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“What can Indiana policymakers do to solve the housing shortage?”
Homeownership is more affordable in Indiana than in the nation overall, but this cost-of-living advantage has slipped with our state’s housing shortage. Our median home price has nearly doubled in the past decade, leaving a growing number of families priced out of their opportunity to put down roots and build generational wealth.
Real estate agents see the issue firsthand: On an average day in 2025, 13,000 homes are listed for sale statewide—this number was 17,000 in 2019 and nearly 40,000 in 2015, to meet demand from 200,000 fewer households.
With Hoosiers buying later, rents have also outpaced wages; nearly half our renter households are now cost-burdened.
What do we do?
Indiana has to build more homes. New construction has lagged population growth since the Great Recession—homebuilding languishes near a 30-year low on a per-household basis. We project a statewide shortfall of 30,000 owner-occupied units by 2028 (assuming current building rates), two-thirds of them in central Indiana alone.
Development costs are an obvious culprit. For the past 20 years, local governments have steadily shifted the public costs of new housing—roads, sidewalks, sewers and amenities like parks—onto builders through impact fees passed along to homebuyers.
In 2023, Indiana’s Residential Infrastructure Assistance Program was created to provide low-cost financing for new-housing infrastructure with state-backed loans.
The General Assembly continued this initiative in the new state budget.
But restrictive land-use policies and residential development standards also add time and money to housing projects, erasing any profitable market for starter homes. Fishers and Carmel have made the situation worse recently with arbitrary rental caps that will increase rent and drive workers further from jobs.
Housing is a statewide priority; when cities can choose to make themselves unaffordable to young families and middle-income workers, the state should provide relief and consider overruling the most egregious local regulations.
On the other hand, communities that embrace growth should be empowered. Rural and industrial areas in particular are often held back by aging housing stock that limits their ability to capitalize on demographic and economic trends
like remote work and walkable redevelopment.
A third of our owner-occupied housing units were built before 1960, as opposed to 25% nationally; roughly 200,000 units sit vacant across the state (subtracting those for sale or rent).
These vacancies can’t solve our shortage. Some are unsafe or unaffordable to renovate, and many are simply incompatible with consumer preferences. (For example, 80% of owner-occupied homes have three or more bedrooms, while less than half of vacant units do.) We can’t just wait for these homes to be filled or demolished.
Cities like South Bend and Fort Wayne are working to encourage rehabilitation and in-fill construction, and the Legislature included $250,000 in pilot funding for a Home Repair Matching Grant Program in the current budget. We need to scale efforts like these into a
statewide blueprint for residential reinvestment.
Indiana’s housing shortage touches all of us: Parents and grandparents who want future generations to live nearby. Employers who value cost of living and quality of life in workforce recruitment. Local officials who see beyond “not in my backyard” posturing to embrace growth. And property taxpayers who want more neighbors to share the cost of local services.
But it takes a full-court press of policy solutions and persistent advocacy from housing advocates—Indiana’s real estate agents will lead the way on behalf of current and future homeowners.•
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Fisher is CEO of the Indiana Association of Realtors. Send comments to [email protected].
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