Hi.

I'm Jeff Ray, your host for Economic Outlook.

Thank you for joining us.

Each week as we discuss the region's most important economic development initiatives with a panel of experts.

Communities across the country looking at innovative strategies to help solve the shortage of affordable housing.

Today, we're diving deeper into the work happening to address this in Kosciusko County and sharing some best practice examples of how the community is filling this important need.

Coming up on today's show.

Shortages of affordable housing are a long standing challenge in the United States.

High interest rates and low inventory are contributing to this issue.

And for low income Americans, the hunt for affordable housing can be especially tough.

Communities across the country are wrestling with how to meet the needs and communities.

Today, we're taking you to Kosciusko County for a closer look at how they're tackling affordable housing.

Joining me for that conversation, or Steven Meyer, the chief executive officer at Intend Indiana, and Ben Logan, the executive director at habitat for Humanity of Kosciusko County Guys, welcome.

Thanks for having us.

Yeah.

Thank you for being here.

Appreciate it.

Important conversation.

We've talked about a little bit on the show before, but I feel like communities everywhere are doing this.

You guys caught our attention for the work that you're doing in Kosciusko county, so I thought we'd have you on.

Steven, let me come your way first though.

So if somebody has not heard of intend Indiana, tell us about what you do.

So intent.

Indiana is a statewide nonprofit that approaches affordable housing through, equitable financing and Housing development service.

So we work both on, making sure that there's access to capital to fund projects and also developing projects independently come your way.

So talk about habitat.

I think people know habitat, but give us a give us an intro to habitat for humanity and of Kosciusko County.

Yeah, most people know us.

We're the nonprofit that brings volunteers and charitable funding together to, build homes and help with, low income families and households.

And, we've been around since about 1991, this, local chapter of habitat and, we build just about three homes a year, and we're also expanding into new programs as well.

Have it just got some great attention with president, former President Carter and the great work he's done.

It's been wonderful to see the good work you do in community.

So thank you, Ben, for doing that.

Steven, come your way.

So let's just talk about the crisis as a whole.

Right.

So we kind of teased in our opener a little bit, but give us the give us the landscape on affordable housing across the country.

What some of the challenges are that kind of inspired intend to dive into this topic.

So over the last five years or so, housing costs have gone up by 50%.

And it is, everywhere it is, there are no communities that are spared from the rising cost of housing.

And that is a combination of a lack of supply of housing, but also, higher interest rates, the higher cost of building houses.

And so we're seeing this real crunch.

And it's not just in affordable housing.

It's especially acute and affordable housing, but it's across the whole, housing spectrum.

And so, our approach to this has been to bring as many tools to the table as possible to address these issues that are affecting every community.

And I'm going to follow with that for a second because it because it's interesting you mentioned this tools.

There's not a one size fits all response to this.

So you're you're coming up with innovative tools and ways and advice to communities on how to address it.

That's right.

And so we develop housing, single family houses for homeownership.

We support multifamily as well.

So we're on the development side, building houses in, Indianapolis, Shelbyville, Muncie, South Bend.

But also on the other side of our house, we do lending.

So, under the Intend umbrella, we have two community development financial institutions, which are nonprofit banks, essentially.

So we are supporting the businesses that are building houses with affordable loans and then, providing, affordable mortgage capital for, homebuyers who are interested in buying houses.

So, again, trying to bring as many tools to the table as possible to work on this problem from every angle.

Great.

Been this come your way.

And so, so you give us the quick habitat introduction.

But but kind of remind us a little bit about how it works.

Right.

So so you've for many years and you go back to 1991, I've been trying to build affordable housing for people in the county.

Did talk to us about your your model, if you will, and how that works.

Yeah.

Like Steven shared, when housing is in crisis, the most acute problems show up on people that are on the lower income side.

So we serve people, that make 30 to 80% of our, county's median income.

And, they apply to the habitat program just like anyone else who went to the bank next door and applied for a loan.

But, we dig a little bit deeper and we get to know them a little bit better.

And when they're approved into the program, the really fun part start is, we actually have them complete sweat equity.

So that's then working on site gaining, you know, those, tactile skills on the construction site, working on restore, working at our events, they also go to financial literacy and homeownership classes, making sure that they're equipped with the knowledge that they need.

And at the end of the day, they actually purchase that home once we, coordinate the volunteers and the funding and land to build it, they purchase that home with a 0% interest mortgage.

So that's how we believe in, lending without interest in that way.

And, this drastically brings down the cost.

And also, just because we're able to build a more modest home, something that's a little bit more in the 1200 square feet, three bedroom, four bedroom.

A lot of people say that's what my grandparents grew up in.

Those are the homes that we're building, and that just drives that cost down.

Is, able to, make that affordable for them.

And we do that because homeownership has so many kind of wraparound benefits.

So it's not just, hey, I can afford this monthly payment.

That is a shelter and a safe place for my family.

But, you know, homeowners have a higher net wealth, from that equity, but from other things to their kids do better in school.

Their families fight less.

They eat, they eat better.

They actually have less, allergy meds.

We've seen that a lot, with a lot less black mold in our homes compared to where they were.

So we do that because there's a lot of wraparound benefits of homeownership and that American dream of homeownership.

So your chapter has been at it 34 years or so.

So your work, focus specifically in one area of Kosciusko spread across the county.

Where do you do the bulk of your work?

Now?

We've we build all throughout the county, and where we can find land and land is always the biggest bottleneck of trying to find something that's affordable, but also where our house also, fits within the natural landscape.

We don't want to build something that sticks out like a sore thumb.

And Kosciusko County, where I think it's the fourth largest county where one of the top, in land area, we're very spread out.

We have a lot of kind of small towns.

So we try to get into each of those towns as much as we can.

And I'm going to stay with you for a second.

So as Steven was talking about kind of, rising interest rates, supply chain, cost of materials up, you're kind of the boots on the ground builder sort of experiencing that, that phenomenon that Steven just talked about.

The talk to us, what's happening with the cost of housing, of the houses you build in KosciuskoCounty?

Yeah.

Our material costs are up.

Our, labor costs are up.

We don't we use volunteers a lot.

Everyone knows that you can come and volunteer with habitat, but there are things that we don't use volunteers for, things that we need, the equipment, expertise or license to do.

I don't have a a fleet of excavators.

So we do outsource things like that.

So those costs are up.

And like I said, Lance lands a big one too.

So, being able to, to access lots that we can build on and, talking with other habitat affiliates, not only has the cost go up, if we go to buy that land, it's higher.

But since the the the value of that land has risen, it's a lot less likely for people to donate it to us as well.

And towns are just not annexing land like they used to.

So you're working with a limited pool right there?

Yeah.

Steven, come back your way and talk just a little about, just maybe, the statewide landscape.

You mentioned working in quite a few towns.

Some of it.

Can you just dive a little bit deeper, give us a couple examples.

Maybe from communities that you're working in on, on, on some of the, the innovative approaches you've been taking to sort of help spur housing and that is areas.

Yeah.

So, communities have different approaches and what their priorities are.

So, so some of the communities that we are working in will, will offer free land or discounted land because it's something that they've had available for them.

And, it's been sitting on by municipality and not, generating any tax revenue.

So that's one way that some communities approach it.

But, on the other spectrum, communities are starting to become more sophisticated about how they incentivize what, what, development is happening in their community.

So one of the things that we will be working on together in Kosciusko County is developing a land bank which helps move properties that are, otherwise trapped in tax sale or have some sort of murky title to them and move them back into a place where a habitat or an intend or another developer can actually build on them.

And, you know, try to get through that process so that, there's more visibility as to what a development timeline looks like.

And then on the finance side, the community foundations are becoming more sophisticated.

And they're doing investments into organizations that are, developing housing and doing doing low cost investment so that you can create a runway for projects.

So really, there are a lot of different tools out there that, especially when they're brought together, can be really impactful.

Yeah.

And so then take us, you know, you know, kind of local.

So I've had a chance to glance through the the housing study looks like in Kosciusko as a com have kind of come together to say how do we how do we help have some collaborative effort to solve these housing crisis.

Let's just talk about the efforts as a whole, even outside a habitat.

But in Kosciusko go to bring more affordable housing there and how this partnership with, intend happen.

Yeah, yeah.

So, there's a lot of, energy, especially around housing here, locally in Kosciusko County.

And, the interesting thing, if you if you're not as familiar with our county, is that we're not quite rural and we're not quite urban.

You know, the county has a population about 80,000.

So we're not as big as South Bend or Elkhart, but we're not as small as some of the more outlying rural counties.

So there's enough, people momentum to, you know, have a thriving habitat and have a thriving.

But, the number of organizations, nonprofit organizations focus on housing are very few, because just of that smaller population to draw from, for funding and for volunteers and things like that.

But a lot of these smaller towns are really energized to bring projects, to them.

So our local economic development corporation, our Chamber of Commerce, our elected officials, different councils are really trying to bring a lot of more projects and get them off the ground.

But the thing with housing is that you got to start now to be able to see something happen 5 to 10 years from now.

Right.

And even talk about so there's high demand for what you guys do.

What, what what would attract you to come work in, in a Kosciusko County or South Bend or some of the others that you mentioned?

Well, we like to work in areas that have high opportunity.

So good school systems.

Access to good employment options.

Healthy houses.

Ben mentioned a lot of the, benefits to, especially children in houses.

And so we, we, look for communities that are willing to support affordable housing in those high opportunity areas.

And so Kosciusko County is one of those places that supporting affordable housing everywhere in the county.

Our approach to this, in Koscius a mortgage product that allows people housing choice.

They can choose any house anywhere in the county as and, be able to buy that house and live there so it meets the needs of them and their family.

I want to, talk about how maybe how and I'm not even sure which one I got.

Maybe both of you on this one.

So.

Yeah.

Exact.

Because because I think, like, when we talk about, like, one of the challenges, like the lack of housing stock.

Right.

And I think of when we're sitting in South Bend today and so, so is that that housing stock has aged and a lot of it's deteriorated.

So a lot of conversation about new.

But can you renovate old houses too.

Is it just new like like I think of when you're renovating as, oh my gosh, lead based paint and all other, you know, kind of costs there.

But but talk about kind of new versus old a little bit and, and kind of that blending into the neighborhoods you're investing in.

Yeah.

Well in Kosciusko County.

And something that came out of the study, that we're talking about, the median age of when our homes were built was 1980.

So half of our homes are older than that.

And like you said, in the 1970s and pre is when you start talking about asbestos lead paint and not necessarily all those homes have them, but you also just have outdated ways of building, ways of wiring houses, ways of plumbing, houses, foundations, can definitely be kind of scary if you get into those really old homes.

And for us, we, we get that question quite a lot, like, hey, why are you building new when we have houses that could really use, you know, just some love and can turn it around.

And, I, you can ask any builder for this.

It's so much simpler.

And oftentimes in, in a place like Indiana, it can be a lot cheaper to, to just build with what you have on an open plot.

You know exactly what's behind the walls because you put it there, whereas it can actually be quite expensive.

And for habitat, we're also, you know, we're thinking about longevity in our homes, for our families.

We don't want them to have huge maintenance costs.

So, you know, these old Victorian style homes with rooms upon rooms upon rooms, they're not accessible.

They're not again, those are great houses.

And we need to maintain our aging housing stock.

That's one of the things coming out of this housing study is how do we, make the best of what we currently have, and build at the same time.

But, I know for us, that can be a challenge of trying to retrofit something, to serve the families we serve.

Yeah.

And any thoughts on that, Steve?

Yeah, we we do.

Rehab houses as well.

Because of the issues that been raised, we typically do gut rehabs on those houses.

So we're pretty much starting from scratch.

And so it's not that much more cost effective.

But it also allows us to take a smaller World War two era houses that were probably three bedroom, one bath and make them more modern, make them two bedroom, two bath for, you know, as a small family or a couple, and make them more appealing than what they were before.

Yeah.

No, I just, we're curious and I appreciate that balance because.

Yeah, maintain that character of the neighborhood.

But also fit in, new there.

Let's talk for a second about, maybe local government.

Important role they play.

Like, like, you know, part of me when I start thinking about, like, the cost of this house.

And I think in our county, for example, it's about $250 a square foot.

And by the time you build 1000 square foot house, that's not very affordable.

And the in in South Bend in particular is, is has, in some cases the lot, tap fees, building design, all that kind of stuff.

How can the local governments help most, catalyze, affordable housing development, our community for communities.

So local governments and partnerships with local governments are incredibly valuable.

And, and really, it's difficult to have successful programs around housing without the buy in and and, support of local governments.

So for us, predictability is incredibly important.

We have federal grant requirements that have to be spent within a certain period of time.

And so having, predictable permitting schedules, understanding zoning and how long it would take to rezone property, and also support for, pursuing other grant funding that may be out there.

And are they willing to, to come to the table and say we're, we're putting some, support behind this project.

We are asking you to support it as well.

So, you know, I think it's kind of undervalued how important local governments are, and especially how, how important time is to these projects.

And let me build on this with you, Ben, for a second.

Because because I think, you know, Steven's describing a little bit of this patchwork quilt that has to come together to sort of make this difficult financial model work.

You've, you know, for a long time with habitat, had to piece a lot of these things together to make the numbers work.

Talk about how challenging that is sometimes to get all those different pieces and how maybe the city or the counties have helped, you bring some of those costs down in your area.

Yeah, yeah.

And I'm, with my role in habitat, I was actually brand new to the world of housing and especially affordable housing.

And, I always called it the longest line of dominoes that I'll have to fall at the right time in order to get get something done, get something built and get the the keys handed over.

So when you talk about not just land acquisition, but development and time for the funding and volunteers to build and the families alongside that, it can definitely be challenging.

And we have great local governments, in our, in our county.

Sometimes the fun thing is, is that, like I said, there's so many spread out towns, each one takes a slightly different approach.

And we're trying to, build a house.

And Warsaw might look different than in Mentone, and it will look different than in Syracuse.

And knowing that as part of, as part of our job.

But, yeah, we have great support from the local government officials.

And, it's really good to have them because they also know the history of where we're building as well.

And especially, Kosciusko County is, blessed with just about a little over 100 natural lakes.

And then, tough thing about that is that in between lakes are usually marshes.

They're wetlands.

So we when we talk about trying to find the best piece of land, local governments actually really help us, saying yes, there, no, not there and things like that.

But they've always been very generous, very supportive of our work.

Great team to help us with.

I would say that this term affordable and, but maybe both of you weigh in on this because I think there's a little bit of a, negative stigma sometimes I but but really, this is the, the workforce.

These are the people that, that, that work on our restaurants or factories or whatever.

Help.

How do you help Joe Public understand?

Affordable housing can be nice.

Nice development or nice investments in neighborhoods.

I think that's a great point.

And and Ben, alluded to this as well.

The construction quality for an affordable house is no different than any other house.

We often will build affordable houses and market rate houses together, and you can't tell them apart.

The only thing that is different is how much the person is paying every month for their house.

And so we take great pride in that, that we want this to be an asset that builds wealth for families.

And so we don't want it to be, something that's less than it is.

It is, the most valuable asset that family will probably ever own.

And we want it to, age.

Well, and we want to make sure that they don't have to put a lot of money into their houses over the years.

So, when they may not be able to afford it.

So, just like habitat, we put a lot of pride in the construction quality that we have.

And, you know, I give tours of neighborhoods that we've worked in before where we have affordable houses right next to market rate houses.

And I always challenge them, tell me which one is which and nobody, they usually give up because you can't tell the difference.

I love, you know, sharing that I think because I think that's that's so critical.

And I think in my experience with habitat and such, as you've worked on the design to make sure it fits in, but I but I and I do I feel like the trend is to do more of what exactly what you're doing and sort of market rate and affordable together that, that, that, that integrated neighborhood is so much more value to speak to the just the affordable piece a little bit and kind of build off what Steven said with, kind of this balance and what you're trying to do in Kosciusko.

Yeah.

So like I mentioned earlier, affordable, like there's a real term to that.

And it's, usually just to simplify as people who make less than the median income of that.

And that's based on household size.

So for example, and in our neck of the woods, a typical habitat family, honestly looks like a single mom with usually two kids.

And trying to figure out, when you when you only have one parent households.

Usually it's a struggle between childcare and and housing.

And just that, that, delicate balance of finding affordable options for both.

So we and, you know, you think of, teachers, police officers, usually those more public servant type roles.

It's not, you know, it's not impossible for them to qualify for a program like habitat for humanity.

You know, a family of four who makes 40,000 a year probably fits right in with who we're serving.

And they're coming to us because, they just can't get over either the down payment requirement.

Obviously, interest rates are up, and they can't.

They maybe could have afforded a mortgage, but now they can't.

Or, you know, they're still battling credit, you know, bad credit history and trying to escape that cycle of, late payments and debt payments and all of that.

And that's why they're coming to us, is that we're able to work with them through that as they become more homeownership ready student loan come your way as we get to our last three minutes or so.

So 60 plus communities in our viewing area here, all trying to think about how to solve this problem.

What kind of advice would you give, city or community leaders there on, on even how to get started with, sort of tackling kind of the issues with affordable housing they have in their community.

So the approach that Kosciusko County has taken is, is really a model for this, of having the conversations and really understanding the breadth and depth of the problem.

This is a housing issues that we're facing now or have been in the works for a generation.

And it it is not a one funding round, solution or even, one administration.

Solution.

This is going to take decades to work our way through.

So we need to be thinking about programs and how are these sustainable?

And are we building the talent that is needed to be able to build all the houses and renovate all of the houses?

Are we working on the education side, making sure that people are, working on their credit?

So that when they are of it, ready for homeownership, that they're mortgage ready.

So I think to think about it as broadly as possible and have as many people around the table as possible.

So, advice to folks who are watching you sort of been in the saddle there with a bunch of other partners in, in Kosciusko County.

Any any words of wisdom, lessons learned, advice for them?

As you said, we got to get all these dominoes to sort of fall in the right direction.

But, what advice would you give to them?

Well, I think, we're probably not, too unique in this is that we've probably had a lot of housing studies, and this is the most recent one, and Steven's our study guy, and I love I love data, but I think people are really excited for action.

They're like, I want to know what to do so I can put my mind to it.

And that's why I think habitat has been growing, not just here in our county.

But across the state.

Actually, as a network, we're in the top ten homebuilders in the state building.

I don't remember how many homes now, but, but people kind of with that.

I think people need to get ready to see more creative solutions to housing.

And habitat can be part of that.

There's other nonprofit organizations across the state doing really exciting stuff.

And and Indiana definitely being one of those.

So I, I think it it really comes down to let's get everyone around the table.

Let's stop trying to point out boogeyman that may or may not be there.

And let's put our heads down and let's build some houses.

Okay, Steven, last word for you.

People want to know more about intend.

Where would we send them?

You can go to intend indiana.org and, follow us on Facebook and, social media.

So, we put out regular content.

You can see all of the different projects that we're involved in.

You can find out about all of our partners on those websites as well.

So, we'd love for you to engage with us right now.

Thank you.

Thanks for the good work you're doing across the region, both here in St. Joe County and in Kosciusko County.

Ben, thank you for the good work you're doing in Kosciusko too.

We look forward to hearing more about, the progress that you're making down there.

Thank you both for coming today and sharing a little bit about your experiences.

We're glad to learn a little bit more.

And and we're really complimentary of the work that you've done there.

So appreciate okay.

That's it for our show today.

Thank you for watching on the night or listening to our podcast find w Economic Outlook on WNIT.org, YouTube or most major podcast platforms like us on Facebook and follow us on Twitter.

I'm Jeff Rea I'll see you next time.

This WNIT local production has been made possible in part by viewers like you.

Thank you.