New Indiana law designed to level playing field for affordable housing
INDIANAPOLIS (WISH) — A new Indiana law was designed to give nonprofits that work to provide low-income housing a fighting chance against big out-of-state investors.
Those investors’ buying of property and hiking up rent has become an increasing trend in Indianapolis, some say.
“The tax lien sale has become … it’s an investment tool,” said Mickey Rogers, deputy treasurer of operations in the Marion County Treasurer’s Office. “There are institutional investors, people who do this across the country, who come forward with very deep pockets and buy up dozens and dozens of liens.”
Rogers says the new law doesn’t prevent out-of-state investors from buying property but, instead, carves out a cap of 5% of properties that are available for tax lien sale and specifically targets those homes owned by a corporation or limited liability corporation.
“They’re nine townships in Marion County; this would kind of create a 10th township,” Rogers said. “Before this legislation, because they (the nonprofits) were pushed out of that (tax lien sales), they would typically have to wait for what we then call the surplus sale, which is properties that didn’t sell in a tax lien auction.”
Rogers tells I-Team 8 that waiting for the surplus sale gives more opportunity for homes to decline in value.
“By the time those nonprofits are able to get their hands on these properties for rehab and for conversion to housing, they’re so far gone that it’s not helpful for them,” Rogers said.
Elan Daniel, chief executive officer of Mapelton-Fall Creek Community Development Corp., is thankful for the new law. “This specific bill helps us because acquisition can be a major cost, especially when those prices are going up so quickly within the real estate market.”
Daniel took I-Team 8 through a newly renovated, Mapleton-Fall Creek neighborhood home that is for households consider to be low-income. He says the average price for a home in Mapleton-Fall Creek is $200,000, with some home reaching upward of $400,000.
Five years ago, homes in the neighborhood would easily have been from 20% to 25% less in price. “The values here have exploded,” the Mapleton-Fall Creek CEO said. “I think the law itself accomplishes the goal that it set out to do. But I’d say, as a start, we need more investment in affordable housing.”
The deputy treasurer says not all nonprofits will meet the new law’s qualifications. It is only for nonprofits that have had a “background and track record experience in creating low- to moderate-income housing.”
Rogers says the next step is for the Marion County treasurer to work with county commissioners to develop policies and procedures so that nonprofits can get authorized and then have the list of properties forwarded to them.