groups.

I recently stayed overnight in one of these projects to see how they are transforming the neighborhood – and who’s included in the process.

To get this access, I connected on my first morning here with TWG Development. Founded in 2007 by Joe Whitsett, TWG has catapulted to become one of the top players in downtown Indy’s transformation. While the company’s portfolio extends across several states, mostly in the Midwest, its headquarters are here downtown, and its top works are clustered inside and just north of the neighborhood.

I began by touring some of those properties with John Sullivan, the company’s vice president of tax credit development. They included a historic warehouse renovation downtown, a brand new master-planned apartment complex called the Monon Lofts on gentrifying 16th Street, and a former laundromat that the company had restored and made into senior housing.

All of these projects were mixed-income, dedicating sizable portions to LIHTC units, including some units for people making 50 percent or less of AMI, which in Indianapolis is $69,900. All the projects that Sullivan showed me included other features—environmental cleanups, historically-preserved details, solar panels and bike and rideshare spaces—that also were sometimes financed by separate Federal Tax Credits.

Following the tour with Sullivan, I got another one, this time from a TWG property manager. He showed me around – and then checked me into – another company project called the Penn Street Tower. This historic brick building sits just a block from Fountain Square, the main public space in Indianapolis, and is over a century old. It was once the headquarters for Consolidated Insurance Company, but sat empty for two decades before TWG renovated and reopened it as apartments in 2015.

The building was, like the others, a good example of the quality – nay, luxury – people enjoy under this mixed-income, tax-credit-financed model. Penn Street had slick finishes and nice common areas, including securitized entry, free laundry, a weight room and a lounge serving free coffee. The rooms themselves, such as the one I stayed in on the fourth floor overlooking Pennsylvania Street, had granite kitchen countertops, tiled bathrooms and wood-paneled floors.

These features were uniform throughout all the projects I visited, and, crucially, were available to every income group. Of Penn Street’s 98 units, 22 were financed by tax credits, and they were spread proportionately across the different floors. In fact, said Sullivan, the unit I stayed in was almost identical to the average Low Income Housing Tax Credit unit, with the only real difference being the price points. While most units had a 750-square-foot, one-bedroom layout, the market-rate ones rented for roughly $1,500/month, and the subsidized ones for about half that. The tax credits enable these lower prices, and without them, Sullivan said that projects, like Penn Street, wouldn’t have cheap apartments, and might not pencil out period.

But such projects have penciled this last decade in downtown Indy, housing people who generally make under $40,000, yet serve as the lifeblood of the downtown workforce.

“With any sort of business,” said Sullivan, “you not only have the higher-income workers. You also have the support staff.”

Among the workers who have benefited from LIHTC units, he continued, were entry-level employees at government and corporate offices; police officers and firefighters; and low-wage retail workers at places, like Starbucks.

One example I met during my stay was John Alexander Lopez. Lopez is an elephant trainer at the Indianapolis Zoo, just outside downtown. The 24-year-old Iowa State University graduate moved to Indy this past December to take his job, and expects to make $27,000 in 2018. While searching for housing last fall, he realized that most apartments in his price range (which he defined as under $800/month) were in suburbia. One apartment he found in Greenwood, IN, for example, was 15 miles from downtown, and required a daily one-way rush-hour commute of over 30 minutes.

But while continuing his search, Lopez discovered a LIHTC unit in the Monon Lofts, the master-planned apartments that TWG built just north of downtown. He qualified for it by income, and now rents a 772-square-foot apartment for $712 per month. It is a 10-minute drive from his job, and even abuts a well-known local trail used for biking and walking.

“I work in the city, and can afford to live in the city now, and not take forever to get to and from work,” he said.

As long as downtown Indianapolis keeps growing, it will continue to attract people, like Lopez: those who work downtown, wish to live here, but can’t afford to. One goal of the city, and others that are seeing downtown revivals, is to make the growth equitable. This goal begins with the simple ability to house multiple income groups within downtown. The recent projects in Indy – built by TWG and financed by LIHTC – show one way that this can happen.

Story Contacts:
John Alexander Lopez
Elephant Trainer, Indianapolis Zoo
[email protected]

John Sullivan
Vice President of Tax Credit Development, TWG Development
[email protected]

Irvin Rivera
Property Manager, Penn Street Tower
[email protected]