Indiana housing stock at risk of corporate investment, according to national assessment

Indiana is at a higher risk of private, out-of-state companies buying up housing stock, according to a new national analysis.

It also finds the trend may influence the affordable housing crisis in Indiana as the gap continues to grow.

The Private Equity Risk Index assesses state policy to determine how private equity groups have opportunity to impact factors including housing and health.

The most recent index gives Indiana a high risk score and said the state is one of the top ten for the share of single-family homes purchased by corporate investors.

Prosperity Indiana Policy Director Andrew Bradley said the state's failure to pass legislation to hold landlords accountable is a factor.

“I think in the bigger picture, that incentive that the state provides by not enforcing housing, health and safety standards, allows these out of state investors to come in, buy up properties. And then basically that's the last investment they make,” Bradley said.

He says that leads to a depleted housing stock. Instances where bad-acting, out of state investors have neglected properties have proven difficult to remedy.

In 2020, attempts to strengthen tenant rights in Indianapolis resulted in state lawmakers passing legislation to restrict local governments from these moves. Bradley said that has had a ripple effect.

“Because we've taken away the tools for local governments to be able to combat that, it really puts the brunt first on the families who have no other choice but to live in the substandard units,” he said. “But also on our communities who have to deal with more emergency room visits and social service needs.”

Previous reports have highlighted this private equity trend in Central Indiana. Last year a report The Fair Housing Center of Central Indiana found 27,000 Marion County homes are owned by corporate investors, and about half of those are out-of-state companies.

The report also noted nearly 20% of all single family homes are rentals.

The risk analysis offers policy recommendations, including tenants' right to purchase if a property is going up for sale and landlord registries to keep track of corporate owners.

Bradley said they’ve called on the governor to appoint a commission on housing safety and affordability.

Contact WFYI city government and policy reporter Jill Sheridan at jsheridan@wfyi.org.