Framers Santos Orozco, top, and David Barrios work together to roof a new home off of County Road 500 North in Clay County on Friday. According to a housing analysis by Thrive West Central, only 4% of all homes in the region were made after 2010. The home is being built by Cornerstone Builders of Terre Haute Inc. Tribune-Star/Joseph C. Garza
New homes over $150,000 like this one off of Main Street in Seelyville are under-supplied in the region according to a housing analysis by Thrive West Central. Tribune-Star/Joseph C. Garza
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More new housing construction is needed in a seven-county west-central Indiana region to replace an aged housing stock, according to a housing analysis from Thrive West Central.
Thrive West Central announced in May it was undertaking the study and has now released its findings.
“Thrive’s Housing Analysis provides west-central Indiana with important information regarding our current housing climate,” said Ryan Keller, Thrive’s executive director.
The study, released last week, found:
• There is a mismatch within the housing market. Not only is there not enough housing to meet a conservative estimate of future demand, but the region is also currently significantly oversupplied in the lower half of the market, that is, homes selling for less than $150,000 or renting for less than $1,500 per month, and under-supplied in the upper half.
• A significant portion of existing housing in that lower end of the market is in poor condition and in need of repair or replacement.
• The market is not supporting sufficient new construction of the right variety, largely due to the fact that the high cost of new homes is hard to support in a region with median incomes that lag behind much of the state.
• Demographic changes will drive the future market for housing as the baby boomer generation fully reaches retirement age in the next decade.
The study looked at Vigo, Clay, Parke, Sullivan, Vermilion, Putnam and Montgomery counties. Montgomery County was included as the county has petitioned to become part of Thrive West Central. The county has not yet been approved by the Indiana Economic Development Association for coverage by Thrive, said Kris Krueger, Thrive’s interim director of economic and community development.
The study notes that the region’s population has been largely stagnant for the past century, “more concerning, the number of residents declined by 2.3% over the last 10 years, primarily due to residents migrating out of the region, reversing slight gains from the 1990s and 2000s. On its current trajectory, west-central Indiana is projected to continue steadily losing population over the next 30 years, declining by nearly 5% by 2050 unless the trend is reversed.”
That means the tax base is reduced and number of services, supported from taxes, would also be reduced. The study also states, in addition to a shrinking population, the region is facing an aging population, as the share of residents 65 and older is expected to grow from 17.4% in 2020 to 21.2% by 2050.
The region had 115,768 housing units in 2020, and “falls roughly in line with each county’s share of total population,” the study states.
About 71% of homes in the region are owner-occupied and 29% renter-occupied.
That renter-occupied rate is lower than the national level of 36% and lower than the state level of 31%.
Vigo County has a 37% renter-occupied rate, “likely explained by Vigo County’s large student population and lower incomes on average, two categories of people with a higher tendency to rent due to financial necessity or the desire of flexibility.”
Housing in the region “tends to be older on average, with 24% of housing in the region built in 1939 or earlier, which is 7 (percentage) points higher than the share in Indiana and more than double the U.S. share of 12%. The study said an estimated 4,992 units have been built since 2010 (4% of housing).
The breakdown for the region shows 24% of homes were built in 1939 or earlier; 16% built from 1940 to 1959; 24% built from 1960-1979; 22% from 1980 to 1999; 10% from 2000 to 2009: and 4% from 2010 or later.
Terre Haute Mayor Duke Bennett, in his city update in February, said the city has demolished 835 housing properties since 2008, with plans to demolish between 80 and 90 condemned properties using the city’s entitled funding from the U.S Housing and Urban Development.
This demonstrates a continued need for construction of new homes in vacant lots.
The study said median incomes across the seven counties are lower than the national median, with the exception of Clay and Putnam counties that have median incomes above the state level. About 15% of the region’s residents — more than 35,000 people — live below the federal poverty level and struggle to meet basic needs, including housing, based on U.S. Census data.
The study points to some projects across the state that have been done to attract new home building, such as in the city of South Bend.
In 2022, South Bend announced a program to help construction in empty city lots. It includes waiving a utility construction fee where five or fewer homes are built, with some development financed with low income housing tax credits or by a nonprofit. The program also offers up to $20,000 in reimbursement for the costs of connecting sewer laterals to low- and moderate-income homes.
Other tools include residential tax increment financing (TIF), signed into state law in 2019, that allows redevelopment commissions to create TIF districts for residential property to stimulate new housing construction.
There are also rehabilitation loans and grants for home rehabilitation from the USDA, Indiana Office of Community and Rural Affairs (OCRA) and the Indiana Housing and Community Development Authority that communities can utilize. The full analysis can be found on Thrive’s website at thrivewestcentral.com/ housing.
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