INDIANAPOLIS — A new study published by Prosperity Indiana paints a dire picture for Hoosiers as the gulf continues to grow between renters’ wages and the rising price of rent leaving more and more Hoosiers either unable to afford housing or having to dedicate most of their income to keeping a roof over their head.
A roof they don’t even own.
“It feels like we are being set up to fail,” said an unhoused Indianapolis resident.
A study conducted by the National Low Income Housing Coalition (NLIHC) found that in Indiana, the price of a Fair Market Rent two-bedroom apartment is $988 a month. This means a renter would need to earn $19 an hour to afford the rent of a two-bedroom apartment (without spending more than 30% of their income).
But Hoosier renters only earn an average of $17.86 an hour, meaning most renters in Indiana are behind the eightball when it comes to housing wage vs renter wage.
Despite a reputation for being a low-cost state, Indiana actually lags behind its Midwest neighbors. Prosperity Indiana found that amongst Midwest states Indiana renter wages “remain persistently behind the average of the region.”
“Indiana has twin crises of a shortage of affordable homes and too few good-paying jobs to afford them,” said Andrew Bradley, policy director for Prosperity Indiana and board member of NLIHC. “This is a symptom of a lack of economic opportunity which prevents too many Hoosiers from achieving their true potential and leaves Indiana behind the curve of the Midwest.”
For the last six years, Indiana renter wages have lagged behind its Midwest brethren, dropping from 51 cents below its Midwest neighbors in 2020 to 91 cents below in 2023. All while rent continues to climb.
“The typical Hoosier renter working full time makes $1,893 less each year than their average Midwest counterpart,” Prosperity Indiana deduced.
Indiana’s position in the Housing Wage ranking of the entire nation has worsened as the state fell from 43rd least affordable state in the U.S. in 2021 to 38th in 2023.
The gulf between renter wage and housing wage exists in every one of Indiana’s 92 counties, the study found, as rent prices grew by 12% by wages only increased by 7.5%.
“The median renter wage in Indiana has consistently trailed the state’s Housing Wage in recent years, suggesting that policy efforts to date have been inadequate to fulfill the demand for affordable housing that remains out of reach for Hoosiers,” Prosperity Indiana stated.
Prosperity Indiana’s analysis found that in 2023, 11 of Indiana’s top 21 largest occupations didn’t pay a high enough median wage for Hoosier renters to afford a two-bedroom apartment.
In fact, seven of the top 21 occupations in Indiana didn’t even pay enough of a median wage for Hoosier renters to afford a one-bedroom apartment, which costs the average Hoosier $811 a month meaning they need a wage of $15.60 an hour.
In Indiana, the minimum wage remains at $7.25. It hasn’t been raised since 2008, when it was increased by .70 cents.
If a Hoosier only earned the minimum wage, they would need to work 105 hours a week to afford a two-bedroom apartment or 86 hours a week to afford a modest one-bedroom. This means Hoosiers would need to work 2.6 full-time jobs at minimum wage to afford a two-bedroom rental, or 2.2 jobs for a one-bedroom.
A father from New Albany told Hoosier Action that he has two adult children living at home.
“Both would like to move out of the house, but the rental properties available are too expensive for them to afford,” he said. “I do love my kids, and my wife and I might be labeled as “helicopter parents,” but that is not what keeps them at home—the high cost of rent keeps them at home. We need to do better for our citizens. I can’t imagine someone their age not having parents to live with as a backup plan. What are they doing for housing?”
A court watcher told Prosperity Indiana that she witnessed a tenant appear in court due to falling behind on their payments. The tenant said her rent increased by $300 and that she and her autistic son were unsuccessful in finding housing assistance. She was ordered to vacate the property in 13 days even though she had nowhere to go.
“Housing is a human right,” said NLIHC President and CEO Diane Yentel. “Stable, affordable homes are a prerequisite for basic well-being, and no person should face the danger of losing their home.”
“Too many low-income renters now face worsening housing instability, as wages stagnate, housing costs rise, and pandemic-era safety net programs close down,” Yentel added.
View NLIHC’s full report by clicking here.