KOKOMO — Daniel Cowgill made $22 an hour working at an Amazon fulfillment center in Whitestown. He made the daily one-hour commute from Kokomo while also working part time at a pub and as a delivery driver.
But that wasn’t enough to afford his apartment after he became injured two years ago and the building owner raised his rent from $675 to more than $800.
The 34-year-old found himself searching for another place to live. To his surprise, most rentals were booked, and the ones available were well outside his tight budget.
Cowgill wasn’t alone. Rental prices across Kokomo had skyrocketed, climbing from $730 to $877 on average from 2021 to 2023 for a two-bedroom apartment, according to data from the U.S. Department of Housing and Urban Development. Rates took another eye-popping jump this year to $980.
Today, Cowgill still can’t find an apartment. The Kokomo native said he is living in his truck and waiting to be approved for a federally subsidized housing-assistance voucher.
“If you live the perfect life and nothing ever comes up, yeah, you can afford those apartments,” he said. “But if you're a normal person and things come up … you don’t have a home.”
BUSINESS BOOM, HOUSING BUST
The irony is that the city is experiencing an economic boom, according to Cowgill. Two electric-vehicle battery plants are under construction, marking a $6.3-billion investment that will bring 2,800 jobs to Kokomo.
But that’s only made apartments more expensive and harder to find. The city has experienced one of the most dramatic rental increases in the state. Over four years, prices have climbed by 34%, according to HUD data.
Soaring demand for rentals has enabled many landlords to implement new requirements and policies to cherry-pick tenants. Some now demand a down payment of first and last month’s rent along with a deposit, totaling around $3,000 for a two-bedroom apartment, noted Cowgill.
“Who has $3,000 to put down for an apartment?” he said. “Once you get stuck in that cycle, you're really stuck, and it’s hard to get out.”
Rental and home prices in every city in Indiana have climbed since the pandemic. Years of underbuilding have led to apartment and housing shortages across the state, especially homes that middle-income Hoosiers can afford.
That, coupled with people staying in their homes longer, has led to a severely depleted housing inventory.
Over the last decade, the number of available living units has shrunk by a staggering 75%, explained Mark Fisher, CEO of the Indiana Association of Realtors. The state needs 25,000 more homes just to keep up with current demand, he noted.
But in areas like Kokomo with mega-development projects under construction, the situation is even worse. People flooding into the city for new jobs further tightens the housing inventory. Landlords know they can safely raise rents and still have a waiting list for those who need a place to stay.
Still, Indiana’s home and rental prices remain competitive with other Midwestern states. The median rent for all apartment sizes and all property types in Indiana sits at $1,450, far below the national average of $2,100, according to data from Zillow.com
But Indiana’s legacy as an affordable place to live is quickly eroding, Fisher explained. That’s evidenced by the number of people who now need help just to pay their rent.
Center Township, which encompasses nearly all of Kokomo, last year shelled out $465,000 in rental assistance — the highest amount in its history, according to township Trustee Andrew Durham. Many of those people have jobs but still struggle, because of soaring prices, to make ends meet.
The number of low-income families provided with federal vouchers for subsidized rent by the Kokomo Housing Authority has shrunk by nearly 16%, dropping from 1,080 to 900 over the last year. Rising housing costs shorten the reach of the housing authority's budgeted funding, explained Executive Director Derek Steele.
“Seeing that rate increase over the last two years — it's staggering,” he said. “It's just caused us to be able to serve fewer people.”
COMPANIES EXPRESS 'HUGE CONCERN'
A lack of affordable housing is also weighing on the minds of companies interested in building in Indiana, argued Sara Coers, associate director of Indiana University’s Center for Real Estate Studies.
Expensive housing means it could be hard to attract out-of-town workers to fill new jobs, and employees struggling to pay their rent or mortgage often don’t perform as well, she explained.
“I have employers reaching out to me and saying, ‘This is a huge concern for us,’” Coers said. “They want to be able to keep people, and they also know that housing security is a crucial piece for stability at work.”
That issue has taken center stage in St. Joseph County.
Last year, General Motors announced it was partnering with Samsung SDI to build a $3.5-billion battery plant that will eventually employ 1,600. That was followed in April by Amazon committing $11 billion to construct a data center, creating at least 1,000 new jobs.
Both projects will be near New Carlisle, about 15 miles west of South Bend.
In total, the area will likely see up to 3,500 new jobs over the next 5-10 years, according to Bill Schalliol, director of the county’s economic development department.
The hitch is that St. Joseph County needs a massive influx of new, affordable housing for middle-income residents to meet the demands of its rapidly expanding workforce.
National developers willing to construct those kinds of large-scale housing additions are hard to find, explained Schalliol, and local developers have only enough resources to build a handful of homes a year.
“You can't stock up for 1,600 jobs at GM if you're building six-to-10 houses a year,” he said. “We're now seeing that if we want housing to meet scale, we're going to have to go out and look for it.”
Complicating matters, short-term and long-term rentals have filled up with construction workers arriving in the area to build the new plants, leaving even fewer options for low-to-middle-income people, Schalliol noted.
Some companies such as Cook Medical in Owen County have taken matters into their own hands. Cook in 2022 announced it was building 300 for-sale homes just across from its facility in Spencer to address both the lack of housing availability and affordability for workers.
Those company-led efforts are an exception, Coers emphasized. Most businesses expect cities and counties to attract new housing developments in order to meet their workforce needs.
But in a construction market where it’s become nearly impossible for developers to make a profit on a starter home selling for under $200,000, local governments are in a bind, she said.
“Our housing market is just so out of whack right now,” Coers said. “I would call it a crisis-level supply and demand mismatch.”
WHERE JOBS SLEEP AT NIGHT
Since the pandemic, state and local officials have moved quickly to incentivize more housing construction.
Indiana’s READI grant program in 2021 issued $500 million to communities across the state. Nearly half of the funding went toward building new housing, noted Fisher with the Indiana Association of Realtors. The state in April awarded another $500 million in READI grants to 14 regions.
In July, 10 communities received in total $51 million to build out infrastructure such as sewer, water and sidewalks to make sites shovel-ready for new housing. State officials said the first round of funding from the newly created Residential Housing Infrastructure Assistance Program will support the construction of 2,400 homes.
In Kokomo, the city has started the process to offer forgivable loans and tax incentives to a slew of recently announced housing projects to ease the financial burden for developers. One project receiving a loan is being built near the new battery plants and includes townhouses, apartments, commercial retail and a hotel.
Schalliol in St. Joseph County said officials there are weighing all options to attract new housing developments to meet the workforce demands brought by GM and Amazon. That includes large-scale subdivisions made up of pre-manufactured homes that middle-income workers could afford.
“We’re looking at the creative things that other communities are doing to figure out how you bring some of these developers into the market and get them to build at an affordable price point,” he said.
Fisher said that kind of all-hands-on-deck approach from state and local officials is critical to bolster the state’s housing inventory and ensure cities and towns take full economic advantage of the new, job-creating facilities coming to Indiana.
“Houses are where jobs go to sleep at night,” he said. “No houses, no people, no jobs.”
But for Cowgill, who remains homeless in Kokomo due in part to skyrocketing rental rates brought on by the housing shortage, the city’s new apartments and townhomes won’t come fast enough to provide relief.
When those housing projects are completed over the coming years, it’s still likely he won’t be able to afford them by working the kinds of entry-level jobs for which he would qualify, Cowgill argued.
For now, he sees sleeping in his truck and waiting for a federal housing voucher as his best option.
“It's not like you can just go somewhere else and it'd be cheaper,” Cowgill said. “Prices are up in every town. Right now, it just feels like it's more of a burden to live in Indiana than a blessing.”