feature story
A Better Foundation:
Building economic prospertiy with
truly affordable housing
The housing market is one of the most studied and talked about—yet
misunderstood—sectors of the US economy.
Nearly every aspect of the market can
be reduced to statistics. Media outlets
report government data about housing
starts. Banks advertise their mortgage
rates. Realtors make it easy to compare
home prices and calculate mortgage
payments online.
But getting at the truth behind those
numbers is another story.
Take the idea that, as NBC News
reported recently, Indianapolis is the
“dream city” for Millennials because of
“the combination of housing affordability
and job growth” for young people
looking to “build their first bit of equity.”
Bloomberg backs up this claim with a
chart that ranks Indianapolis among the
top 5 in housing affordability among the
50 largest cities. And, according to an
analysis of the US Census, the average
resident of Central Indiana spends only
about 20 percent of their annual income
on housing, making it the 23rd most
affordable metro area in the nation.
The cost of housing relative to annual
income is important. But it’s only one part
of the equation. A more realistic account
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of housing affordability in Indianapolis,
or in any city, takes into account a broad
range of factors that are usually left out
of housing “affordability” indexes.
That’s a key takeaway of The
Affordable Housing Market and Why It
Matters, a new report released by SAVI,
a community information and analysis
system developed by The Polis Center
at IUPUI.
“SAVI’s goal is to use data to shed
new light on important issues that
affect families in Central Indiana,” says
Sharon Kandris, director of community
informatics and SAVI at The Polis Center.
“Affordable housing is key to achieving
financial stability, and it is important
for those supporting families and
community development efforts to
understand the complexities and
opportunities around this.”
Taking stock of hidden costs
The great “hidden” factor that affects
affordability is income inequality.
Wealth disparities affect a family’s
access to housing in crucial ways, which