Development is booming in Greenwood with more and more warehouses popping up east of the highway and more and more neighborhoods being added, but rising housing costs have made buying a home in the area increasingly difficult for the average worker.
In the last five years, single-family home prices in Greenwood skyrocketed, up more than 38% since 2015 when the average was $180,000, to nearly $250,000 in October, according to Zillow. And Zillow predicts housing prices will continue to rise, with another 8.5% increase expected next year.
But while housing prices climb, the average annual household income sits at about $55,000 in the city, and $68,000 in the county. MIBOR Realtor Association, a professional association representing central Indiana realtors, says an attainable mortgage should be no more than 3.5 times a family’s income. Based on that, the average Greenwood household should not pay more than $192,500, and few homes are available at that price point.
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Supply and demand a huge problem
When affordable houses do hit the local market, most sell very quickly, forcing interested buyers stretch their budgets.
Greenwood natives Courtney and Nate Weishaar, southside Indianapolis school teachers in their early 20’s, just bought their first home in their hometown. But with a price point of $200,000 or less, the couple’s options were few and far between.
“We went to see these houses and realized they weren’t enough for what they were priced at. We quickly, quickly realized there were barely any houses on the market,” Courtney Weishaar said.
Many of the houses the couple looked at were fixer-uppers priced higher than their worth, she said. They determined they needed to stretch their budget to meet their needs and see a larger variety of options.
“I can’t tell you how many people have told Nate and I, ‘You don’t want to be ‘house poor,’” Courtney Weishaar said. “We don’t want to be at that max end of the budget.”
The Weishaar’s found a home in late November after more than a month of searching and visiting at least six other houses. They had to increase their budget to $240,000, Courtney Weishaar said.
A large contributor to overpriced houses in the area is limited supply but increased demand, said Ron Rose, a Greenwood-area realtor who worked with the Weishaar’s. The $200,000 or less houses tend to be fixer-uppers, he said.
“Some of it is a bigger picture. I don’t know that there’s a way to solve it,” Rose said.
Greenwood Mayor Mark Myers echoed those concerns.
“There’s just not enough houses,” he said. “We have three different additions being built right now … but we just have to be patient and wait.”
Building codes, higher standards, fewer options
Architectural standards in Greenwood and Johnson County are another reason housing prices continue to climb.
“Ten or 15 years ago, you could build a vinyl village and almost reach out and touch your neighbor’s house. They just don’t allow that anymore, which I mostly agree with,” said Rose, a realtor with decades of experience in the area.
The standards for more attractive houses, in Greenwood’s case, require houses to be a certain size with more masonry such as brick and no vinyl siding. Density requirements call for larger lots. The city’s standards raise the price of a home significantly, said Christian Rector, director of land acquisition and entitlement for Arbor Homes, an Indianapolis-area developer with several neighborhoods in Johnson County.
For example, Greenwood requires single-family houses have masonry around the entire first floor, which adds at least $10,000 to a project, Rector said. Increasingly, the city and the rest of the county have been against using vinyl siding on homes for aesthetic and longevity purposes, he said. Switching to sturdier HardiePlank siding from vinyl is another $6,000 increase.
“Each individual requirement on its own is not necessarily a project-killer, but they can often add up,” Rector said.
Arbor Homes faced backlash from the Greenwood community in August when it tried to annex land to build two new neighborhoods, consisting of about 300 homes, in the Clark-Pleasant school district area. Plans called for 163 retirement homes on one 60-acre property along County Road 125 West, just south of the Timber Valley subdivision and Pleasant Crossing Elementary; and 78 single-family homes on the other 39-acre property at 3481 S. Honey Creek Road, less than a mile north of Tracy Road.
Arbor negotiated with the city, and met its requests for no vinyl siding and larger lot sizes, settling on a price of $360,000 for each home, which Rector said was a stretch for affordability in that area.
The community came out in droves against the subdivision, saying the area should be used for high-end custom homes, which would cost about $500,000 each, and Arbor Homes did not fit the area’s aesthetic, Rector said. In the end, the Greenwood City Council rejected the development, a common theme developers are facing when proposing new subdivisions in the county, he said.
“We would’ve loved to have been able to propose more in the $260,000 price point across the board, but we knew we weren’t going to get that approved. We tried to give that higher price point to do the best we could, but in Greenwood’s eyes at least, that still wasn’t good enough,” Rector said.
Myers supported the proposed subdivision, but he had no control over what the city council and community wanted, he said.
Arbor would like to build more affordable housing in the upper $100,000 price range, but Rector said there is nowhere in the county that would likely accept a housing development like that. He’s worked with Greenwood, Franklin and Whiteland, and all the local governments are requesting non-negotiable larger lot sizes and higher-end exteriors, he said.
Still, Arbor is working on a new line of starter homes that are more affordable with costs ranging from $150,000 to $190,000, Rector said. But he’s not confident Johnson County leaders will accept those types of developments.
“We’ve gotten to the level now where $250,000 is considered entry-level, affordable houses, but that still leaves out a whole lot of people who can’t afford that price point,” he said.
There is a market for custom homes in Greenwood, with roughly 8% of the population able to afford them, based on data collected by Arbor. But there needs to be diversity among housing for the local housing market to succeed, he said.
“Yes, there are not that many people who can afford that price point of homes, but I don’t think it should be one or the other. You need to be able to cater across the board,” Rector said.
Congress steps in to create incentives
U.S. Rep. Trey Hollingsworth, R-Indiana, was one of several Congress members who drafted the Yes In My Backyard Act this year, which incentivizes communities to reform zoning codes to allow more affordable housing to be built.
The Act requires cities that receive Community Development Block Grants to include in its consolidated plan reporting what the community plans to do about removing zoning rules on land that may block the possibility of building affordable housing.
Greenwood regularly receives federal block grants for a number of projects, including investing in local nonprofits such as The Social of Greenwood senior community and United Way of Johnson County.
Creating affordable housing is a priority of Hollingsworth’s that stems from talking to Hoosiers in the Ninth Congressional District, which includes Johnson County, he said.
“Many areas have significant barriers at a local level that inhibit supply of our housing stock,” Hollingsworth said.
Johnson County is no exception, having created barriers to affordable housing which could be detrimental to its communities, Hollingsworth said, adding that Congress and the YIMBY Act in no way controls what local governments do, but nudges leaders to get plans going for affordable housing.
It is no secret Greenwood specifically is booming with economic growth with Amazon, FedEx and soon-to-be Milwaukee Tool building warehouses there.
“If Johnson County is going to continue to compete for those corporate locations, new expansions, new manufacturing facilities, new jobs, then we’ve got to make sure there is a supply of affordable homes for people that can live close to their work,” Hollingsworth said.
The warehouses, which bring hundreds of jobs to the city, pay between $15 and $17 an hour on average. Almost 19% of Greenwood’s workforce is manufacturing and warehousing jobs, according to data from BestPlaces, and individuals with those salaries cannot afford a $250,000 house.
“Families in our state are spending a significant amount of money on housing as a percentage of their income … even if they can afford the housing, they are really stretching,” Hollingsworth said.
To address this issue, city leaders negotiate with companies such as Amazon and FedEx to hire employees at higher rates of pay, at least $15, Myers said. He doesn’t think Greenwood’s architectural standards inhibit building affordable houses in the city, he said.
“You’ll find 10 years down the road that the vinyl siding starts fading and cracking and sagging,” Myers said. “What we want is when somebody builds a house, we want it to stay in good condition … that’s really not going to help residents because when you’re in affordable housing, it’s hard enough to make your regular payments, let alone all the repairs.”
He is not against bringing more affordable housing to the city, and pointed to a new subdivision by Lennar Homes in the upper $100,000 price range. On the flip side, property taxes on a $250,000 home cover the costs of amenities such as parks and needs such as public safety, and lower-priced homes could hinder those services.
“When we build homes that are lower than that, we have to make sure we don’t put too many in because it’s going to drain down the services,” Myers said.
Communities need to strike a balance with housing, and Hollingsworth said local residents should keep an open mind about living next to affordable homes that may not “look as nice.”
“There’s so many that don’t want to live next to affordable homes, but I really want to push back against that. I want Americans to understand that the best part of this country is the diversity that’s in our fabric,” Hollingsworth said. “The people that start in those starter homes are the ones that will buy the estates 30 or 40 years down the road, but they have to start somewhere.”
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Greenwood homes
Average single-family home price (2020): $245,000-$250,000
Average household income: $55,000
Max home price with $55,000 income: $192,500
Single-family homes on the market Monday: 182
Single-family homes on the market under $192,500: 32
Sources: Zillow, MIBOR
Greenwood workforce
Manufacturing: 13.4%
Transportation and warehousing: 5.4%
Retail: 14.5%
Average pay for manufacturing/warehousing jobs in Greenwood: $15 – $17 an hour
Average retail salary: $25,000
Source: BestPlaces
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