News of the housing demand is everywhere you turn. Prospective buyers can’t escape stories about low inventory of available homes, the rising costs of buying a home and the stress of a strong seller’s market. Despite these obstacles, families and individuals are reevaluating what really matters to their health and wellbeing in the wake of the pandemic, and more and more are prioritizing homeownership in a neighborhood they love.
Homeownership plays a dynamic role in building strong and stable communities. But access to that dream of owning a home is not equitable across neighborhoods, communities and racial and ethnic groups.
Homeownership rates in high-poverty areas in central Indiana have dropped precipitously since 2010. Nationally, the number of mortgages issued under $100,000 have decreased by more than 40% over the same time period. Low-income homeowners are being displaced from hard-hit neighborhoods and those who would choose to buy a home there are unable to secure financing.
COVID-19 has exacerbated this disparity. According to the SAVI COVID Impact Index, the four hardest hit zip codes in Indianapolis include very high percentages of residents that are people of color (68% or higher). Ten of the 12 most impacted zip codes have majority minority populations.
Unfortunately, there are many factors that continue to make homeownership less attainable for low-income residents. Tighter underwriting criteria, stagnant wages and the rising cost of upkeep and utilities makes it more difficult to afford a house while aging housing stock, rental investors, demolition and high construction costs reduce the inventory of affordable houses each year. Historically racist housing policies, including redlining and segregation, have also created deep gaps in equal access to homeownership and wealth building opportunities. Preserving the existing affordable housing stock, especially among minority homeowners, is critical to meeting the housing needs of low- and moderate-income families.
In response to these challenges, Renew Indianapolis and the city of Indianapolis developed the Indy Affordable Modification Program, which allows homeowners negatively affected by COVID-19 to refinance mortgage debt at a below-market interest rate for up to 30 years. IndyAMP allows owners to remain in their homes, become current with their mortgages, and lower their monthly payment. The program is open to homeowners who have historically been current on their mortgage but may now be struggling to come up with monthly payments due to circumstances beyond their control.
Renew also offers flexible financing to new homebuyers through the Edge Fund to promote affordable, inclusive and diverse housing opportunities. While many traditional lenders have tightened lending standards and restricted credit access, mission-driven lenders like Edge Fund have continued to expand access to safe and affordable credit. Edge Fund helps to create attainable housing options in Indianapolis by providing mortgages, construction loans and bridge loans for both single- and multi-family housing.
Homeownership remains the principal way people grow intergenerational wealth and improve their economic mobility in the United States. Here in Marion County and in most cities in the United States, it will take the resources of private, public and not-for-profit partners to realize meaningful impact in majority minority neighborhoods.
For Indianapolis to become a truly equitable community, we must actively dismantle centuries-old barriers and empower individuals and communities by helping people buy, fix and keep their homes in the neighborhood they love.•
Meyer is CEO of Renew Indianapolis.