MIBOR REALTOR® Association is the professional association that represents central Indiana's REALTORS®. MIBOR members serve home buyers and sellers in Boone, Brown, Decatur, Hamilton, Hancock, Hendricks, Johnson, Madison, Marion, Montgomery, Morgan and Shelby counties.
Update to Near Eastside Impact Study Showcases Continued Growth and Activity
In 2013, MIBOR released a study that focused on the impact made and growth potential on the Near Eastside fueled by the Super Bowl Legacy project, MIBOR’s Building a Living Legacy project and the Near Eastside Quality of Life Plan. With a real estate angle, the study focused on distribution of sales over the period of 10 years. What we uncovered, and what a lot of local media and even the federal government is now seeing, is a complete revitalization effort moving full steam ahead.
In adding another year of sales data to our research, we’ve seen even more progress and a new demand for upper level housing options. The 2012-2014 market splits into two groups – traditional sales at lower end but mostly above $10,000 vs. several sales at the very upper end. Upper end sales represent hidden demand released as a result of significant investment in housing redevelopment.
Anecdotal conversations with the Near East Area Renewal (NEAR) suggest that prices have reached a point where 2/3rds of NEAR’s current activity is for new construction rather than rehabbed units.
Much of the activity we’ve seen during this 2012-2014 time period was kick started with funding from the City of Indianapolis that has federal restrictions limiting the sales price to no more than $123,000 for a rehabbed home.
Demand from customers over the income and affordability limits of such funding has been so strong that several homes originally intended for subsidies were pulled out of the program to sell at unrestricted/market rate prices. One of these sales was for $148,000 and one is pending near $170,000. At those price points, unsubsidized, for-profit development is possible and the private sector can begin to takeover.
As we think about future activities and other areas of the city, this data raises an important question – given the pent up demand at much higher price points, why didn’t this type of activity happen on its own? Because the pent up demand, as strong as it is, isn’t sufficient to overcome the costs of new development on its own. In other words, these three new sales cost about $170k to construct and demand at that price point is only now becoming strong enough to create private sector activity.
How do we sustain and replicate this kind of shift? As we’ve seen on the near eastside it takes partnerships of all sorts – some partners focus on infrastructure investment, some on commercial development, others residential rehabilitation, and a variety of supportive services to address needs like homelessness to transform a neighborhood from one of significant decline and disinvestment to one where you can see the potential for the private sector to take off and create new market opportunities.
At the same time we see this general improvement in overall activity, it is important to ask how we avoid displacing longer-term residents. The homes that the REALTOR® Foundation funded are reserved for homeless families so even as those units have been rehabbed and residents have come and gone, they will continue to serve more disadvantaged families for the foreseeable future. Keeping a balance like that is important as growth continues in this sector of Indianapolis, and beyond.
MIBOR worked in partnership with the John H. Boner Community Center, Indy-east Asset Development Corp, and other partners for more than three years to renovate and/or build 32 homes, which (the number selected to represent 32 NFL cities) currently house 32 families coming out of, or on the verge of, homelessness. Each home provides permanent supportive housing on a continual basis with vital social services provided by the John H. Boner Community Center. In 2012, MIBOR members donated $500,000 to lift up an emerging neighborhood in a project called Building a Living Legacy: Centennial Project.
The Building a Living Legacy housing initiative was one component of the larger 2012 Indianapolis Super Bowl Housing Legacy project, which involved a series of major capital investments across Indianapolis' Near Eastside. The 32 new and rehabilitated homes were funded through a broad partnership involving the U.S. Department of Housing and Urban Development, the City of Indianapolis, the Indiana Housing and Community Development Authority and the United Way of Central Indiana.
What was the impact?
What were the results of this investment?
What have we learned and how does it apply to the future?