Franklin North Village apartment buildings are seen in 2018. A recent report from Prosperity Indiana and the National Low Income Housing Coalition says that many of Johnson County’s two-bedroom, market-rate apartments are unaffordable for those making less than $18.06 an hour.
Daily Journal File Photo
Apartments in Johnson County are often priced well above fair-market rates, and local experts have seen it first-hand.
Statewide, the fair market rent for a two-bedroom apartment for the fiscal year 2022 is $882, and the hourly wage full-time workers need to afford a two-bedroom apartment at fair market rent in Indiana is $16.97. In order to afford this level of rent plus utilities, without paying more than 30% of income on housing, a household must earn $2,942 a month, or $35,299 annually, according to a report from the National Low Income Housing Coalition and Prosperity Indiana.
At the state’s $7.25 minimum wage, around 94 work hours, or 2.3 jobs, are needed to afford a two-bedroom rental at the fair-market rate, the report says. While rent has risen, wages have not, as the minimum wage has remained the same since 2009.
How county rents stack up
In Johnson County, the hourly wage needed to afford a two-bedroom fair market rental is $18.06, which is the same wage needed for nearly all of the “donut counties” and Marion County, excluding Madison County, according to the report.
For the same counties, plus Madison County, around 100 work hours are needed per week at minimum wage to afford a two-bedroom, fair-market rate rental, according to Prosperity Indiana.
According to the group, the two-bedroom fair market rate for Johnson County is around $939. This means that an annual income of $37,560 is needed to be able to afford a two-bedroom apartment at the fair-market rate. At minimum wage, at least 2.5 jobs are needed to afford $939 in rent, data shows.
Johnson County’s annual area median income, or AMI, is $94,100, meaning that the monthly rent affordable at this income level is $2,353. At 30% of the AMI, $28,230, the affordable monthly rent is $706, the report shows.
There were estimated to be about 15,741 renter households in Johnson County, approximately 27% of all total households. In 2022, the estimated hourly mean renter wage is $14.29, and at this wage, the monthly rent affordable at the mean renter wage is $743, the report shows.
All of the rents represent the generally accepted standard of not spending more than 30% of gross income on gross housing costs, according to the report.
Local experts see effects
For Beverly Martin, vice president of Bridges Alliance of Johnson County’s board, the report shows exactly what Bridges Alliance staff have seen with their clients. Bridges Alliance works with Asset Limited, Income Constrained and Employed, or ALICE, households. ALICE is a term created by United Way Worldwide to define households that struggle to make ends meet but are above what is considered the federal poverty line.
However, what their staff have commonly seen is people who say they cannot get by on the minimum wage. If the minimum wage had followed inflation, it would be around $27, she said.
“Some of them are spending more than 50% of their income on housing when we’ve worked at no more than 30%. There’s a disproportionate climb in rents,” Martin said.
Martin, who is also a member of the alliance’s Big View team, has been very aware of Johnson County’s housing affordability and homelessness issues for 10 years. Recently, she stepped down from the board of KIC-IT, or the Kids in Crisis-Intervention Team.
Because people have to make around $18 an hour to afford a two-bedroom, market-rate apartment, what Martin and the alliance have seen are two people working about 50 hours each to afford just one apartment, she said.
The higher rent costs are also having a domino effect on the renter’s other expenses, including their ability to afford food and entertainment. Martin recently pulled data from across the county on food pantry usage, and it showed that the number of people using pantries has doubled from 1,600 to near 3,000, she said.
Another factor for high rent is that some housing developments that were Section 8 or Section 42, including apartments, have started to raise rents after meeting their 15-year obligation for offering low-income units, experts said.
During the 15-year period, the complex receives a tax credit, which can be extended for another 15 years if a complex does some renovations. In exchange for the credit, complexes are required to offer some units at a rate of between 30-60% of a person’s wage. However, across Johnson County, many of the complexes are reaching the 30-year point. Once a complex passes this 30-year period, it can raise the rents to market rates, said Nancy Phelps, a Bridges Alliance circles coach and a renter who has seen this first-hand.
“If somebody is on Social Security like I am — and I make $1,240 a month — you can do the math. That’s more than 30% of wages,” she said. “If you apply for a loan, you cannot pay out that much and expect to get a loan, so what this is creating is not having affordable housing.”
Both Martin and Phelps expect rents to continue to rise for the foreseeable future, and higher rents mean there will probably be more people doubling up in apartments in order to afford one. It will also put more people at risk for homelessness, Martin said.
Challenging stigma, conversations are key to changes
One of the biggest challenges to addressing affordable housing is the stigma around it. While Martin hopes people are becoming more aware of the need and benefits of low-income housing, she thinks the situation could get worse.
“If we can’t get past that and start building for that lower-income bracket, I see that situation getting worse,” Martin said.
Many people are uninformed and lack understanding about what equitable and affordable housing can do to strengthen a community. Many often say that they don’t want affordable housing built in their backyards, she said.
The lack of affordable housing, whether it be apartments or homes, is having a snowball effect that is not as easy to see. It affects everything from employers not being able to fill jobs at certain wages to people not being able to travel out of the county for a job due to how much other costs are, Martin said.
However, there are lots of people working very hard to solve this problem, she said. One of the biggest ways to help solve the problem is with broader community engagement.
The alliance’s Big View team is planning an open forum for people to educate themselves more on the topic and learn more about how it can affect an entire community. Both governments, community leaders and residents are trying to do this, but everyone needs to keep working on it to tackle the hard questions, she said.
The ultimate goal is for a community that connects all income levels with affordable housing. Community leaders talk about wanting communities for people to live, work and play, but not all people can get into the community’s housing market, including young people such as recent college graduates, Martin said.
“If people were to read the research across the country where they’re putting in alternative affordable housing, it strengths the whole community,” she said.
Phelps hopes that starting conversations about the affordable housing issue will spark something in people, especially those who may be more financially well-off than others, to try to put themselves in someone else’s shoes. People sometimes are afraid to ask for help, and this can cause things to not get done. Changing this cycle will help, she said.
“I’m ever an optimist that as a very strong community we can make this happen,” Martin said.
