Affordability · Verified numbers · Page 5 of 8
Half of Marion County's renters are cost-burdened, a quarter severely, and nobody is building a new home under $225,000 anywhere in the metro. Here is what each proposal in this series does about that, and what it does not.
Every figure below is from a primary source, with the table or document named. Where I derived something, it says so.
Renters paying 30%+ of income
48.9%85,062 of 173,991 renter households
Census ACS 2020–2024, B25070.
Renters paying 50%+
25.1%43,610 households
Same table. One renter household in four is severely burdened.
Owners with a mortgage paying 30%+
23.0%35,486 of 154,002
Census ACS 2020–2024, B25091.
Median household income
$66,346Marion County
ACS 2020–2024, B19013. Median gross rent $1,153. Median owner-occupied value $224,000.
Area median family income, 2026
$110,3004-person, HUD FY2026
80% is $88,250. 50% is $55,150. 30% is $33,100. 120% computes to $132,360. Indianapolis-Carmel HUD Metro FMR Area, effective May 1, 2026.
New homes built under $225,000
ZeroIndianapolis metro
Median new-construction price $404,945, unaffordable to roughly 51 percent of households. Indiana Business Research Center, Indiana Business Review, Spring 2026.
Housing units permitted, 2025
1,342Marion County
Down from 1,906 in 2024 and 2,472 in 2023. Census Building Permits Survey. The eight-county region needs about 8,400 a year by the IMPO's 2024 estimate.
Tax-credit awards, 2026 round
2 of 21statewide 9% awards in Marion County
80 units, both rehabilitation. The 2025 round: 1 of 16, a 78-unit preservation. IHCDA award lists.
Share figures use all households in the group as the denominator, including the small number for whom the Census could not compute a burden. On the burden-computed base the renter figures are 50.9 and 26.1 percent.
Affordability is four different problems wearing one word. Each proposal in this series pulls on one or two of them, and none pulls on all four.
| Proposal | Supply | Cost to own | Deep affordability | Staying put |
|---|---|---|---|---|
| Residential reinvestment abatementNew or rebuilt 1–4 unit homes in weak-market tracts | Yes, in the tracts where nothing gets built | Yes. Modeled below. | Only through the income bonus and nonprofit partners | No direct effect |
| Owner-occupied 2–4 unit bonus100% × 10 years if the buyer lives in one unit | Yes, rental units without a rental developer | Yes, the rent carries the mortgage | Indirectly, small-scale rentals | Keeps ownership local |
| HEA 1001 compliance done wellUse the required UDO review to actually remove barriers | Yes. The cheapest supply there is | Over time | No | No |
| Speed, certainty, published incentive policy | Yes. Time is a cost the public imposes for free | Indirectly | Indirectly | No |
| Broad-based housing fundEveryone who benefits from growth contributes | Removes a tax on building | No | Yes. Services-attached units at scale, run by operators built for it | Preservation money |
| Support for new tax-credit production | Some | No | Yes, but the region gets one to two awards a year | Preservation awards |
| Displacement protection that does not block supplyTax relief for long-tenured lower-income owners; land trust; preservation | Neutral by design | Yes, for existing owners | Land trust homes are permanently affordable | Yes |
The honest reading of that table: the abatement is a homeownership and supply tool, not a deep-affordability tool. A household at 30 percent of area median income is not buying a new home, abated or not. The fund and the tax-credit pipeline are for them, and they need a scale the current market-rate-only mechanism will never produce. Anyone who tells you one tool does all four rows is selling something.
This is the question I said I would not answer until I had modeled Indiana's circuit breaker. I have now modeled it against the rules DLGF published for taxes payable in 2027 and Marion County's certified 2026 rates. The abatement is worth about 40 percent of its face value, and the savings are still real.
| New home | Land / improvement AV | Annual tax without abatement | With 100% abatement | Annual saving | Ten-year saving |
|---|---|---|---|---|---|
| $250,000 | $35,000 / $215,000 | $2,250 | $0 | $2,250 | $18,917 |
| $325,000 | $46,000 / $279,000 | $2,950 | $78 | $2,872 | $24,404 |
| $450,000 | $63,000 / $387,000 | $4,200 | $301 | $3,899 | $34,524 |
Warren Township rate, 2.6908 per $100 of net assessed value, held constant. Homestead standard deduction $40,000 falling to $0 by pay-2031 and supplemental deduction 46 percent rising to 66.7 percent, per SEA 1 (2025) as described in DLGF's June 2025 and May 2026 memos. One percent homestead cap. Supplemental homestead credit of the lesser of 10 percent or $300. Assessed value taken as equal to price, land at 14 percent. Abatement deduction applied before homestead deductions. Estimates, not quotes.
Why the face value shrinks: on the $325,000 home, $279,000 of abated value times the rate is $7,507 a year on paper. But without any abatement, that home's bill is already capped by the constitution at one percent of gross assessed value, $3,250, less the $300 credit. So the most the abatement can save is the capped bill, about $2,950. The circuit breaker does not eliminate the benefit. It caps it. That is the answer to objection two on the objections page.
| Household, 4 persons | Income | Monthly cost without abatement | Share of income | With abatement | Share of income |
|---|---|---|---|---|---|
| 80% of AMI | $88,250 | $2,307 | 31.4% | $2,068 | 28.1% |
| 100% of AMI | $110,300 | $2,307 | 25.1% | $2,068 | 22.5% |
| 120% of AMI | $132,360 | $2,307 | 20.9% | $2,068 | 18.7% |
Principal and interest on 95 percent of price at 6.5 percent for 30 years, $1,952 a month, plus $110 a month insurance, plus the modeled tax. No mortgage insurance, HOA or utilities. Rate and insurance are assumptions, not quotes. Incomes are HUD FY2026 limits for a four-person household.
Read the 80 percent row. The abatement moves a $325,000 new home for that household from above the 30 percent line to below it. That is not a rounding error. It is the difference between qualifying and not, for a family earning $88,250 in a neighborhood where nobody has built a house in twenty years.
The model applies DLGF's published deduction schedule and the certified 2026 rate. Two things need confirmation from the Marion County Auditor or DLGF: the order in which an abatement deduction and the homestead deductions are applied, and whether any local credits change the result. The ordering does not change the annual saving by more than the size of the residual bill, but it should be confirmed before a builder prints a number on a sign.
Lever one
Buyer at or below 120% of AMI
Any zone, any tract: a first buyer whose household income is at or below $132,360 for four persons gets the full 100 percent schedule. Columbus uses the same 120 percent line for its owner-occupied definition, paired with a housing-cost test of no more than 35 percent of income. That pairing is worth copying.
Lever two
Owner-occupied duplex, triplex, fourplex
A buyer who lives in one unit gets 100 percent for ten years on the whole building. The rent from the other unit carries the mortgage. This is how a household at 80 percent of AMI ends up owning a $400,000 building, and it produces rental units without a single rental developer.
Where it stacks
Habitat and the land trust
A Habitat mortgage or a community land trust ground lease already brings a new home within reach of households at 50 to 80 percent of AMI. Layer a ten-year abatement on the improvement value and the carrying cost drops further. I want their numbers before I claim a figure.
Whether the income bonus tests the buyer's income once, at closing, or continues. A one-time test is simple and matches how the homestead deduction works. A continuing test is fairer and impossible to administer. I lean one-time and want to be argued out of it.
No, and the design is what says no, not me.
Strong Market tracts get nothing automatic. On the prototype map, that is 71 tracts and about 106,000 one-to-four family homes, including most of the north side and the parts of the east side that are already appreciating. A house built there pays full freight.
The benefit attaches to new value, not to a purchase. Nobody who buys an existing house gets a dollar. The tax on every existing home in a Reinvestment tract is unchanged.
The pilot runs on land-bank lots. Vacant to Vibrant parcels come out of the tax-sale pipeline and sit, by construction, in the weakest markets in the county.
The map is a computation. All five indicators come from federal data, three from the Census Bureau and two from the CFPB. The method is published before the map, and re-scored every three years. If a neighborhood gentrifies, it scores out.
What this means for you
Pick who you are in the bar at the top and this section changes.
The modeled numbers above are what a buyer's lender will see. If a ten-year abatement worth roughly $2,900 a year on a $325,000 home does not change which lots you build first, I would rather hear that now. If it does, tell me at what price point it stops mattering.
Read the 80 percent of AMI row. That household qualifies with the abatement and does not without it. I need to know what the MLS and the lender's underwriting would require to count an abatement that runs with the parcel, and whether any of your buyers have asked about the Cincinnati version.
The affordability lever that matters most here is the owner-occupied two-to-four unit building. A design that puts a duplex on a 40-foot lot at a construction cost a household at 100 percent of AMI can finance is worth more to this program than any subsidy.
How does your underwriting treat a property-tax abatement that transfers to the buyer with the remaining years fixed? If it counts toward debt-to-income, the 80 percent of AMI household above qualifies. If it does not, the program does far less than the model says, and I need to know that.
You are the deep-affordability half of this page. The abatement is not built for households at 30 or 50 percent of AMI, and I say so above. What I want from you is the number: what does a ten-year abatement on the improvement value do to the carrying cost of your next home, stacked on your existing mortgage or ground-lease product?
If you own your home, nothing on this page raises or lowers your tax bill. If you rent, the proposals that reach you are the housing fund and the tax-credit pipeline, not the abatement. If you are trying to buy your first home and earn under about $132,000 for a family of four, the abatement is designed for you.
The circuit-breaker model is the piece I did not have when this series started. It says the abatement is worth about 40 percent of face value and about $2,900 a year on a $325,000 home. That also means the fiscal cost to the taxing units is about 40 percent of what a face-value estimate would show, because the cap was already forgiving most of that tax. I want DLGF to check the arithmetic.