Inside Indiana Business | By Alex Brown, Assistant Managing Editor
The SOURCE River West Entrepreneurship Center is one of the beneficiaries of the funding. (photo courtesy SOURCE River West)
INDIANAPOLIS – JPMorgan Chase & Co. (NYSE: JPM) has announced gifts designed to support economic development and inclusive growth in several Indianapolis neighborhoods. The company is donating a former bank branch and a total of $500,000 to support the neighborhoods, which are part of the Great Places 2020 program. The branch location, located in the Englewood Village neighborhood on the city’s near east side, will become a new coworking space called Vault.
The Indianapolis Neighborhood Housing Partnership has purchased three more sets of properties strategically located by IndyGo bus lines in its quest to spur the development of affordable housing near the routes.
The acquired properties—located at the former headquarters of retail developer Sandor at 22nd and Meridian Streets, the northwest corner of 25th and Delaware streets, and the northeast corner of New York and Rural streets—are the latest acquisitions in INHP’s $15 million Equitable Transit-Oriented Development Fund.
The fund was launched February in collaboration with Michigan-based Cinnaire, a community development financial institution with offices in Indianapolis, which will manage the fund. At that time, INHP announced it had already purchased 401 E. Southern Ave. near Garfield Park and 2163 N. Illinois St.
Dave Bangert Lafayette Journal & Courier Published 5:46 PM EDT May 8, 2019
WEST LAFAYETTE, Ind. – The promise of aerospace-related
jobs that Purdue President Mitch Daniels for years has insisted the
university was ripe to get finally landed Wednesday, as Saab laid out
plans for a manufacturing plant in West Lafayette, just west of campus.
Saab will invest $37 million and employ up to 300 people
at a facility expected to make fuselages for the Boeing T-X, advertised
as the U.S. Air Force’s next-generation jet trainer, company and state
leaders – including Gov. Eric Holcomb – said Wednesday morning at Purdue
The Stockholm-based company’s plant would be the second
manufacturer – and the sixth project overall – announced for Purdue’s
Discovery Park District, a $1 billion plan to create what Daniels has
touted as “live-work-play” concept over the next 30 years just west of
campus. Daniels has hoped to capitalize on Purdue’s strength aerospace
engineering research and its airport — one of the few attached to a
university — to recruit businesses to West Lafayette.
The exact location in the Discovery Park District’s
176-acre aerospace portion was still up in the air, but it will be in
the area between the airport and Newman Road, in the vicinity of Zucrow
Labs, home of Purdue’s jet propulsion laboratories and other aerospace
On a day that Holcomb was calling “a proud, patriotic
day” for Indiana and its place in advanced manufacturing in the name of
cutting-edge national defense, Daniels and Håkan Buskhe, Saab president
and CEO, were already talking about how establishing Saab’s footprint in
West Lafayette now could lead to more in the future.
“I think I’m on safe ground, literally every state I can
think of would have loved to have this plant,” Daniels said. “I’d like
to think Purdue was a tie-breaker. The possibility for laying on top of a
first-rate manufacturing facility a research partnership that may wind
up in areas very far removed from the immediate purpose of this plant,
in our many conversations, the company indicated that that gave us a
dimension that many other contestants didn’t have.
“Now, it’s our job to come through.”
Buskhe said that given the company’s varied interests –
“We do everything at Saab from private aircraft to submarines to radars
to field hospitals to everything,” he said – the promised connections
with Purdue researchers beyond those in aerospace were key in coming to
West Lafayette. Wednesday’s announcement included a partnership with
Purdue to expand Saab’s U.S.-based research and development work.
“There are huge opportunities when it comes to future
sensors, communication, 5G technology and command and control systems,
and in aviation in total,” Buskhe said. “So, I think with the skills
Purdue has, it fits into the plans we have for the future and the plans
we have for activities in the United States. … Because we are looking
not just five, 10 years ahead. We’re looking a hundred years ahead. … We
will be around.”
In the short term, Buskhe said Saab is on a tight timeline to produce its part of the new jet.
In September, a Boeing-Saab partnership won a $9.2
billion contract with the U.S. Air Force to produce the Boeing T-X, a
jet designed to train fighter and bomber pilots. According to media
reports, the Air Force intends to buy 351 of the Boeing T-X jets in the
program’s first phase, with the first aircraft expected by 2024 and a
full fleet coming by 2034.
More: Newman Road’s rustic underpass slated for overhaul to clear way for Purdue aerospace jobs
More: Purdue adds 250-bed ‘luxury’ apts, retail space as next up in west campus plan
More: Purdue plans single-family homes, second project in as many days for $1B west campus district
According to Purdue, Saab’s West Lafayette facility –
expected to be under construction in 2020 – would produce “major aero
structures for the T-X.” Saab’s 300 jobs are among the 17,000 across a
handful of companies – including Triumph Group, General Electric,
Collins Aerospace and L3 Technologies – collaborating on the T-X
project, according to Purdue.
Buskhe said Saab more than two years ago committed to
finding a spot in the United States for the T-X production. The search
began in earnest in September, Buskhe said. Daniels said Purdue joined
the talks late in 2018. Scott Walker – the Greater Lafayette Commerce
president and CEO, who wore a bow tie in the blue-and-gold colors of the
Swedish flag – gave a similar time frame.
Buskhe said Saab looked at its U.S. operations in New
York, North Carolina and Florida, as well as other potential new sites
in the United States. Buskhe talked about working with Holcomb, the
Indiana Economic Development Corp. and community leaders, who showed
Saab a level of cooperation and how the company would fit in West
Lafayette. He said Saab found a sense “of home” in West Lafayette.
“These folks work fast,” said Daniels, who was in his
share of on economic development announcements during his eight years as
governor. “I’ve been in some of these that took years and years. This
was not one of them.”
Construction and hiring are expected to begin in 2020,
according to Saab. Jobs will include airplane mechanics, engineers and
those on the assembly line. Buskhe did not commit to salary ranges on
“We are known to take care of our people,” Buskhe said.
“We will expect a lot, of course. … It’s also important for us to be
part of the community. And I think that’s connected to how you pay your
people working for you.”
Saab has been promised incentives to come to West Lafayette.
The Indiana Economic Development Corp. will offer Saab up
to $3.9 million in tax credits and up to $1.15 million in training
grants, conditional on the company coming through on its promise of
jobs, according to Purdue. The state also will offer up to $200,000 in
conditional tax credits from the Hoosier Business Investment program.
Other local tax abatements and incentives – some of which
were still in the works as of Wednesday morning – have been offered by
West Lafayette, Lafayette, Tippecanoe County, Greater Lafayette Commerce
and the Purdue Research Foundation, according to Purdue.
Lafayette Mayor Tony Roswarski said his city was ready to
commit $350,000 in training funds. The West Lafayette City Council will
consider five years in real estate tax abatements and 10 years of
breaks for personal property, Erik Carlson, West Lafayette development
Roswarski said Lafayette had plenty to gain from the Saab
plant and that he was comfortable with the city’s investment in it,
even if the facility would be across the Wabash River. The mayor was
part of tours to show what both cities had to offer, even stopping by
the giant water slides expected to be ready this season at Columbian
Park’s Tropicanoe Cove. (“Hey,” Roswarski said, “these guys are going to
have kids who want to swim, too.”) Dinner with officials from Saab,
Purdue and the cities the night before the announcement was a Teays
River Brewing, a year-old public house in Lafayette.
Purdue University announced
Wednesday, May 8, 2019, that Saab will build a $37 million plant just
west of the West Lafayette campus to do work related to the Boeing T-X,
the U.S. Air Force’s next generation training jet. The Saab plant is
expected to bring 300 jobs.
“It was important that we sold the whole region, not just
one city over the other or just Purdue,” Roswarski said. “This was a
whole community effort, and I think it showed.”
The Saab news comes on the heels for a flurry of
announcements in the past week for the Discovery Park District, which
Daniels has been pushing since 2016 and where planning started in
earnest in 2017.
Last week, PRF announced two Discovery Park District projects on back-to-back days.
The first, from Indianapolis-based Browning Investments
and J.C. Hart Co. of Carmel, included 250 apartments and
15,000-square-feet of street level retail space along State Street, near
McCutcheon Drive, expected to be ready in 2021.
The other was what Carmel-based Old Town Design Group was
calling Provenance, a subdivision along Airport Road, south of State
Street, that eventually could have 130 single-family homes, 100 to 150
townhomes, apartments and light retail, along with ground carved out for
a school or library.
Those follow construction, already underway, of Aspire,
an 835-bed apartment complex at State Street and MacArthur Drive; and a
145,000-square-foot, five-story office building, called Convergence,
just off State Street and near Aspire. The Purdue Technology Center
Aerospace – often referred to as the Rolls Royce building – was finished
nearly three years ago at the corner of Indiana 26 and U.S. 231 before
Discovery Park District was announced two years ago.
In April 2018, when Purdue alum Edmund Schweitzer III
announced that Schweitzer Engineering Laboratories, his Pullman,
Washington, electric power research company, would build a
100,000-square-foot facility – expected to bring 300 jobs – Daniels
called it a “breakthrough moment” for the Discovery Park District.
Schweitzer Engineering Laboratories, near the corner of U.S. 231 and
Indiana 26, was the first job-creator in the district – the “work” in
the district’s live-work-play concept.
On Wednesday, Daniels was talking in similar terms about Saab.
“We took a risk,” Daniels said about the west campus
plan. “I don’t know another university or town-and-gown partnership like
it. Today, I think, gives us a lot of confidence that that was a
thoughtfully and properly calculated risk.”
Daniels added: “I’m greedy. I want more. It makes us eager to find the next big step.”
As for the business at hand Wednesday at Purdue Airport’s
Hangar No. 8, Daniels spoke directly to Buskhe: “We’re determined to do
what we can do at Purdue to make this the wisest business decision
Saab’s ever made.”
Reach Dave Bangert at 765-420-5258 or at email@example.com. Follow on Twitter: @davebangert.
Published 5:46 PM EDT May 8, 2019
Real estate agent Joe Lackner is well-versed in the Garfield Park neighborhood.
knows to talk up the elements that make the south Indianapolis area
special: the strong community, the summer farmers markets and the
popularity of First Friday at the Tube Factory.
another major upcoming amenity is poised to bring even more attention
to the area: the Red Line. Lackner said the bus rapid transit
system, which will run down Shelby Street from Fountain Square, cutting
through Garfield Park and Bean Creek, has “added to the frenzy” of the
have already seen the values in Garfield escalate considerably due to
the high prices in Fountain Square and now Bates-Hendricks driving first
time buyers our way,” he said.
(Photo: Michelle Pemberton/IndyStar)
Construction materials are laid out down College Ave. in Indianapolis as construction crews build infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
said the last two homes he sold in Garfield Park had multiple offers in
less than one day. Some homes that are priced right and in good
condition will go before he can even put up a sign. Three years ago,
these homes were priced at an average of $90,000. Now they are selling
for $130,000 or more, Lackner said.
The 13-mile bus rapid transit (BRT) corridor runs from Broad Ripple down to the University of Indianapolis, passing by plenty of single-family housing along the way, particularly on College Avenue and the south side. In general, experts expect the Red Line will have a positive effect on home values along the route.
Wertz is a senior associate for Greenstreet Ltd., an Indianapolis real
estate development, brokerage and consulting firm that helped IndyGo and
the Indianapolis Metropolitan Planning Organization (MPO) determine the
locations for Red Line stations. Wertz said she believes once
neighborhoods develop the right mix of amenities, which can include
transportation, housing prices will likely increase.
2018, the Metropolitan Indianapolis Board of Realtors (MIBOR) and
MPO conducted the Community Preference Survey, reaching 2,163 adults in
central Indiana aged 18 or older. Results showed that most respondents
had little interest in living in residential-only areas and preferred
living in mixed-use neighborhoods with amenities like shops and
Twenty-seven percent of respondents were satisfied with the availability of public transportation where they live, while 34 percent were pleased with the shops and restaurants within walking distance of their homes.
we’re seeing in the market both national and locally is a rising demand
for places that are walkable and mixed-use with mass transit places,”
she said. “We don’t have a lot of those places.”
An amenity for buyers
Creamer, a real estate agent with Century 21, said some of his clients
purchased homes specifically to be close to the Red Line. He points to a
couple from Chicago who frequently rides public transportation and
looks at the BRT as a plus.
He said the average
price of a home on College Avenue three years ago was $205,000, while
the average price in the last 12 months was $247,000. Creamer believes
some of that increase is directly affected by the opening of the Red
“The market has been good,” he said. “There
are so many desirable businesses on College (Avenue), mostly
community-oriented restaurants and pubs that people can walk to.”
said the Red Line construction hasn’t deterred certain home buyers, who
are looking to the long term and making decisions based on what the
area will eventually look like.
purchase a home or even lease, looking at the next 5 years purchase,
that construction is obvious, some people know it’s coming for sure, for
those people want to get downtown IU medical center, know they can get
on it this coming September.”
Chris Pryor, vice
president of government and community relations at MIBOR, said he sees
similarities in the Red Line to the development of the Monon Trail,
which saw a 10-mile stretch in Indianapolis completed in 1999, and
Cultural Trail, which was finished in 2013.
they were proposed, people objected to them and thought they would have a
negative impact on property values,” he said. “The opposite has been
true for those, and it’s seen as a premium for homes on those trails or
in close proximity.”
Few construction concerns from buyers
Stewart, an independent broker, is selling a property on College Avenue
and 55th Street with an asking price of $225,000. While there’s
construction out front, he hasn’t run into any issues.
thought it was going to have more of an impact than it has,” he said.
“We’ve been listed for about five months and I haven’t had one negative
He thinks most prospective buyers understand the location and go into showings well aware of the construction.
been in the business for over a decade, and see things like this as a
big plus,” he said. “It’s a big pain in the butt while they do the work,
but you’re seeing the benefits in the long term.”
(Photo: Michelle Pemberton/IndyStar)
Construction cones sit around a sewer grate along College Ave. in Indianapolis where construction crews are building infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
Lavengood, real estate agent for Plat Collective, said the increase of
average sales price from 2017 to 2018 was 10.5 percent for College
Avenue and the two blocks on either side of the street. The days a
property was on the market also decreased.
personally purchased a commercial property on Central Avenue and 38th
Street that will become her new office, and she said its location on
both the Red and Purple lines were factors in her decision.
moving into neighborhood are really aware of Red Line project and
excited about it,” she said. “For the most part, people moving in are
planning to use it in some capacity.”
Stewart has a
different take. He said home buyers in the area purchasing homes of
“$200,000 or more” are “typically not going to be bus riders.”
Will homeowners use the Red Line?
current homeowners are also skeptical. Perry Hammock, 65, has lived
on Central Avenue and 54th Street for 30 years, and he is only a few
blocks away from the Red Line.
“I don’t see the Red
Line in any way helping my property value,” he said. “You can take the
bus Downtown now and the (Red Line) might only save you five minutes. I
don’t know if it will help change much at all.”
for riding the Red Line himself, Hammock doesn’t see many reasons why
he would use it. He said he wouldn’t be able to get directly to some of
the places he usually goes Downtown, and it would only take him a few
more minutes to drive.
For others, the uses of the Red Line seem clear.
Treat, 31, purchased a home in March 2017 on 49th Street and Guilford
Avenue, which puts him several blocks away from two Red Line stops. He
and his wife supported the 2016 public transit ballot referendum that increased income taxes to help fund the Red Line.
excited about the Red Line potential to build up the transit corridor
developing along College (Avenue), which adds significantly to our home
values,” he said. “Having more options to get around the city attracts
more diverse more people to the area. That will also bring more
development and more stuff to do, more restaurants and more things we
want and need in the neighborhood.”
He and his wife
work at IUPUI and drive separately because they have different
schedules. They don’t currently use the bus because “it’s unreliable for
a Downtown commute,” and he said it would take him “over an hour” to
get to work.
He also sees the Red Line as a positive for the overall community.
who don’t have cars currently rely on underfunded and unreliable bus
system,” he said. “This has the ability to reach more jobs, which will
possibly increase their ability to earn. I don’t look at it as something
just for people who currently drive.”
How BRT has affected other cities
number of real estate agents and housing experts are optimistic about
the bus line attracting buyers and potentially raising housing prices,
particularly on or near the route. Sean Northup, deputy director of
MPO, believes there will be a positive impact.
is a market enhancer, not necessarily a market maker,” he said. “Based
on observations from other cities, we absolutely expect more buyer
interest closer to the corridor, and we’ll probably see higher prices
after the transit line is built than before.”
(Photo: Michelle Pemberton/IndyStar)
Construction materials are laid out down College Ave. in Indianapolis as construction crews build infrastructure for the Red Line bus route on Thursday, March 28, 2019. The Red Line will run from Broad Ripple to downtown Indianapolis, to the University of Indianapolis and more.
2017, the National Institute for Transportation and Communities
(NITC) published a study from the University of Florida that focused on
single-family home sales near the Lane Transit District’s Emerald
Express BRT service in Eugene, Oregon. For every 100 meters closer to a
station, researchers found an increase of $823 to a home sale’s price in
2005, $1,056 in 2010, and $1,128 in 2016.
Cleveland Regional Transit Authority has also been beneficial to home
values, according to a 2019 study from Cleveland State University. The
GCRTA features buses, including BRT, light rail and trolleys. The
study discovered neighborhoods that gained transit saw a 3.5 percent
increase in property values within a decade. It also found that
employment increased by 3.1 percent, and poverty decreased by 12.9
Wertz said that national research shows
that most of the increase of property values tends to happen from when a
transit line is announced to when it opens. But Indianapolis might be
“Indianapolis is not known for its
transit system, so it may take longer for people to see the benefits of
living on or near the transit line, in order to raise property values,”
Kellie Hwang is a reporter at IndyStar. You can email her at firstname.lastname@example.org. Follow her on Twitter: @KellieHwang.
Housing costs gobble up the largest share of Americans’ household income. Adding transportation costs to the mix takes an even larger bite. In Indianapolis, combined housing and transportation costs average 45% of the family budget, which limits economic mobility.
A broad-based coalition of community development organizations, local
government officials, philanthropic groups, neighborhood leaders, and
fair housing and transit advocates are collaborating on ways to
stabilize costs. They want to leverage the massive investment in the
Marion County Transit Plan to spur widespread community prosperity.
As an organization committed to creating conditions for working
people to be self-sufficient and meet basic needs without public or
private assistance, the Indiana Institute for Working Families (IIWF)
sees access to affordable housing near transit as a way to increase
economic mobility. “If we can build out our transit system and build
housing in a more strategic way, we help maintain self-sufficiency,”
said Jessica Fraser, IIWF director.
Fraser is concerned that many families are being stretched too far.
“Forty-one percent of renters in Marion County are spending more than
35% of their income on rent,” she said. “Almost 10% of households in
Marion County have no vehicle available to them.” Adding transportation
costs on top of housing costs can create more economic hardships.
“Families need to find affordable housing, transportation to work and
school, and make sure they are near access to food,” she said. “It’s
important to get both affordable housing and reliable transportation.”
INCLUSION AND AFFORDABILITY
Metropolitan areas around the country have leveraged investments in
transit by making changes to land use and zoning regulations to
encourage—and in some cases even mandate—that multi-family residential
developments include a percentage of affordable units. Called inclusionary zoning, such regulations are seen by advocacy groups like the Center for Transit-Oriented Development
as a way to “enhance community stability and sustainability and ensure
that low-income households are not isolated in concentrations of
However, this tool is not available in Indiana. In 2017, the Indiana
General Assembly passed legislation that precludes local units of
government from establishing equitable housing requirements without
prior authorization from the legislature.
Amy Nelson, executive director of the Fair Housing Center of Central Indiana,
said that because the General Assembly made inclusionary zoning
difficult to achieve, “We’re missing affordable housing from being
created. We don’t get an opportunity to say ‘it is a priority for us as a
community to insure there is housing availability for people who are
working and can’t afford the cost of being near their jobs.’”
The Indianapolis Neighborhood Housing Partnership® (INHP)
has taken a creative approach to circumventing Indiana’s legislative
roadblock. On February 5, INHP announced it had joined with Cinnaire,
a Michigan-based community development financial institution (CDFI), to
establish the city’s first equitable transit-oriented development
(ETOD) fund to insure that affordable housing is available near transit
“Inclusionary zoning is something we cannot be distracted by,” said
Joe Hanson, executive vice president of strategic initiatives for INHP.
“We have the ability to create environments for private and public
sectors to work together toward a common goal and find a way to help the
City leverage private-sector resources.”
The INHP/Cinnaire $15 million ETOD fund does just that. To build the
$3 million equity portion of the fund, INHP pledged $1.5 million of a
2015 Lilly Endowment grant. The City of Indianapolis committed $1
million in federal Community Development Block Grant funds, and JPMorgan
Chase’s PRO Neighborhoods program contributed $500,000. Hanson added:
“It doesn’t happen without Cinnaire.”
Rick Laber, Cinnaire executive vice president of new ventures, is in
charge of assembling $12 million in lending capital from banks as well
as for managing the fund. So far, First Merchants Bank, National Bank of
Indianapolis, Lake City Bank, and First Financial Bank have committed a
total of $5 million as lines of credit. “Community banks are motivated
to give back to their communities,” Laber said. This is part of their
corporate culture, and it also helps banks meet federal Community
Reinvestment Act (CRA) requirements. “Essentially what the CRA is saying
is, if you’re taking deposits from folks that live in your community,
you need to also make investments and loan products available as well,”
he said. That makes the fund a powerful CRA tool for banks. “They might
lose a little money on it or break even, but they get CRA credit and
that helps them with the regulators,” Laber said.
Such enlightened self-interest will likely help the fund reach its
goal of acquiring properties within a 15-minute walk radius of a transit
station, either to preserve or to spur the development of 1,000
affordable housing units. INHP’s Hanson said, “We’re looking for sites
that can sustain mixed-income and mixed-use like first-floor retail that
provides resources to the community.” INHP won’t develop the sites, he
said. “We will sell to anyone that can deliver the affordable housing.”
Two properties have already been acquired along the Red Line—one near
Garfield Park and the other just south of Fall Creek on Illinois
Street. Hanson said INHP is optimistic ETOD will help reduce
transportation costs for households and improve their quality of life.
“Insuring that low- and moderate-income families have access to safe,
affordable housing and high-quality transit provides tools for true
economic mobility,” he said. “If they have access to affordable housing
and quality transit, it opens more doors to jobs, education, health
care, and food.”
INHP’s focus will be on properties in proximity to bus rapid transit
lines that are already generating interest from the development
community. The Federal Transit Administration has identified a national
trend: Once a major transit infrastructure investment is announced, it
sends a signal to the development community that prompts private sector
investment (see infographic). Such interest drives up acquisition costs
that in turn make affordable housing projects less likely. INHP’s Hanson
said the timing of the ETOD fund announcement was deliberate. “We
wanted to get ahead of the trend so we could ultimately maximize the
opportunity to help low- and middle-income families.”
TRANSIT ORIENTED DEVELOPMENT
During his time working with IndyGo on the Marion Transit Plan, Oregon-based transit consultant Jarrett Walker
said that one of the goals of expanded transit service is to provide
citizens of all ages, abilities, and incomes with improved access for
everyday needs. “A complete transit network provides liberty and
opportunity to so many people,” he said in an interview. “Transit’s a
Walker’s work here focused on encouraging IndyGo to create a complete
transit network. “The Red Line is a great thing. You’re getting a lot
of federal money to build it. The fact that you’re getting it in Midtown
doesn’t mean somebody else loses,” he said. “Transit succeeds precisely
because there are other people who benefit from it. That’s what gives
it the ridership. Transit achieves high ridership by being useful to
lots of people, not to any particular kind of person. High ridership
arises from diversity.”
He added that one of the potential benefits of the Marion County
Transit plan is that it can spur the development of apartment buildings
with fewer parking spaces. “That may sound technical but it makes a huge
difference because if you build less parking you can build more density
and make those units more affordable.”
Zoning regulations mandate the number of spaces required even if those spaces are unused. According to a report [PDF]
by Gary Cudney, senior vice president at the engineering firm WGI, the
2018 median construction cost for a new parking garage was $20,450 per
space. That does not include the cost of land and other project soft
Walker observed that this expense is one that tenants end up paying
for. “One of the keys to affordability and one of the things the
community should be advocating for, if it wants affordable housing, is
housing with less parking,” he said. And for such developments to work,
Walker said they must be located in proximity to a transit stop.
Sean Northup, deputy director of the Indianapolis Metropolitan Planning Organization,
was instrumental in hiring Walker, so it’s no surprise he agrees about
parking. “Parking is totally the enemy of affordable housing,” he said.
“Around transit, you have an opportunity to make a big impact if you’re
not assuming that every unit needs one or two parking spaces and every
resident is driving.”
Northup said that early in the Marion County Transit Plan process, a
land use analysis informed station placement. “Now the stations are set
and it becomes a conversation about what’s allowed to happen,” he said.
But to unlock the development potential, it requires making the case to
property owners that their properties are more valuable because they’re
located in proximity to a transit line.
Making that argument one property at a time is a recipe for
frustration. Another route taken by other communities is to introduce an
overlay district for multiple parcels. The effect, Northup said, is to
change “use by right” zoning in all land within proximity to transit
stops to encourage walkable, mixed-income, mixed-use developments. “The
great irony of this is that the purple, blue, and red [BRT] lines are
all located in historic transit corridors, and what’s built there now is
currently illegal,” he said. He noted that if one travels the BRT
corridors today there are taller buildings built to the corner with very
little parking; lot coverage with no side setbacks; and wide sidewalks.
“All of the kinds of things that are really in demand and easy to use
if on foot are illegal,” he said. Obtaining the necessary variances
under current zoning can add an entire year to the development process
and cost thousands of dollars.
THE “D” WORD: DENSITY
While property owners might be encouraged by beneficial economic
impact, neighborhoods can be uncomfortable with infill developments that
encourage density—the mix of uses and population that transit serves so
well. The frequent refrain is, “Do we really need more apartments?”
To which Katie Wertz replies, “Really, Indianapolis is not building
enough housing overall at every price point.” Wertz is a senior
associate at Greenstreet, Ltd., a local real estate development,
brokerage, and consulting firm that recently completed a market analysis for the Metropolitan Indianapolis Board of Realtors® and the Builders Association of Greater Indianapolis.
“What we found is that people are now choosing to find housing, and
then look for a job. If we’re not building the right kind of housing,
they’re going to go elsewhere,” she said. That makes it harder for Indy
to attract and retain new residents. “One of the links to transit
oriented development is when we build housing in a more compact,
walkable place, it not only helps an underserved market, but also saves
money for the City and generates higher revenues so we can add
streetlights, upgrade parks, and pave roads,” she said.
Housing demand in Indianapolis is also noted in Harvard University’s Joint Center for Housing Studies annual State of the Nation’s Housing
report. It found that “a growing number of low-income renters are
competing for a shrinking number of low-rent units and rapid growth in
high-income renters over the last 10 years has outnumbered growth in
Daniel McCue, a senior research associate at the Joint Center for
Housing Studies, worked on the report, which tracked housing stock and
demand. “As we looked through the data we saw a story across the nation
of the loss of low-rent units,” he said. Another story McCue saw was the
growth in high-income renters, which happened after the housing
downturn, as well as long-term growth in the number of low-income
McCue said what the data shows for Indy in terms of demand is both
high growth in the number of low-income renters and strong growth in
high-income renters as well. “I think that is partially explaining why
it seems all of the new developments are high end,” he said. “There is
demand at the high end and it’s really spurring this rental
The Indianapolis Neighborhood
Housing Partnership has launched a loan fund intended to create and preserve
affordable housing along the city’s public transportation lines.
The $15 million Equitable Transit-Oriented
Development Fund was launched in collaboration with Michigan-based Cinnaire, a
community development financial institution with offices in Indianapolis, which
will manage the fund.
INHP will be the fund’s sole borrower and
will acquire existing buildings or vacant or underused properties, with the
goal of maintaining or developing mixed-use, mixed-income housing.
The ultimate objective of the fund is to
preserve or spur development of 1,000 affordable housing units within close
distance of an Indianapolis transit stop over the next five years. The units
would be leased to eligible tenants.
“We believe everyone should have equal
opportunity to live in a neighborhood with easy access to employment, health
care, child care, education, food and support services,” said INHP president
and CEO Moira Carlstedt.
John Marron, director of strategic
planning for IndyGo, said the fund would help “ensure housing costs remain
affordable in locations with easy access to transit” as the IndyGo bus service
undergoes an expansion in Indianapolis with an increase in service and creation
of three bus rapid transit lines.
The fund is composed of $12 million in
lending capital from First Merchants Bank, National Bank of Indianapolis, Lake
City Bank and First Financial Bank. It also has $3 million in equity funding:
$1.5 million from the INHP, $1 million from the city of Indianapolis and a
$500,000 grant from JPMorgan Chase. The fund already has $5 million in lines of
credit contributed by banks; and the rest is in various stages of closing,
according to INHP.
The idea of the fund is to give the INHP
access to more low-interest financing to complete more projects.
Rick Laber, Cinnaire’s executive Vice
President for new ventures, said he is encouraged by the initial interest from
banks to participate in the fund.
“This couldn’t happen without the bankers
having a heart for the mission of what we’re talking about,” Laber said. “This
needed to be low-cost, patient capital. The banks have stepped up with
low-cost, patient capital.”
The city of Indianapolis’ contribution
comes from Department of Metropolitan Development funds, according to a city
“Today is a fantastic day for the city of
Indianapolis,” Mayor Joe Hogsett said. “This tremendous partnership will make
our city a more equitable city, a more thriving city, and … one that is a prime
example of a public drive partnership done well.”
So far, INHP has acquired two properties
using the fund, 401 Southern Avenue near Garfield Park, and 2163 N. Illinois
St., which is north of downtown. Both stops are close to future IndyGo Red Line
“We’ll see activity on these parcels
hopefully soon,” said Carlstedt.
The initiative comes as the result of an
idea INHP heard during the community visioning process called Plan 2020 from
Indianapolis resident Gary Reiter, who thought the city had a problem with a
lack of affordable housing, especially around transit routes.
INHP then conducted studies that showed
his hunch was correct. It also found that transit and housing costs were eating
up an average of 46 percent of Indianapolis residents’ income.
“The vision he had was to combine the
ever-growing transit system with the problem he saw as a shortage of affordable
housing,” said Joe Hanson, INHP’s executive vice president for capital
development and strategic initiatives. “This tool is intended to address both
of those challenges. It addresses the lack of supply of safe, decent affordable
housing but more importantly, aligns that with high-quality, frequent, reliable
transit. It’s about creating those opportunities for inclusive economic
Carlstedt said the fund was also made
possible because of a $26.6 million grant in 2015 from the Lilly Endowment to
INHP, which helped fund INHP’s contribution.
“They said to the board and staff, ‘Seize
opportunities, be innovative and do more of what you do well,’” Carlstedt said.
“The equitable transit fund is an example of seizing opportunity and being