LOW INCOME HOUSING TAX CREDITS AND NEIGHBORHOOD CHANGE:
CASE STUDY OF THREE PROJECTS IN INDIANAPOLIS
A RESEARCH PAPER
SUBMITTED TO THE GRADUATE SCHOOL
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE DEGREE
MASTERS OF URBAN AND REGIONAL PLANNING
BY
SARAH ESSBAI
Pr. VERA ADAMS ‐ ADVISOR
BALL STATE UNIVERSITY
MUNCIE, INDIANA
MAY 2013
Table of Content
Table of Content ................................................................................................................. 2
List of tables ........................................................................................................................ 4
List of figures ....................................................................................................................... 7
Abstract ............................................................................................................................... 9
Chapter I . BACKGROUND AND LITERATURE REVIEW ...................................................... 10
1. Introduction and research question ...................................................................... 10
2. The Low Income Housing Tax Credit program....................................................... 12
2.1. The Qualified Allocation Plan ............................................................................. 12
1.2.
Occupancy Threshold Requirements.............................................................. 16
1.3.
The qualified census tract (QCT) .................................................................... 17
1.4.
How does LIHTC work? ................................................................................... 18
1.5.
Rent Limits and affordability requirements ................................................... 19
3. Literature review.................................................................................................... 22
3.1.
Urban Quality of life ....................................................................................... 22
3.2.
Impact of LIHTC projects on quality of life indicators .................................... 29
Chapter II METHODOLOGY AND CASE STUDIES ............................................................... 34
2
1. Methodology.......................................................................................................... 34
1.1.
Quality of life indicator ................................................................................... 34
1.2.
Project selection criteria and data collection ................................................. 35
1.3.
Marion County Background Information ....................................................... 38
2. Case studies .............................................................................................................. 42
2.1. Case Study 1: Unity Park Homes ........................................................................ 42
2.2. Southside Partners-I........................................................................................... 59
2.3. Hanna Village ..................................................................................................... 76
Chapter III ANALYSIS AND CONCLUSIONS ........................................................................ 88
1. Results .................................................................................................................... 88
1.1.
Demographics ................................................................................................. 89
1.2.
Housing ........................................................................................................... 97
1.3.
Built environment indicators ........................................................................ 100
2. Discussion............................................................................................................. 101
3. Conclusions .......................................................................................................... 103
Bibliography .................................................................................................................... 105
3
List of tables
Table I.1: Indiana QAP qualification categories (2012-2013 QAP, 2012) ......................... 15
Table I.2: Indiana QAP scoring sections and eligible points (2012-2013 QAP, 2012)....... 16
Table I.3: 2012 Income Limits for existing properties to which the Hold Harmless Limits
apply per HERA ("LIHTC Maximum Rents and Incomes - Non-New England,"
2012)................................................................................................................. 20
Table I.4: 2012 Income limits for existing properties to which the Hold Harmless Limits
do not apply per HERA ("LIHTC Maximum Rents and Incomes - Non-New
England," 2012) ................................................................................................ 21
Table II.1: Selected case studies ....................................................................................... 36
Table II.2: Demographic growth in Marion County .......................................................... 38
Table II.3: Racial composition in Marion County .............................................................. 39
Table II.4: Income and poverty rate in Marion County .................................................... 39
Table II.5: Education, employment and occupation in Marion County............................ 40
Table II.6: Housing indicators trends in Marion County ................................................... 41
Table II.7: Unity Park Homes information ........................................................................ 44
Table II.8: Unity Park Homes funding sources .................................................................. 45
Table II.9: Unity Park Homes rent rates ............................................................................ 45
Table II.10: Unity Park Homes rent thresholds upon completion of the rehabilitation
project ........................................................................................................... 46
4
Table II.11: 3516 and 3517 census tracts information ..................................................... 48
Table II.12: LIHTC projects located in census tracts 3516 and 3517. Source:
http://qct.huduser.org/................................................................................. 48
Table II.13: Demographic growth in census tracts 3516 and 3517 .................................. 49
Table II.14: Racial composition in census tract 3516 ........................................................ 50
Table II.15: Racial composition in census tract 3517 ........................................................ 50
Table II.16: Income and poverty rate in census tract 3516 .............................................. 51
Table II.17: Income and poverty rate in census tract 3517 .............................................. 51
Table II.18: Education, employment and occupation in census tract 3516 ..................... 52
Table II.19: Education, employment and occupation in census tract 3517 ..................... 52
Table II.20: Housing indicators trends in census tract 3516 ............................................. 53
Table II.21: Housing indicators trends in census tract 3517 ............................................. 54
Table II.22: Parks within 0.5 mile radius from Unity Park homes..................................... 56
Table II.23: Public amenities within 0.5 mile radius of Unity Park Homes ....................... 57
Table II.24: Southside Partners-I project information ...................................................... 62
Table II.25: Southside Partners-I funding sources ............................................................ 62
Table II.26: Southside Partners-I rent rates ...................................................................... 62
Table II.27: Rent Thresholds in Southside Partners-I under LIHTC requirements ............ 63
Table II.28: Current rent thresholds in Southside Partners-I............................................ 64
Table II.29: Census tract 3581 information ...................................................................... 65
Table II.30: LIHTC project in census tract 3581 ................................................................ 65
Table II.31: Demographic growth in census tract 3581 .................................................... 67
5
Table II.32: Racial composition in census tract 3581 ........................................................ 67
Table II.33: Income and poverty rate in census tract 3581 .............................................. 68
Table II.34: Education, employment and occupation in census tract 3581 ..................... 68
Table II.35: Housing indicators trends in census tract 3581 ............................................. 69
Table II.36: Parks within 0.5 mile from Southside Partners-I apartments ....................... 72
Table II.37: Public amenities within 0.5 mile radius of Southside Partners-I apartments 73
Table II.38: Hanna Village project information ................................................................. 78
Table II.39: Hanna Village project partnership components ............................................ 78
Table II.40: Hanna Village project funding sources .......................................................... 79
Table II.41: Hanna village rent thresholds at the application time .................................. 79
Table II.42: Current rent rates ate Hanna Village apartments ......................................... 80
Table II.43: Census tract 3806 information ...................................................................... 81
Table II.44: Demographic growth in census tract 3806 .................................................... 81
Table II.45: Racial composition of census tract 3806 ....................................................... 82
Table II.46: Income and poverty rate in census tract 3806 .............................................. 82
Table II.47: Education, employment and occupation in census tract 3806 ..................... 83
Table II.48: Housing indicators trends in census tract 3806 ............................................. 84
Table II.49: Green spaces within 1 mile radius from Hanna Village apartments ............. 86
Table II.50: Public amenities within 0.5 mile radius from Hanna Village apartments ..... 86
Table III.1: Indicators trends of Marion County and the case studies .............................. 88
Table III.2: Number of amenities present in each case study ........................................ 100
6
List of figures
Figure III.1: Location of the selected case studies ............................................................ 37
Figure III.2: Location of Unity Park Homes ....................................................................... 42
Figure III.3: Unity Park Homes parcels .............................................................................. 43
Figure III.4: Zoning map of Unity Park Homes area .......................................................... 55
Figure III.5: Location of Southside Partners-I project ....................................................... 59
Figure III.6: Southside Partners-I parcels .......................................................................... 60
Figure III.7: Zoning map of the area surrounding Southside Partners-I ........................... 71
Figure III.8: Location of Hanna Village apartments .......................................................... 76
Figure III.9: Location of Hanna Village parcel ................................................................... 77
Figure III.10: Zoning map of the area surrounding Hanna Village apartments ................ 85
Figure III.1: Marion County households’ growth .............................................................. 89
Figure III.2: Households’ growth in the three cases studies ............................................. 89
Figure III.3: Median household income trend in the three case studies .......................... 90
Figure III.4: Poverty rate trends in Marion County and case studies ............................... 91
Figure III.5: Unemployment rate trends in Marion County and case studies .................. 92
Figure III.6: Percentage of residents holding a bachelor or higher trends in Marion
County and case studies ................................................................................ 93
Figure III.7: Percentage of Management, business, science and arts professionals in
Marion County and case studies ................................................................... 94
7
Figure III.8: Percentage of service professionals in Marion County and case studies ..... 95
Figure III.9: Percentage of sales and office professionals in Marion County and case
studies ........................................................................................................... 96
Figure III.10: Median home values trend in Marion County and case studies ................. 97
Figure III.11: Median rent rate trends in Marion County and case studies...................... 98
Figure III.12: Vacancy rate trends in Marion County and case studies ............................ 99
8
Abstract
RESEARCH PAPER: Low Income Housing Tax Credits and Neighborhood Change: Case
Study of Three Projects in Indianapolis
STUDENT: Sarah Essbai
DEGREE: Master of Urban and Regional Planning
COLLEGE: Architecture and Planning
DATE: May, 2013
PAGES: 109
In this research neighborhood change is explored through the study of three
neighborhoods in Indianapolis that accommodate Low Income Housing Tax Credit
projects. Specifically, this research focuses on the quality of life indicators between 1990
and 2010. The case studies show that in addition to the presence of the LIHTC units, the
location of the neighborhood and the presence of revitalization projects were key to
explaining the observed trends. Unity Park and West Indianapolis neighborhoods
experienced positive changes (increase in median household income, increase in
property value and higher educated residents) while the third neighborhood where
Hanna Village is located, a suburban project, endured more negative changes (increase
in poverty and unemployment among its residents and decrease of real median
household income) since the LIHTC project was implemented.
9
Chapter I . BACKGROUND AND LITERATURE REVIEW
1. Introduction and research question
Since its inception in 1986, Low Income Housing Tax Credit (LIHTC) became one of the
most popular programs for the development of affordable housing. LIHTC is currently
the primary supply-based subsidy mechanism that supports the development of placebased affordable housing in the United Sates. With the declining number of occupied
public housing units, the main goal of the LIHTC program was to contribute to the
increase of the supply of affordable housing for low income households.
However in conformity with the US low income housing policies, the LIHTC program
sought also to eliminate the negative externalities often related to affordable housing in
general and public housing in particular. Small scale and dispersed developments are
supposed to avoid poverty concentration and to spur economic growth in the
neighborhoods accommodating LIHTC projects. For these purposes, LIHTC applicants
are encouraged to look into the community host improvement and revitalization
programs and to conform with specific requirements related to building quality and to
neighborhood amenities.
Through the study of three neighborhoods in Indianapolis that accommodate LIHTC
projects, this research paper seeks to explore how quality of life changed in these
neighborhoods during a twenty-year period and answer the following question:
To what extend did the presence of LIHTC projects in these neighborhoods affected the
change in quality of life?
11
2. The Low Income Housing Tax Credit program
Low Income Housing Tax Credit (LIHTC) is one of the most popular affordable housing
programs among developers. It is currently the primary supply-based subsidy
mechanism that supports the development of place-based affordable housing in the
United States. As the number of occupied public housing units declined from 1.3 million
in 1993 to 1.1 million in 2000, new LIHTC construction more than compensated for this
decline by adding about 1,300 privately developed projects and 91,000 units per year
(Baum-Snow & Marion, 2009; McClure, 2012). This represented 5% of the national
rental housing market in 2011. In 2005, the LIHTC program was responsible for about
$7.5 billion of private investments that supported the development of approximately
1.5 million affordable rental units.
Based on section 42 of the Internal Revenue Code, the LIHTC program was enacted by
the Congress in 1986 as a tax incentive to encourage private developers to invest in the
affordable housing market. The program was first established for a three-year
renewable period before it became permanent in 1993. The LIHTC program is
administrated locally by the Internal Revenue Service (IRS) jointly with state housing
agencies.
2.1. The Qualified Allocation Plan
Developers wishing to participate in the program should apply for the limited pool of tax
credits which the IRS allocates each year to state housing agencies. As of 2007, the limit
12
is set at $1.95 per resident. State housing agencies award the tax credits to projects
complying with the state Qualified Allocation Plan (QAP). Developed by the state
housing agency, the QAP outlines selection criteria and requirements for projects
applying to the LIHTC program. This plan should be consistent with the state’s
consolidated plan and respect federal law that prioritizes projects serving the lowest
income families, plus those structured to remain affordable for the longest period of
time. Criteria generally include 1) location, 2) local housing demand conditions, 3)
availability of other funding sources, 4) demographics, 5) project amenities and 6)
architecture and construction costs (Eriksen & Rosenthal, 2010). The federal
government requires that 10% of the state tax credits should be allocated to projects
owned by nonprofit organizations. States can award housing tax credits over a period of
two years. When credits are not all allocated, they are returned to a national pool for reallocation.
Under the LIHTC program, an eligible project must fulfill a number of requirements. The
property must be a residential rental and respect occupancy threshold requirements
plus rent and affordability restrictions for a period of 30 years or longer.
a. Indiana 2010 QAP
Indiana Qualified Allocation Plan (QAP) is elaborated by the Indiana Housing and
Community Development Authority (IHCDA). The authority is habilitated to administer
and manage the LIHTC program plus other state and federal housing programs within
13
Indiana, such as Indiana Housing and Community Development Fund HOME Investment
Partnership funds. The QAP sets guidelines for these programs according to federal
requirements, state needs and development objectives.
Through this QAP, the IHCDA promotes the following objectives:
•
Create housing that serves the lowest income tenants (30% or less of the AMI).
•
Minimize the displacement of existing residents.
•
Locate developments in qualified census tracts (QCT) or in difficult development
areas (DDA)
•
Revitalize and preserve the existing affordable housing developments
•
Serve special needs populations (i.e. elderly, disabled and homeless).
The authority has identified four priorities that govern its LIHTC allocation decisions:
1. Comprehensive Community Development
2. Aging in Place
3. Ending Homelessness
4. High Performance Building
Based on these priorities, the authority has set nine categories that developers can
address to qualify for the LIHTC.
14
Qualified Not-for-profit
Projects developed and owned by a qualified not-for-profit organization
Community Impact
10%
Elderly
10%
Large City
10%
Small City
10%
Rural
10%
Preservation
Projects involving rehabilitation of an existing structure or affordable
housing development.
Housing First
Projects targeting the extremely low income (less than 30% AMI)
General
20%
10%
10%
10%
Table I.1: Indiana QAP qualification categories (2012-2013 QAP, 2012)
Evaluation Factors
As a responsible of the allocation of the tax credits, IHCDA has established a set of
requirements and evaluation criteria that eligible projects must meet in order to receive
program financing. These criteria address the development’s impact at various scales
according to the authority goals. This includes location choice, development amenities,
housing units’ equipment, market and financing, community revitalization, and tenants’
needs. An eligible development can collect up to 204 points by scoring in each category
of the five evaluation sections. To qualify for tax credits, the score must be at least 110
points; this will be the reference for resources allocation. However, the authority
reserves the right to allocate tax credits at its discretion to achieve a better distribution
of resources or to accomplish a specific development objective.
15
Scoring Section
Total Number of Eligible Points
1. Rents Charged
28 points
2. Development Characteristics
93 points
3. High-Performance Housing
21 points
4. Financing & Market
29 points
5. Other
33 points
Total Number of Points Possible
204 points
Table I.2: Indiana QAP scoring sections and eligible points (2012-2013 QAP, 2012)
1.2.
Occupancy Threshold Requirements
To qualify for housing tax credits, a project must fulfill one of two income criteria: 1) the
20-50 rule, where 20% of the units will be occupied by households with incomes at or
below 50% of the Area Median Income (AMI), or 2) the 40-60 rule, where 40% of the
units will be dedicated to households earning 60% or less of the AMI. The project should
meet one of these requirements for at least 30 years to benefit from the 10-year stream
of tax credits. Because the size of the allocated tax credits is proportional to the number
of affordable housing units, most applications for LIHTC projects contain almost
exclusively low-income units.
However, when the LIHTC program was created, the compliance period was only 15
years. This remained the case until 1989 when new restrictions applied as per the
Revenue Reconciliation Act. These restrictions required a minimum 30-year compliance
period.
16
1.3.
The qualified census tract (QCT)
Any project can qualify for LIHTC as long as it fulfills the occupancy threshold
requirements in any area. But projects located in census tracts where 50% of its
households earn less than 60% of the AMI, designated as Qualified Census Tract (QCT),
receive 30% increase in their tax credit allocations. A similar increase is awarded to
projects located in difficult Development Areas (DDA), which are counties or
metropolitan areas where the cost of real estate is high compared to the area income.
Congress legislated this increase as part of the Omnibus Reconciliation Act of 1989
(Baum-Snow & Marion, 2009).
In most states, QAPs offer incentives to developers to locate their projects within
extremely low-income or “targeted improvement” areas; consequently, developers will
pick QCTs as locations to implement their projects since this will increase the probability
of their application’s success.
As part of the Community Renewal Tax Relief in 2000, Congress added a new eligibility
criterion to census tracts. Effective since 2002, this addition stipulates that a census
tract qualifies as a QCT if its poverty rate is at least 25%. It also increased the number of
QCT from 7,700 in 2001 to over 9,900 in 2002, and the share of population living in
these tracts from below 10% to 13%. Further changes took place with decennial census
updates. These changes influence which areas are considered the poorest, and hence
the location of future LIHTC developments (Freedman & Owens, 2011).
17
a. QCTs in Marion County
For 2013, 83 Qualified Census Tracts are designated in Marion County (based on 2010
Decennial Census and 2006-2010 American Community Survey Data). This constitutes an
increase of 41% compared to the 49 QCT designated in 2012 (based on 2000 Census
Data).
In 2012, Indiana was allocated $14,300,000 in tax credits.
1.4.
How does LIHTC work?
Developers claim housing tax credit benefits directly for 10 years, and sell them to
investors to raise equity capital. The claiming party must be part of the project
ownership entity, as the tax credit benefits run with the property. In cases with thirdparty involvement, this is usually accomplished by creating a limited partnership.
Based on the number of affordable housing units per project, investors receive a dollarfor-dollar credit against their federal tax liability each year over a period of 10 years,
with the condition that these units will remain occupied by qualified households for at
least 30 years. In that sense, tax credits are very different from tax deductions. The
amount of tax credits awarded to a project also depends on the nature of the housing
(acquired, constructed, or rehabilitated), the presence of federally subsidized loans, and
total eligible development costs (I. G. Ellen, O’Regan, K. M., Voicu, L. , 2009).
18
1.5.
Rent Limits and affordability requirements
The annual rent of low-income units within an LIHTC project should not exceed the
applicable LIHTC rent limit that corresponds to 30% of the tenant gross income. Rent
limits are specified annually by HUD and vary by city; however, they are determined
following the HUD fair market rents, which set rent ceilings relatively high (Eriksen &
Rosenthal, 2010).
a. 2012 Income and rents limits in Marion County, Indiana
Marion County is subject to the Hold Harmless policy per the Housing and Economic
Recovery Act (HERA) of 2008. This policy decreased rents limits in the area when new
calculations that include data from the American Community Survey decreased the Area
Median Gross Income (AMGI). However, this policy does not apply to projects placed in
service after 2008.
19
Maximum Incomes
Household Size
50%
60%
One Person
$24,050
$28,860
Two Persons
$27,500
$33,000
Three Persons
$30,950
$37,140
Four Persons
$34,350
$41,220
Five Persons
$37,100
$44,520
Six Persons
$39,850
$47,820
Maximum Rents
Unit Size
50%
60%
Fair Market rent
Studio
$601.25
$ 721.50
$543
One-bedroom
$644.37
$ 773.25
$629
Two-bedroom
$773.75
$ 928.50
$747
Three-bedroom
$893.12
$1071.75
$967
Four-bedroom
$996.25
$1195.50
$1023
Table I.3: 2012 Income Limits for existing properties to which the Hold Harmless Limits
apply per HERA ("LIHTC Maximum Rents and Incomes - Non-New England," 2012)
20
Maximum Income
Household Size
50%
60%
One Person
$23,450
$28,140
Two Persons
$26,800
$32,160
Three Persons
$30,150
$36,180
Four Persons
$33,450
$40,140
Five Persons
$36,150
$43,380
Six Persons
$38,850
$46,620
Maximum Rents
Unit Size
50%
60%
Fair market rents
Studio
$586.25
$ 703.50
$543
One-bedroom
$628.12
$ 753.75
$629
Two-bedroom
$753.75
$ 904.50
$747
Three-bedroom
$870.00
$1044.00
$967
Four-bedroom
$971.25
$ 1165.5
$1023
Table I.4: 2012 Income limits for existing properties to which the Hold Harmless Limits
do not apply per HERA ("LIHTC Maximum Rents and Incomes - Non-New England," 2012)
The rent requirements should be met for a minimum period of 30 years: a 15-year
compliance period, then 15 years extended use period. Tenants are also subject to
income restrictions and are certified annually to ensure their eligibility.
21
3.
3.1.
Literature review
Urban Quality of life
While many studies have addressed the impact of LIHTC projects on neighborhoods,
most have focused on a single indicator (e.g. crime rate, poverty rate, income, property
value). Few studies tempted a comprehensive approach to measure this impact on the
quality of life by utilizing different indicators. In “The External Neighborhood Effects of
LIHTC Projects Built by Three Sectors” L.A. N. Deng (2011) used eight indicators to assess
the economic change in neighborhoods:
1. Unemployement rate
2. Poverty rate
3. Percentage of households receiving public assistance
4. Median household income as a percentage of metropolitan median household
income
5. Median gross rent as a percentage of metropolitan median gross rent
6. Median housing value as a percentage of metropolitan median housing value
7. Number of units built in the last 10 years
8. Conventional single-family mortgage approval rate.
Other researchers have also used these indicators (Zielenbach, 2003) as the key
indicators of neighborhood economic change by gauging the concentration of
22
disadvantaged population in the area and the neighborhood’s market potential. These
indicators are also the main components of an area’s quality of life (Deng, 2011).
The definition of “quality of life” might seem almost intuitive. With an extensive use of
the term by both scientists and policy makers, the definition still remains elusive.
However, we can identify two directions that have oriented researches and attempts to
define “quality of life.” The first, emphasized by psychology, has focused on the
subjective perception of the quality of life that addresses levels of satisfaction, pleasure,
and fulfillment through self-reports (Diener & Ryan, 2009). The second direction favors
the use of quantifiable variables to objectively measure the quality of life (UNDP, 2011).
These variables include social, economic, and health indicators and can generally be
retrieved from statistical resources such as national censuses and other reports from
specialized agencies. The two approaches complement each other; objective indicators
measurements can be combined with surveys and interviews to constitute indexes that
would allow a universal assessment of the quality of life such as the United Nations
Human Development Index.
Besides the United Nations, many researchers, organizations, countries, and cities have
developed and published their own quality of life index. Each is more or less
comprehensive than the others and is used as a reference to publish more or less
reliable rankings lists of cities and countries. The following are a few examples of quality
of life indexes developed by private or public entities.
23
a. The Economist Intelligence Unit’s index (2005)
1. Material wellbeing; GDP per person, at PPP in $
2. Health; life expectancy at birth, years
3. Political stability and security; political stability and security ratings
4. Family life; divorce rate (per 1,000 population)
5. Community life; rate of church attendance or trade-union membership
6. Climate and geography Latitude
7. Job security; unemployment rate
8. Political freedom; average of indices of political and civil liberties
9. Gender equality; ratio of average male and female earnings
b. The Organization for Economic Cooperation and Development (OECD) better life
index (2011)
1. Housing conditions (room per person and facilities) and expenditure
2. Household Income and financial wealth
3. Earnings, job security and unemployment
4. Community strength and social support network
5. Educational attainment
6. Environment: air pollution and water quality
7. Civic engagement: voter turnout, consultation on rule-making
8. Health; life expectancy, self-reported health
24
9. Life satisfaction; self-reported
10. Safety; assault rate, homicide rate
11. Work-life balance; average working hours, time devoted to leisure and personal
care
c. Federation of Canadian Municipalities' Quality of Life Reporting System (2004)
1. Population Resource; population growth, education levels, literacy levels,
cultural diversity, immigration, migration, and age structure of the population
2. Community Affordability; ratio of prevailing income levels to the local cost of
living, family income, public transportation costs, and government transfer
income
3. Quality of Employment; unemployment rate, percentage of long-term
unemployment, percentage of families receiving both employment insurance
and social assistance, median hourly wages, gender earning disparities
4. Quality of Housing; average rent, vacancy rate, property values
5. Community Stress; incidence of low income, lone-parent families, teen fertility,
personal crises, business bankruptcies and suicides
6. Community Health; infant mortality rate, incidence of and reasons for admission
to hospitals, proportion of babies born with low birth weight, and workdays lost
to illness or injury
7. Community Safety; crime (property, violence) rates, gross mortality rate by
injuries and poisonings
25
8. Community Participation; voter turnout, daily newspaper circulation, charitable
giving, and support for community projects through the local United Way
organization
26
d. The quality of life project, New Zealand (2007)
1. People
11. Civil and political rights
•
Population growth
•
Ethnicity
•
Age
•
Voter turnout
•
Families and households
•
Representation on local decision-
•
Disability
2. Knowledge and skills
•
Community involvement in council
decision-making
making bodies
12. Economic standard of living
Participation in early childhood
•
Income
education
•
Work-life balance
•
School participation
•
Cost of living
•
Qualification levels
•
Social deprivation
•
Skill and job match
•
Net worth (assets and liabilities)
•
Career training
•
13. Economic development
3. Health
•
Economic growth
•
Life expectancy
•
Employment
•
Low birth weight babies
•
Research and development
•
Infant mortality
•
Local businesses
•
Teenage parents
•
Retail sales
•
Diseases
•
Residential and non-residential
•
Access to GPs
•
Mental and emotional wellbeing
•
Tourism
•
Self-reported health status
•
Skilled migrants
•
Modifiable risk factors
•
Addictions
•
Recreation and leisure
building permits
27
•
7. Safety
•
Perceptions of safety
•
Child safety
•
Injuries
•
Road safety
•
Workplace Safety
•
Crime Levels
Energy use; electricity usage,
sustainable energy use projects
•
Air quality
•
Beach and stream/lake water
quality
•
Drinking water quality
•
Water consumption; domestic
water consumption per person,
commercial and industrial water
8. Housing
consumption
•
Housing tenure
•
Housing costs and affordability
•
Household crowding
•
Government housing provision
•
Urban housing intensification
pride, graffiti, vandalism, litter,
•
Housing accessibility
noise pollution.
•
11. Built environment
•
•
9. Social connectedness
•
Overall quality of life assessment
•
Diversity and identity
•
Local community strength and
Electronic communication
•
Arts and culture
•
Local natural environmental issues
•
Waste management and recycling
•
Biodiversity
Land use; green space, ease of
Traffic and transport; motor vehicle
ownership, motor vehicle
registration, means of travel to
work, distances travelled by mode
of transport, population travelling
outside their city to work
10. Natural environment
•
Look and feel of the city; sense of
access to green open spaces
spirit
•
Ecological footprint
•
Public transport; use, affordability,
safety, convenience, ease of access
to public transport facilities
•
28
Access to services and density
3.2.
Impact of LIHTC projects on quality of life indicators
LIHTC projects have a certain impact on the quality of life in neighborhoods where they
are implemented. There are two reasons to think the introduction of LIHTC projects will
have unpredictable effects on the area. The first is that LIHTC projects are directed to
low-income population; the second is that these projects fall under the category of
place-based, supply-side subsidized programs.
Many studies have shown the impact of public housing on the quality of life in their
immediate environments. These studies have essentially examined the impact on social
aspects and how these projects created high concentration of poverty over the years
that deeply affected their tenants and in worst cases generated violence and
destruction. In his work “Making the second Ghetto: Race and Housing in Chicago, 19401960”, A. Hirsh (1983) underlines two important factors that contributed to this
situation; the large scale character of the projects and their location in extremely poor
communities. This problematic history has anchored the debate over publicly subsidized
housing programs. The LIHTC program does not constitute an exception; many
observers and social advocates worry that the program would repeat the same mistakes
by allowing new affordable housing projects in high-poverty areas. However, in another
argument, community development organizations see the program as a tool for
revitalization and economic development of these distressed neighborhoods.
29
Those speculations were strong incentives for researchers to explore the impact of the
LIHTC projects on the areas where they are implemented. Many researches rejected
prejudices related to the LIHTC projects and gave evidence that many fears were
unfounded, especially the hypothesis related to criminal activity and poverty. However,
these fears are justified. Studies suggest that both children and adults are influenced by
their environment characteristic, and that exposure to violence, crime, poverty and
segregation has strong negative impacts with respect to access to employment and
education opportunities (I. G. Ellen & Turner, 1997).
Ellen et Al (2009) found that though some LIHTC projects are located in low-income
neighborhoods, there is no evidence that these developments are related to an increase
in poverty concentration. Moreover, results reported from New York City suggest that
locating these investments in low-income neighborhoods has supported community
revitalization efforts.
Looking at another externality often associated with affordable housing --criminal
activity-- Freedman & Owens (2011) tested the hypothesis that LIHTC investments in
distressed communities contribute to reducing crime rates. They found that counties
with a large number of QCT, where LIHTC developments are located, record a significant
decrease in violent crime. Property crimes, however, remain unchanged as citizens are
more likely to report to the police in revitalized areas. The social benefit of this direct
relationship cannot be ignored and constitutes an important positive externality of
investment in distressed communities.
30
LIHTC developments also benefit economic charactheristics and on future unsubsidized
investments within their implementation area. LIHTC projects decrease the local median
household income but increase the number of owner-occupied housing units within 1
km radius of these projects. However, the effects of new LIHTC developments on the
beighborhood housing values differs from one neighborhood to the other, depending on
neighborhood composition. In declining and stable neighborhoods, they generate a
positive extrenality as they lead to higher values but in gentrifying areas little or no
effect was recorded. Baum-Snow & Marion (2009) define neighborhoods in the top
tercile of the distribution of housing value appreciation between 1980 and 1990 in each
metropolitan area as “gentrifying,” those in the middle tercile as “stable,” and those in
the bottom tercile as “declining.” There is also a noticeable effect on the construction of
new market rate rental units, as a slight decrease in the number of new units was
recorded, this decrease is more pronouced in gentrifying areas (Baum-Snow & Marion,
2009). These diverse effects again raise the issue of location for LIHTC projects.
The LIHTC program gives incentives to developers to locate in the poorest areas (i.e.
QCT), which in turn steer new low-income housing development toward poorer areas
causing a concentration of poverty and limiting low-income households access to better
jobs and schools (Freedman & Owens, 2011). However, developers prefer to locate in
gentrifying neighborhoods whether these are located in QCT or not, as they can expect a
higher return on development value after the end of the LIHTC rent requirements
period (Baum-Snow & Marion, 2009). As a consequence, compared to public housing
31
units that are mainly located in communities of the lower third of the income scale, 44%
of LIHTC projects are located in the middle third and higher third income neighborhoods
as of 2000 (Eriksen & Rosenthal, 2010). LIHTC projects also tend to have higher
construction quality (Eriksen, 2009).
Location differences are important to developers but also to neighborhoods, which are
affected differently by these choices, depending on the neighborhood context and
composition. For example, in Miami-Dade County, Florida, low-income neighborhoods
were more exposed to more improvement as different indicators pertaining to
neighborhood economic characteristics 1 change positively, while middle class
neighborhoods are less likely to experience the same degree of improvement. But these
changes did not take any clear direction in working-class neighborhoods as mixed results
were obtained (Deng, 2011). A previous study in New York City addressing place-based
subsidized housing neighborhoods effects supports those results. Researchers found
that the most positive externalities of these projects are found in the most declining
neighborhoods (Schwartz, Ellen, Voicu, & Schill, 2006).
1
These indicators as listed by Deng (2011) are (1) unemployment rate; (2) poverty rate; (3)
percentage of households receiving public assistance; (4) median household income as a
percentage of metropolitan median household income; (5) median gross rent as a percentage of
metropolitan median gross rent; (6) median housing value as a percentage of metropolitan
median housing value; (7) number of units built in the last 10 years; and (8) conventional singlefamily mortgage approval rate.
32
In a community-based experiment conducted to unveil the impact of LIHTC projects on
neighboring property values in Polk County, Iowa, Funderburg & MacDonald (2010)
underline the positive impact of quality design and planning on neighborhood valuation.
This positive impact is especially noticeable when the project targets a mixed-income
population.
These findings suggest different thoughts about the use of LIHTC projects as
revitalization tools in the most distressed areas and the chance that these projects offer
their low-income residents to access better services and opportunities by locating in
higher-income neighborhoods.
33
Chapter II METHODOLOGY AND CASE STUDIES
1. Methodology
1.1.
Quality of life indicator
For the purpose of this research, twenty indicators were chosen to measure changes in
the studied projects. These indicators can be classified under two categories:
a. Socio-economic indicators
2
•
Median income and Poverty rate
•
Unemployment rate, Residents occupation
•
Educational achievement
•
Median rent and property values 2
Looking at property values is an important indicator of neighborhoods quality of life. Housing
value is determined by many factors; interior design and layout, size, quality and efficiency of
utility system, and finally age and location. But the neighborhood is also a critical feature that
prospective residents consider; along with accessibility to jobs, shopping and entertainment, the
quality of public services provided (i.e. schools, fire protection and police services), the
environment quality, and whole neighborhood appearance determine the value of a residential
property.
b. Built environment and sustainability indicators
•
Vacancy rate
•
Green spaces (surface/resident), accessibility of green spaces
•
Public amenities: health/ fitness center, grocery store/farmers’ market, daycare,
elementary school…
•
Accessibility via public transportation (bus lines + stops)
•
Parking
•
Streetscape: street trees/street lights
•
Walkability
•
Energy use/ green buildings
1.2.
Project selection criteria and data collection
This research explores three case studies, all located in Marion County within the
Indianapolis Metropolitan area. The case studies are also all family-oriented projects
that feature at least 60% two or more bedroom units of the total of the project’s
affordable units. These projects were completed and placed in service between 1990
and 2000, allowing a period of at least 10 years to observe neighborhood change. At
the time of this study, all case studies had passed the affordability cap of the first
mandatory 15-year period.
Since the location of LIHTC projects in QCT is an important criterion for tax credits
allocation, this research measures neighborhood change for each indicator at the census
35
tract level. As of 2013, the three projects are located within qualified census tracts
which were all granted this designation in 1994 when the qualified status was assigned
for the first time.
Data for the socio-economic indicators derives from the 1990, 2000 and 2010 decennial
census reports, as well as data from the 2010 5-year estimates American Community
Survey.
The basic method to assess neighborhood change is to compare the quality of life
indicators for each census tract from before the implementation of the project and up
to 10 years after the project implementation.
Unity Park
Census tract number
Southside Partners I
Hanna Village
3581
3806
1995
1999
1992
60
31
120
1465.6
1363.2
3516
Year placed in service
Number of Units
Census Tract Area (acres)
249.6
3517
595.2
Table II.1: Selected case studies
a. Case studies location
The three projects picked as case studies for this research are all located within Marion
County. Two of them are located in downtown surrounding while the third is located in
the south side of Indianapolis.
36
Figure III.1: Location of the selected case studies
37
1.3.
Marion County Background Information
Marion County is the most populated county of the state of Indiana. It is also the highest
educated county of the state and the most diverse. Marion County has a consolidated
city-county government with the City of Indianapolis, the capital of the state.
Marion County counts 213 LIHTC project placed in service between 1987 and 2010.
These projects total a number of 11,185 low income units.
a. Demographic profile
2010
2000
1990
Trend
Population
903,393
860,454
797,159
11.76%
Households
366,176
352,164
319,471
12.75%
Family households
218,338
213,454
205,652
5.81%
Non family households
147,838
138,710
113,819
23.01%
Average household size
2.42
2.39
2.45
-0.03
Average family size
3.08
3.03
3.06
0.02
Median age
33.9
33.6
30.7
3.2
Table II.2: Demographic growth in Marion County
Marion County experienced positive trends in population and family households’ growth
during the 20-year period between 1990 and 2010. The number of households
increased by 12.75%; family households increased by 5.81% whereas non-family
households increased by 23.01%. The average household size remained almost stable
while the median age increased by 3.2 years.
38
•
Racial composition
2010
2000
1990
Trend
White
62.70%
70.50%
77.25%
-14.55%
African American
26.70%
24.20%
21.19%
5.51%
9.30%
3.90%
1.04%
8.26%
2%
1.40%
0.91%
1.09%
American Indian and Alaska Native
0.30%
0.30%
0.24%
0.06%
Pacific Islander
0.10%
0.00%
0.02%
0.08%
Other Race
5.40%
2%
0.39%
5.01%
Hispanic
Asian
Table II.3: Racial composition in Marion County
Following the national trend, Marion County has recorded a decrease in the number of
its white population (14.55%) and an increase in the number of non-white population
bringing the diversity index from an average of 0.15 in 1990 to above 0.60 in 2010 (Hoch
& Kandris, 2012).The Hispanic community was the most important contributor to the
county diversity with an increase of more than 8%.
•
Income and poverty rate
2010
2000
1990
Trend
Median household income
$ 43,541
$ 40,421
$ 29,152
49.36%
People below poverty level
17.3%
11.4%
12.1%
5.2%
Families below poverty level
13.5%
8.7%
9.3%
4.2%
Table II.4: Income and poverty rate in Marion County
39
Median household income has increased by 49.36% between 1990 and 2010. When
corrected to inflation, median household income has barely increased during that
period. Poverty rate among families has increased by 5.2%.
•
Education, employment and occupation
2010
2000
1990
Trend
Unemployment
6.9%
3.7%
5.5%
1.4%
High school or higher
84%
81.6%
76.8%
7.2%
Bachelor or higher
27.3%
25.4%
21.4%
5.9%
Management, business, science, and arts
occupations
Service occupations
33.80% 32.90%
27%
17.60% 14.70% 13.50%
0.90%
2.90%
Sales and office occupations
26.90% 28.50% 35.10%
-1.60%
Natural resources, construction, and
maintenance occupations
Production, transportation, and material
moving occupations
8.10%
8.70%
9.90%
-0.60%
13.60% 15.10% 13.80%
-1.50%
Table II.5: Education, employment and occupation in Marion County
Change in Marion County’s educational achievement, employment and occupation did
not record any spectacular trends. Unemployment rate increased by 1.4%; bachelor,
Graduate and Associate degrees holders increased by about 5.9% and high school
graduates number increased by 7.9%.
The occupation of residents in Marion County remained stable overall. Management
positions have increased slightly by less than 1%, services by 2.9%; sales and office jobs
decreased by 1.6%.
40
b. Housing information
2010
2000
1990
Total housing units
417,862
387,183
349,403
16.38%
Occupied housing units
366,176
352,164
319,471
14.62%
12.37%
9.04%
8.57%
3.80%
206,981
208,957
161,643
28.05%
$ 122,200
$ 99,000
$ 61,400
99.02%
159,195
143,207
135,791
17.24%
412
73.54%
Vacancy rate
Owner-occupied housing units
Median housing unit value
Renter-occupied housing units
Median gross rent
$
715
$
567
$
Trend
Table II.6: Housing indicators trends in Marion County
Vacancy rate in the county has increased by almost 4%. The number of owner-occupied
housing units has also increased by more than 28% which constitutes an increase of
almost 6% in homeownership. The median gross rent has increased by 73.54% while
housing units’ values have almost doubled (99.02%).
41
2. Case studies
2.1. Case Study 1: Unity Park Homes
Figure III.2: Location of Unity Park Homes
42
Figure III.3: Unity Park Homes parcels
43
Unity Park is an LIHTC project located in Fall Creek neighborhood in downtown
Indianapolis. The project placed in service in 1995, replaced the Hometowne public
housing complex. It was developed by the Hometowne Residents Council, the King Park
Area Development Corporation (KPADC) and the Indianapolis Neighborhood Housing
Partnership (INHP).
The project is composed of 60 housing units designed in the form of duplex homes and
scattered on 30 parcels along Alabama Street, New Jersey Street and Central Avenue.
Unity Park project was subsidized through both low income housing tax credits,
allocated in 1996, and section 8 vouchers.
Unity Park is currently managed by the KPADC that maintains 50% of the units available
for section 8 tenants who earn less than 30% of the Area Median Income (AMI), while
the remaining units are rented for tenants earning between 71% and 80% of the AMI.
Year Placed in Service
1995
Allocation Year of tax credits
1996
Total Number of Low-Income Units
60
Number of 2 Bedroom Units
12
Number of 3 Bedroom Units
33
Number of 4 Bedroom Units
15
Owner
Hometowne Associates, L.p.
Developer / Manager
King Park Area Development Corporation
Table II.7: Unity Park Homes information
44
Unity Park Homes project was made possible through Hometowne Associates, a limited
partnership featuring KPADC as a general partner. For the completion of the 60 low
income rental units the partnership has made use of the following sources of funds.
Contributor
Contribution amount
KPADC (general partner)
$
75,000
LIHTC
$ 3,084,669
HOME loan
$ 1,000,000
Bank loan
$ 1,246,002
Table II.8: Unity Park Homes funding sources
At the time of the project implementation, 40% or more of the project units were
reserved to households earning 60% or less than the Area Median Income (AMI) as a
fulfillment of the LIHTC occupancy threshold requirements. Monthly rents were charged
as follows:
Unit
Number of units
Monthly rent
2 bedrooms
12
$ 457
3 bedrooms
33
$ 577
4 bedrooms
15
$ 641
Table II.9: Unity Park Homes rent rates
As per 2012, Unity Park Homes have passed the cap of the first 15 years of affordability
required by the LIHTC partnership. However, with the concern of maintaining the
project housing units in the affordable market within the gentrifying neighborhood of
Fall Creek, KPADC is currently working on a transaction that will allow this non-profit
45
organization to gain ownership of the project. KPADC will continue to run the project as
affordable rentals but will be able to enlarge its occupancy threshold to include
households earning up to 80% of the AMI. Within this frame, 50% of the units will still
remain available for persons and families earning less than 30% of the AMI. These
guidelines were set up in accordance with Fall Creek neighborhood organizations, which
share the objectives of maintaining a mixed income environment.
KPADC is preparing a rehabilitation plan for the 60 duplexes that will take place after the
closure of the transaction. This plan will renovate and upgrade the 17 years old units to
match the neighborhood change. The total cost of this operation is estimated at
$3,001,193. Upon completion of the rehabilitation, monthly rents will be charged as
follows:
Tenants with 30% or less AMI
Tenants with 71 – 80% AMI
Type of
units
2 bedrooms
Number of
units
6
Tenant paid
rent
$189
Number of
units
6
Tenant paid
rent
$748
2 bedrooms
17
$208
16
$867
4 bedrooms
7
$255
8
$970
Table II.10: Unity Park Homes rent thresholds upon completion of the rehabilitation
project
Unity Park parcels are located in the tracts number 3516 and 3517. 17 parcels are
located in the tract number 3517 while 13 parcels are located in the census tract
number 3516. These tracts were designated as QCTs at the time of the project
46
implementation. But while the census tract 3517 is still listed as a QCT for the year 2013,
3516 is no longer classified as a QCT.
At the time of the project implementation, the neighborhood was a distressed area that
had been in a continuous decline for over four decades. The area had lost 75% of its
housing stock between 1955 and 1995. Vacancy rate was high as well as crime rate and
most neighborhood remaining structures were blighted.
The neighborhood underwent a major transformation when the Fall Creek
redevelopment project took place. The project built and rehabilitated 480 housing units
and, with both public and private financing, was able to transform the neighborhood
from a blighted abandoned area into a mixed income residential neighborhood
(Partners, 2005).
The two tracts that constitute Fall Creek Place didn’t experience similar changes. The
census tract 3516, where most Fall Creek project’s parcels are located, is also the tract
that accommodates most of the positive change that occurred in the neighborhood. The
change concerned the demographic profile of the area as well as the built environment.
47
Tract
County
3516
3517
Marion County
Marion County
IN
IN
Not Qualified
Qualified
20.10%
22.5%
State
Status in 2013
Poverty Rate
Ratio of Tract Median Income to Tract
1.108
0.703
Income Limit
Full Tract Number
18097351600
18097351700
Table II.11: 3516 and 3517 census tracts information
LIHTC Projects in Census tract 3516
Project
LIHTC Projects in Census tract 3517
Total Units
Project
Total Units
2323-25 N. Central Ave.
2 Kenwood Area Doubles
7
2418-20 Central
2 Federation Place
13
Unity Park Home
60 2334-36 Kenwood
2
Sutherland Place Apartments
10 MLK Homes
25
N. Carrolton Project
2 2259 N. Pennsylvania
2
E 25th Street Project
2 Fall Creek Commons
8
Total LIHTC units in the tract
78 Total LIHTC units in the tract
Total LIHTC units in the two tracts 135
Table II.12: LIHTC projects located in census tracts 3516 and 3517. Source:
http://qct.huduser.org/
48
57
a. Demographic profile
Tract Number 3516
Tract Number 3517
2010
2000
1990 Trend
2010
Population
1,989
1,671
2,005
-0.8%
2,279 2,764 3,474
Households
954
766
834
14.4%
921
Family households
375
287
365
2.7%
488
604
765
-36.21%
579
479
469
23.5%
433
469
527
-17.84%
2.05
2.96
2.09
3.41
2.38
3.61
-0.33
-0.65
2.46
3.25
2.52
3.36
2.65
3.51
-0.19
-0.26
33.1
32.7
27.7
5.4
33.7
35.6
30.5
3.2
Non-family
households
Average household
size
Average family size
Median age
2000
1990
1,073 1,292
Trend
-34.4%
-28.72%
Table II.13: Demographic growth in census tracts 3516 and 3517
Between 1990 and 2010, the population of census tract 3516 declined by 0.8%. The
census tract lost almost a quarter of its population between 1990 and 2000 going from
2,005 in 1990 residents to 1,671 in 2000 before gaining in back during the next decade.
Census tract 3517 lost 34.4% of its population between 1990 and 2010. Households and
families decreased respectively by more than 28% and more than 36% in the same tract
while households increased by 14.4% in the tract number 3516.
49
•
Racial composition
Tract Number 3516
2010
2000
1990
White
49.6%
16.0%
13.12%
African American
44.7%
79.8%
86.13% -41.43%
Hispanic
3.4%
1.7%
0.80%
2.60%
Asian
1.6%
0.6%
0.05%
1.55%
American Indian and Alaska native
0.3%
0.2%
0.40%
-0.10%
0
0
0.00%
0.00%
1%
1.4%
0.30%
0.70%
Pacific islander
Other race
Trend
36.48%
Table II.14: Racial composition in census tract 3516
Tract Number 3517
2010
White
21.5%
African American
74.0%
2000
1990
Trend
3.25%
18.25%
92.9% 96.57%
-22.57%
5.4%
Hispanic
0.3%
0.1%
0.60%
-0.30%
Asian
0.9%
0.3%
0.03%
0.87%
0%
0%
0.03%
-0.03%
Pacific islander
0.8%
0.2%
0.00%
0.80%
Other race
2.4%
0.1%
0.12%
2.28%
American Indian and Alaska native
Table II.15: Racial composition in census tract 3517
Both 3516 and 3517 tracts saw their black population decreasing significantly, by
41.43% in tract number 3516 and by 22.57% in tract number 3517. At the opposite of
Marion County trend (Table III.3, page 39), white residents increased in the two census
tracts by 36.48% and 18.25% respectively.
50
•
Income and poverty rate
Tract Number 3516
2010
2000
$ 43,819
$ 20,000
Families below poverty level
15.80%
26.40%
39.70%
-23.90%
People below poverty level
20.10%
31.90%
47.40%
-27.30%
Median Household income
1990
Trend
$ 10,750 307.62%
Table II.16: Income and poverty rate in census tract 3516
Tract Number 3517
2010
2000
1990
Trend
Median Household income
$ 29,228
$ 20,317
people below poverty level
22.5%
38.5%
45.9%
-23.4%
families below poverty level
24.6%
26.8%
43.6%
-19.0%
$ 11,116 162.94%
Table II.17: Income and poverty rate in census tract 3517
Median household income increased significantly in both tracts 3516 and 3517
compared to Marion County (Table III.4, page 39). Census tract 3516 recorded the
highest increase (more than 300%); census tract 3517 had an increase of 162.94%.
Poverty rate were still high in both census tracts in 2010, despite a decrease of 23.90%
in tract 3516 and of 23.4% in tract number 3517.
51
•
Education, employment and occupation
Tract Number 3516
2010
2000
5.40%
4.10% 27.23%
-21.83%
High school or higher
94.50% 64.00% 43.60%
50.90%
Bachelor or higher
47.80%
9.30%
8.60%
39.20%
Management, business, science, and
arts occupations
Service occupations
58.0%
11.5%
17.5%
20.3%
6.7%
39.2%
51.3%
-27.7%
Sales and office occupations
22.4%
28.6%
4.9%
17.5%
Unemployment
1990
Trend
Natural resources, construction, and
maintenance occupations
4.9% 10.0%
1.5%
3.4%
Production, transportation, and
material moving occupations
3.1% 22.2%
3.3%
-0.2%
Table II.18: Education, employment and occupation in census tract 3516
Tract number 3517
Unemployment
2010
15.8%
2000
7.5%
1990
20.6%
Trend
4.8%
High school or higher
73.8%
63.5%
44.9%
28.9%
Bachelor or higher
23.3%
79%
75%
-51.7%
50.20% 17.30%
5.05%
45.15%
20.3% 26.40% 24.71%
-4.41%
Management, business, science, and
arts occupations
Service occupations
Sales and office occupations
22.50% 24.50% 5.14%
17.36%
Natural resources, construction, and
maintenance occupations
0.00% 6.70% 17.54%
-17.54%
Production, transportation, and
material moving occupations
7.00% 23.50% 24.27%
-17.27%
Table II.19: Education, employment and occupation in census tract 3517
52
Unemployment rate decreased significantly between 1990 and 2010 from 27.23% to
5.4% in census tract 3516. There was a also an important increase in the number of
bachelor holders in the tract (39.2%) as well as high school graduates (more than 50%).
In census tract 3517, unemployment rate has increased by 4.8% between 1990 and
2010. Bachelor degrees or higher holders decreased by 51.7% while high school degrees
holders of higher increased by 28.9%.
Occupation patterns of the tracts’ residents also changed with a rise of about 50% in the
number of management, business, science, and arts professionals in both tracts. These
professionals represented less than 7% of the total number of employed residents. The
number of service professionals decreased by 27.7% in tract number 3516 and by 4.41%
in tract number 3517, while the number of sales and office employees increased by
about 17.5% in both tracts following the county trend (Table III.5, page 40).
b. Housing information
Tract number 3516
2010
Total housing units
Occupied housing units
Vacancy rate
Owner-occupied housing units
Median housing unit value
Trend
995
1,197
2.17%
954
766
834
14.39%
22.00%
23.02%
30.33%
-8.33%
487
179
187
160.43%
$ 34,900
410.03%
647
-27.82%
$ 73,300
467
$
1990
1,223
$ 178,000
Renter-occupied housing units
Median gross rent
2000
593
587
$
459
Table II.20: Housing indicators trends in census tract 3516
53
$
241
146.06%
Tract number 3517
2010
Total housing units
Trend
1,568
1758
-15.30%
921
1,073
1292
-28.72%
38.15%
31.57%
26.51%
11.64%
496
501
488
1.6%
$ 116,500
$ 51,000
$ 24,500
375.51%
425
572
690
-38.4%
203
235.47%
Vacancy rate
Owner-occupied housing units
Renter-occupied housing units
Median gross rent
1990
1489
Occupied housing units
Median housing unit value
2000
$
681
$
455
$
Table II.21: Housing indicators trends in census tract 3517
Home-ownership recorded the highest increase in census tract 3516 with an increase of
160.43% in owner-occupied housing units. Vacancy rate has consequently decreased by
8.33% while occupied housing units increased by almost 15%. Property values have
quadrupled between 1990 and 2010, the median value going from less than $35,000 to
almost $180,000. Rent has also increased by about 145%.
In census tract 3517, vacancy rate went from 26.51% to about 38% recording an
increase of 11.64% and Housing ownership has increased by only 1.6%. The median
gross rent has more than tripled going up from $203 to $681. Properties values have
also recorded a dramatic increase of 375.51% between 1990 and 2010.
54
c. Built environment
Figure III.4: Zoning map of Unity Park Homes area
55
Unity Park Homes has benefited of Fall Creek Project spillovers. But the main asset of
the project is its location and access to valuable community services. Unity Park Homes
is less than 3 miles from Downtown Indianapolis, is at a walking distance to the Monon
rail and have direct access to Indy Go buses. Public amenities include excellent schools
as well as community parks and green spaces.
•
Green spaces
Park
Type
Area
Kessler Park
Neighborhood Park
-
Barton Park
Neighborhood park
6 acre
Herron-Morton Place park
Neighborhood Park
-
Dr. Martin Luther King, Jr. Park
Community park
14 acres
JTV Hill Park
Community park
10 acres
Table II.22: Parks within 0.5 mile radius from Unity Park homes
The neighborhood parks are part of the historic the historic Indianapolis Park and
Boulevard System. Kessler Park is named after the landscape architect Georges Edward
Kessler who designed the system in the early years of the City Beautiful movement.
Unity Park neighborhood is bordered on its north side by the Fall Creek Trail that follows
the White River course.
56
•
Public amenities
Type of Amenity
Schools
Amenity Name
Herron High School
Center for Inquiry (IPS 27)
Francis W. Parker (IPS 56)
The Oaks Academy
Fall Creek Academy
Carpe Diem Schools (Public Charter)
Child care
Fuzzie Bear Childcare Academy
Day Nursery/Clarian Health Partnerships, Inc.
Fuzzie Bear Child Care Center
Open Door Church Child Care
Holy Life Childcare Ministries Inc.
Precious Little Lambs Child Care Ministry
Public library
Library Services Center
Health center
Citizens Health Corporation - Health Clinic
Homeless Initiative Program - HIP - Health Care
Citizens Health Center Women, Infants and ChildrenWIC(MCHD)
Recreation Center
Dr. Martin Luther King Jr. Pool
Hill Center Park
Grocery / Food
Kennedy King Park Building - Food Pantry (Citizens)
Family Dollar
Kroger
Table II.23: Public amenities within 0.5 mile radius of Unity Park Homes
In addition to all the neighborhood amenities, Unity Park Homes is also adjacent to a
commercial area along its west border. It also benefits from the proximity of other
57
regional educational and health institutions such as Ivy Tech and IU Health Methodist
hospital.
•
Accessibility via public transportation
The neighborhood is very well served by public transit. IndyGo lines 2, 19 and 18, 38, 39
run respectively on Central Avenue, Delaware Street, Pennsylvania Street and Meridian
Street. Buses stop conveniently at all intersections.
They connect the neighborhood to downtown, Meridian Heights, Community Hospital
North, Crossroads, Eagle Creek and Mitthoefer Street.
•
Walkability
Unity Park Homes neighborhood benefits of the proximity of many amenities and
services, either located within the neighborhood either located at a walkable distance.
There are however clear limits with respect to walkability imposed by the I-65 on the
west and south border of the neighborhood, by I-70 on the southeast and by the white
river on the north-west border. Nevertheless the walkability score attributed by
www.walkscore.com is 71 out of 100 possible points which classify the neighborhood in
the very walkable category.
58
2.2. Southside Partners-I
Figure III.5: Location of Southside Partners-I project
59
Figure III.6: Southside Partners-I parcels
60
Southside Partners-I is an LIHTC project located south of downtown Indianapolis. The
project was realized through a partnership between the Community Development
Corporations of three adjacent neighborhoods in south downtown Indianapolis;
Southeast Neighborhood Development (SEND), Concord Community Development
Corporation (CCDC) and West Indianapolis Development Corporation (WIDC).
Southside Partners-I project was part of the Community Impact Plan that had scheduled
$2.25 M for the improvement of the three Southside neighborhoods over the period
between 2000 and 2004. Through this plan, the neighborhoods were able to secure a
grant from the Lilly Endowment Inc. foundation through Indianapolis Housing
Partnership (IHP).
The project is composed of only low income housing units and its realization included
the rehabilitation of a 50 year-old existing structure as well as the construction of new
housing units. The project site is composed of 31 vacant scattered parcels with an
approximate total of 2 acres. These parcels are located within the qualified census tracts
number 3571, 3559, 3569 and 3581. The development is composed of 17 single family
and detached two family residential buildings that host 31 low income units with a gross
floor area of 38,851 sq. ft.
61
Year Placed in Service
1999
Allocation Year of tax credits
2001
Total Number of Low-Income Units
31
Number of 3 Bedroom Units
23
Number of 4 Bedroom Units
8
Developer / Owner
Southside Partners-I
Manager
Triangle Associates, Inc
Table II.24: Southside Partners-I project information
Southside Partners-I had requested a total annual amount of $257,053 of tax credits and
has also benefited of $280,000 through HOME and the Affordable Housing Program
(AHP) loans.
Contributor
Investment amount
Southside Partners – I (general partner)
Share of equity
N/A
1%
National Equity Fund (limited partner)
$ 1,732,834
99%
HOME loan
$ 257,053
N/A
Other loans
$ 707,302
N/A
Total sources of funds
$ 2,697,189
100%
Table II.25: Southside Partners-I funding sources
At the time of the application the rent limits applied to LIHTC units by the 1997 QAP
were as follows:
Tenant’s income
3 bedrooms
4 bedrooms
Households with income that is less than 50% of the AMI
$504
$558
Households with income that is less than 60% of the AMI
$625
$694
Table II.26: Southside Partners-I rent rates
62
50% of the units in Southside Partners-I project were dedicated to households earning
less than 50% of the AMI. The other 50% of the units were reserved for households
earning up to 60% less of the AMI.
Tenants with 50% or less AMI
Type of units
3 bedrooms
4 bedrooms
Number of units
Tenant paid rent
Net sq ft per unit
4
$365
1,202
8
$385
1,202
4
$475
1,251
Tenant paid rent
Net sq ft per unit
Tenants with 60% or less AMI
Type of units
Number of units
3 bedrooms
10
$385
1,202
4 bedrooms
6
$485
1,251
Table II.27: Rent Thresholds in Southside Partners-I under LIHTC requirements
The development was subject to an extended use agreement of 25 additional years
after the completion of the mandatory 15 year compliance which will keep the project
housing units in the affordable market for a longer period.
In February 2010, the project’s partnership was dissolved following a deed in lieu of
foreclosure agreement initiated by WIDC. The dissolution took place before the
completion of the first 15 years that are required by the LIHTC program. WIDC has
retained the ownership of properties within its neighborhood located on Morris Street
and has sold the remainder of the project to Keystone Construction Corporation and
SEND.
63
In 2001, SEND, CCDC and WIDC have partnered for a second LIHTC project, Southside
Partners-II. This second project has developed 31 low income units in the three
neighborhoods. 15 of the units are located in West Indy neighborhood. Southside
Partners-II is still under LIHTC restrictions and its 15 year compliance period will be up in
2017.
The two projects’ apartments are currently managed by Triangle Associates, Inc. Even
though the Southside Partners-I project does not have to comply with LIHTC restrictions,
it is still subject to the HOME program affordability requirements. These requirements
fix the tenants’ income at no more than 50% of the AMI.
Tenants with 50% or less AMI
Type of units
Number of units
Tenant paid rent
Net sq. ft. per unit
3 bedrooms
23
$ 495
1,202
4 bedrooms
8
$ 605
1,251
Table II.28: Current rent thresholds in Southside Partners-I
This case study will look at the parcels located within the census tract number 3581 in
West Indianapolis neighborhood. WIDC has retained the ownership of 12 properties all
located in West Morris Street.
64
Tract
3581
County
Marion County
State
IN
Status (2013)
Qualified
Poverty Rate
39.2%
Ratio of Tract Median Income to Tract Income Limit
1.051
Full Tract Number
18097358100
Table II.29: Census tract 3581 information
Project
Total Units
William Penn Commons
39
Southside Partners-I (no longer LIHTC)
12
Southside Partners-II
15
Total LIHTC units in the tract
66
Table II.30: LIHTC project in census tract 3581
West Indianapolis is an old blue collar workers neighborhood. The community of West
Indianapolis neighborhood was incorporated in 1894 as the Town of West Indianapolis
before it was annexed to the City of Indianapolis in 1897.
The neighborhood accommodates mixed land uses with a dominance of industrial use
followed by residential use. In fact the neighborhood counts more day population of
workers than residents and has the largest concentration of industrial activity in
Indianapolis. Residential neighborhoods have developed around industries and factories
that were established in the area since the 1870’s. West Indianapolis neighborhood is
65
still home of many major companies in Indianapolis (i.e. Eli Lilly, National Starch, IPL,
Rolls Royce and Vertellus).
Most of the neighborhood’s housing stock dates back to prior to 1900. Due to aging,
economic distress and lack of investment in neighborhood rehabilitation, West
Indianapolis housing stock suffers from significant deterioration and high vacancy rates.
In 1992, The City of Indianapolis prepared a neighborhood plan and proposed a land use
and zoning plan map for West Indianapolis. The plan made recommendations for the
improvement of the housing stock and urban and street-scape design as well as public
transportation and neighborhood amenities (e.g. library and neighborhood center). The
plan’s analysis and recommendations addressed economic development, infrastructure
and investment issues.
In 2004, WIDC initiated the preparation of a Quality of Life Plan, now superseded by the
2008 Quality of life Plan, in partnership with Local Initiative Support Corporation (LISC),
the City of Indianapolis, Ball State University and Indianapolis Neighborhood Resource
Center. These quality of life plans addressed social and civic issues and set goals for
economic development and physical improvement.
66
a. Demographic profile
2010
2000
1990
Trend
Population
2821
3374
3854
-26.80%
Households
991
1266
1374
-27.87%
Family-households
636
810
965
-34.09%
Non-family-households
355
456
409
-13.20%
Average household size
2.85
2.66
2.8
0.05
Average family size
3.38
3.23
3.33
0.05
Median age
31.1
31.9
29.1
2
Table II.31: Demographic growth in census tract 3581
West Indy experienced a decrease in population and households between 1990 and
2010. The neighborhood lost more than 25% of its residents and more than 34% of its
family households.
•
Racial composition
2010
2000
1990
Trend
White
81.20% 90.50% 95.43% -14.23%
African American
8.20%
4.80%
3.71%
4.49%
Hispanic
15%
6.40%
1.53%
13.47%
Asian
0.10%
0.20%
0.10%
0.00%
American Indian and Alaska Native
0.40%
0.20%
0.23%
0.17%
Pacific Islander
0.20%
0.00%
0.03%
0.17%
Other Race
6.70%
2.20%
0.16%
6.54%
Table II.32: Racial composition in census tract 3581
67
With respect to the neighborhood’s racial composition, the Hispanic community
increased by more than 13% while white population diminished by 14.23%. African
American residents increased by 4.49%.
•
Income and poverty rate
2010
2000
1990
Trend
Median household income
$ 32,250
$ 28,265
$ 19,290
67.19%
people below poverty level
39.2%
29.1%
19.6%
19.6%
Families below poverty level
36.9%
25%
17.2%
19.7%
Table II.33: Income and poverty rate in census tract 3581
The Median household income has increased by 67.19% while poverty rate among
families has increased from 17.2% to almost 37%.
•
Education, employment and occupation
2010
2000
1990
Trend
Unemployment
8.4%
3.9%
7.94%
0.46%
High school or higher
62.2%
61.1%
49.9%
12.3%
Bachelor or higher
11.8%
8.6%
46.0%
-34.2%
Management, business, science,
and arts occupations
Service occupations
20.70%
16.60%
7.13%
4.10%
23.20%
13%
15.94%
10.20%
Sales and office occupations
22.50%
33.10%
6.69%
-10.60%
Natural resources, construction,
16.00%
12.30%
13.69% 3.70%
and maintenance occupations
Production, transportation, and
17.70%
25%
26.88% -7.30%
material moving occupations
Table II.34: Education, employment and occupation in census tract 3581
68
After dropping from almost 8% to less than 4% between 1990 and 2000, the
unemployment rate doubled after 2000 to reach almost 8.5% in 2010. The
neighborhood had also lost more than 34% of its bachelor’s degree holders between
1990 and 2010.
The number of residents occupying management, science, and arts positions increased
by 4%. The same increase was recorded by the number of residents employed by the
construction and maintenance industries. The number of sales and office workers
dropped by 10.6% while the number of in service employees increased by 10.2%.
b. Housing information
2010
2000
1990
Trend
1,292
1,456
1,560
-17.18%
991
1,266
1,374
-27.87%
23.3%
13.05%
11.92%
11.37%
478
664
676
-29.29%
$ 72,400
$ 52,700
$ 28,400
154.93%
513
602
588
-12.76%
Total housing units
Occupied housing units
Vacancy rate
Owner-occupied housing units
Median housing unit value
Renter-occupied housing units
Median gross rent
$
788
$
473
$
253
211.46%
Table II.35: Housing indicators trends in census tract 3581
Housing stock in West Indy neighborhood decreased by 17.18% between 1990 and
2010; vacancy rates increased by more than 11% during the same period. The number
of occupied housing units has decreased by almost 28%; yet homeownership has
69
remained stable with a decline of less than 1%. The median housing unit value has
increased by more than 154% along with rents that increased by more than 200%.
70
c. Built environment
Figure III.7: Zoning map of the area surrounding Southside Partners-I
71
•
Green spaces
Park
Type
Area
Rhodius Park
Community Park
24 acres
Ross Claypool Park
Neighborhood Park
4 acres
Little Valley Park
Mini Park
1.65 acres
Table II.36: Parks within 0.5 mile from Southside Partners-I apartments
Rhodius Park is part of the historic Indianapolis Park and Boulevard System designed by
landscape architect Georges Edward Kessler. In addition to being a green space, Rhodius
Park hosts the Rhodius Park Community Center that includes a fitness center, a youth
game room, a large community room, a dance studio, an arts and crafts area, a
conference room, a full kitchen, and a gym. The center accommodates different
activities that target mainly youth.
Green spaces in West Indianapolis neighborhood also include a community garden. The
garden organizes and hosts the Harvest program, a neighborhood urban agriculture
initiative that provides access to fresh vegetables. It is also home of the Peace Park, an
initiative by a group of youth in the neighborhood to condemn violence and honor
victims of crime and drugs.
72
•
Public amenities
Type of Amenity
Schools
Amenity Name
1. Willian Penn Elementary School (IPS 49)
2. Daniel Webster Family Academy (IPS 349)
Child care
1. Head Start
2. Tiny blessings child care center
Neighborhood Center
1. Mary Rigg neighborhood center
2. Rhodius Park Community Center
Public library
West Indianapolis library
Health center
Southwest Health center
Recreation Center
LaShonna Bates Indoor Aquatics Center
Grocery / Food
1. Billie’s food pantry
2. Safeway foods, Inc
3. Family Dollar store
Post Office
West Indianapolis Station
Table II.37: Public amenities within 0.5 mile radius from Southside Partners-I apartments
Five churches are located within 0.5 mile of Southside Partners-I. The churches
contribute actively to the community life of the neighborhood by providing gathering
places and social assistance to the most vulnerable.
•
Accessibility via public transportation
There is only one city bus line (IndyGO), line 24, close to the project which runs on South
Morris Street. It connects the project to Ameriplex-Indianapolis in the south west and to
downtown. Two stops are conveniently located close to the project. The first one is at
73
the intersection of Morris Street with Blaine Avenue; the second one is at the
intersection of Morris Street and Lee Street.
•
Parking
Parking for the project is available off street on each property. On street parking is
permissible.
•
Streetscape
Most of the neighborhood’s streets have mature street trees and street lights.
The neighborhood has an ongoing trees planting program as part of the efforts to
monitor and address air quality concern. Morris Street and Howard Street have an
ongoing streetscape plan for. The two projects have pending funding from Indianapolis
Power and Light Company and Lilly endowment, Inc.
•
Walkability
Walkscore.com gives Southside Partners-I project a walkability score of 60 out 100. The
website qualifies the location as “somewhat walkable”.
Though the project is conveniently located at five minute-drive from downtown
Indianapolis, which would make many amenities accessible, there is no direct pedestrian
connection with downtown. The residential area of West Indianapolis neighborhood is
isolated from the rest of the city by the surrounding industrial zone as well as by the
high speed roads (i.e. South Harding Street and I-70) that constitute real psychological
and physical boundaries.
74
Parks and amenities listed above are all located within a walkable distance (0.5 mile
radius) from the project. A few chain restaurants can also be found nearby (e.g.
Wendy's, Barry's Pizza, John's Famous Stew, First & Ten Diner, Street Cafe Bridge, Dairy
Queen, Taco Bell, Jack's Pizza)
•
Green building
The energy efficiency standards of the development exceed the applicable federal
and/or state energy efficiency requirements. Equipment in each housing unit includes
an electric stove, a refrigerator, disposal, an air conditioner, washer and dryer hook up.
The units heating system is fueled by gas.
At the time of the application, utility rates at the charge of tenants were estimated at
$102 for the 3-bedroom units and $118 for the 4-bedroom units.
75
2.3. Hanna Village
Figure III.8: Location of Hanna Village apartments
76
Figure III.9: Location of Hanna Village parcel
77
Hanna Village Apartments is located in the south side of Indianapolis at the intersection
of I-465 and South East Street. The project is composed of 120 housing units for a total
residential area of 100,752 sq. ft.
The project was designed as a suburban subdivision of garden apartments on a single
property. All units are designated as low income units and are intended to be occupied
by households earning 60% or less of the AMI.
Year Placed in Service
1992
Allocation Year of tax credits
1991
Total Number of Low-Income Units
120
Number of 1 Bedroom Units
48
Number of 2 Bedroom Units
56
Number of 3 Bedroom Units
16
Developer / Owner
Hanna Village Apartments, L.p.
Manager
H◦I Management
Table II.38: Hanna Village project information
The project was allocated LIHTC in 1991 and was realized through a limited partnership
of three corporations; Davis properties, L.P, Eli Lilly and Company and FM Equities.
Investor
Type of ownership
% ownership
Davis properties, Inc
General partner
1%
Davis properties, L.P
Limited partner
0.9%
Eli Lilly and Company
Limited partner
98%
FM Equities
Limited partner
0.1%
Table II.39: Hanna Village project partnership components
78
The project was allocated an annual amount of tax credits of $412,000. At the time of
the application, approximately 98% of the construction was already completed. The tax
credits were meant to fill an equity gap of $2,289,842. The project did not benefit of any
other public subsidies and didn’t receive any rental assistance. The project development
cost was estimated at $4,954,842 excluding syndication fees or charges.
Contributor
Type of funding
Amount
Summit Bank of Indianapolis
Loan
$ 2,665,000
Davis properties, Inc.
Equity
$ 115,000
Equity
$ 2,725,163.1
Davis properties, L.P.
Eli Lilly and Company
FM Equities
Table II.40: Hanna Village project funding sources
The rent rates at Hanna Village Apartment were fixed at the maximum allowed by the
QAP at the time of the application:
Tenants with 60% or less AMI
Type of units
Number of units
Tenant paid rent
Net sq. ft. per unit
1 bedroom
48
$392
670
2 bedrooms
56
$469
910
3 bedrooms
16
$547
1,102
Table II.41: Hanna village rent thresholds at the application time
Each unit is equipped with electric heating, air conditioning, electric stove, washer and
dryer connections, dishwasher, disposal, refrigerator, kitchen exhaust fan and a ceiling
fan. Based on the utility company estimations, the utility bill at the charge of the tenant
79
was estimated at $54 for the 1-bedroom units, $65 for the 2-bedroom units and $71 for
the 3-bedroom units.
In the LIHTC application, Hanna Village Apartments was subject to the standard
extended use agreement which permits early termination of the extended use period
after the mandatory 15-year compliance period; however the project remains on the
affordable market as the owners retained the ownership of the property.
The rent charges applied currently at the project are:
Tenants with 60% or less AMI
Type of units
1 bedroom
Number of units
48
Tenant paid rent
$515 (1st floor)
Net sq ft per unit
670
$520 (2nd floor)
2 bedrooms
56
$620 (1st floor)
910
$625 (2nd floor)
3 bedrooms
16
$735 (1st floor)
1,102
$740 (2nd floor)
Table II.42: Current rent rates ate Hanna Village apartments
Hanna Village Apartments is located in the qualified census tract number 3806 and is
the only LIHTC project in the tract.
East of project is a commercial area that separates it from University Heights
neighborhood. The project constitutes a buffer between the commercial area along
South East Street on its east border and the apartments’ developments on its west
border.
80
Tract
3806
County
Marion County
State
IN
Status in 2013
Qualified
Poverty Rate
27.3%
Ratio of Tract Median Income to Tract Income Limit
0.946
Full Tract Number
18097380600
Table II.43: Census tract 3806 information
a. Demographic profile
2010
2000
1990
Trend
Population
5,243
4,362
3,944 32.94%
Households
2,137
1,966
1,774 20.46%
family households
1,279
1,093
1,086 17.77%
non family households
858
873
688 24.71%
Average household size
2.45
2.22
2.22 0.23
3.1
2.86
2.83 0.27
31.2
34.3
33.4 -2.2
Average family size
Median age
Table II.44: Demographic growth in census tract 3806
Population growth in Hanna Village Apartments tract recorded a positive trend
consistent with the suburban growth trend. The population has increased by almost a
third along with the number of households that increased by more than 20%. Family
households increased in this tract by 17.77% concurring with non-family households
(24.71%). Unlike the dominant trend in the rest of Marion County, the population has
rejuvenated in the area with a drop of 2.2 in the median age.
81
•
Racial composition
2010
2000
1990
Trend
White
72.90% 91.10% 98.66% -25.76%
Black or African American
8.20%
2.50%
0.66%
7.54%
Hispanic
17.80% 1.80%
1.12%
16.68%
Asian
4.50%
1.30%
0.51%
3.99%
American Indian and Alaska Native
0.50%
0.30%
0.13%
0.37%
Pacific Islander
0.10%
0.00%
0.00%
0.10%
Other Race
10.50% 3%
0.05%
10.45%
Table II.45: Racial composition of census tract 3806
The racial composition of the tract reflects the trend of Marion County. The area
became more diverse with an increase in the number of population belonging to
minorities. The strongest trends were registered among the Hispanic community with
an increase of 16.68%. White population has decreased by more than 25%.
•
Income and poverty rate
2010
2000
1990
Trend
Median household income
$ 34,226
$ 32,216
$ 28,162
21.53%
people below poverty level
19.6%
9.2%
6.9%
12.7%
families below poverty level
27.3%
4.8%
5.5%
21.8%
Table II.46: Income and poverty rate in census tract 3806
The increase in poverty rate in the neighborhood between 1990 and 2010 is remarkable.
The number of families below poverty level went from 5.5% to more than 27%. This
partly explains the 22% low increase in the median household income in the area. When
82
corrected for inflation (1990 median household income has the same buying power as
$46,984 in 2010), real median household income has actually decreased by 27.15%.
•
Education, employment and occupation
2010
2000
1990
Trend
Unemployment
4.2%
2.3%
2.97%
1.23%
High school or higher
80.1%
77.9%
79.9%
0.2%
Bachelor or higher
12.8%
15.4%
12.6%
0.2%
Management, business, science,
and arts occupations
Service occupations
29.60% 27.4%
14.02% 15.58%
12.70% 15.2%
8.88%
3.82%
Sales and office occupations
29.80% 29.3%
8.10%
21.70%
Natural resources, construction,
and maintenance occupations
11.60% 13.9%
13.29% -1.69%
Production, transportation, and
material moving occupations
16.40% 14.2%
19.70% -3.30%
Table II.47: Education, employment and occupation in census tract 3806
Educational achievement of Hanna Village census tract’s residents barely changed
between 1990 and 2010. Unemployment is low overall despite an increase of 1.23% that
brought the unemployment rate from 2.97% in 1990 to a low of 2.3% in 2000 before
reaching 4.2% in 2010. The most visible changes in the neighborhood residents’
occupations were among sales and office professionals; their number increased by more
than 21%, followed by management, business, science or arts professionals whose
number increased by 15.58%
83
b. Housing information
2010
2000
1990
Trend
Total housing units
2,325
2,092
1,865
24.66%
Occupied housing units
2,137
1,966
1,774
20.46%
Vacancy rate
8.09%
6.02%
4.88%
3.21%
963
922
792
21.59%
Owner-occupied housing
units
median housing unit value
Renter-occupied housing
units
Median gross rent
$ 111,000
$ 92,000
1,174
$
627
$ 60,700
1,044
$
517
885
$
358
82.87%
32.66%
75.14%
Table II.48: Housing indicators trends in census tract 3806
Along with the population growth, the housing stock increased by almost 25%.
Homeownership remained stable around 45% throughout the 20 years between 1990
and 2010. Median home value increased by almost 83% and rents increased by slightly
more than 75% consistently with Marion County trends.
84
c. Built environment
Figure III.10: Zoning map of the area surrounding Hanna Village apartments
85
•
Green spaces
Park
Bluff Park
Type
Area
Neighborhood park
4 acres
Table II.49: Green spaces within 1 mile radius from Hanna Village apartments
A playground is located on the project’s property.
•
Public amenities
Type of Amenity
School
Amenity Name
St. Roch Catholic School (Catholic)
Raymond F. Brandes Elementary School (IPS 65)
Abraham Lincoln Elementary School (public)
William Henry Burkhart Elementary School (public)
Special Education
Child care
B.U.I.L.D. (University of Indianapolis) - Disabled Student
Services
Head Start - SOUTHEAST I
University Heights United Methodist Children's Ministry
Woodland Wee Wonders (registered day care ministry)
Public library
Krannert Memorial library (University of Indianapolis)
Common building
Hanna Village community center
Health center
VOCA CORPORATION OF INDIANA
Hanna WIC Clinic - Women, Infants and Children (MCHD)
Grocery / Food
Kroger Deli
Family Dollar
Table II.50: Public amenities within 0.5 mile radius from Hanna Village apartments
The tract 3806 itself offers very few neighborhood amenities and public services. Most
of the amenities, located within less than 0.5 mile radius from the project, are located
86
across South East Street in University Heights neighborhood and are not accessible on
foot. Most schools assigned to the residents of Hanna Village apartments are located on
the south side across I-74.
•
Accessibility via public transportation
There is only one bus line that serves Hanna Village Apartments area. IndyGo bus line 22
connects the area to downtown north and to the community hospital south.
•
Walkability
The project is adjacent to a shopping area but the sprawling layout doesn’t make it
pedestrian friendly. Though Walkscore.com awards a score of 65 out of 100 to Hanna
Village Apartments, due to the presence of amenities in the neighboring commercial
zone, a car will be necessary for most trips to nearby destinations due to the absence of
sidewalks and the suburban design of the area.
87
Chapter III ANALYSIS AND CONCLUSIONS
1. Results
Indicator
Unity Park
3516
3517
Southside
Hanna
Marion
Partners-I
Village
County
(3581)
(3806)
Population
- 0.8%
- 34.4%
- 26.80%
+ 32.94%
+ 11.76%
Households
+ 14.4%
- 28.72%
- 27.87%
+ 20.46%
+ 12.75%
Median household
Income
Poverty rate
+ 307.62%
+ 162.94%
+ 67.19%
+ 21.53%
+ 49.36%
- 27.30%
- 19.0%
+ 19.7%
+ 21.8%
+ 4.2%
Unemployment rate
- 21.83%
+ 4.8%
+ 0.46%
+ 1.23%
+ 1.4%
Educational achievement
+ 39.20%
- 51.7%
- 34.2%
+ 0.2%
+ 5.9%
Median home value
+ 410.03%
+ 375.51%
+ 154.93%
+ 82.87%
+ 99.02%
Median rent
+ 146.06%
+ 235.47%
+ 211.46%
+ 75.14%
+ 73.54%
Vacancy rate
- 8.33%
+ 11.64%
+ 11.37%
+ 3.21%
+ 3.80%
Table III.1: Indicators trends of Marion County and the case studies
1.1.
Demographics
a. Population growth
370,000
Number of households
360,000
350,000
340,000
330,000
320,000
310,000
300,000
290,000
1990
2000
2010
Year
Figure III.1: Marion County households’ growth
2500
2000
Unity Park 3516
1500
Unity Park 3517
1000
Southside Partners I
Hanna Village
500
0
1990
2000
2010
Figure III.2: Households’ growth in the three cases studies
Marion County experienced a positive trend in household growth between 1990 and
2010. However among the case studies of this research, only Hanna Village tract
89
experienced population growth. Southside Partners-I and Unity Park tracts, in the other
hand, had a noticeable loss of households during the period between 1990 and 2000.
This trend is however addressed between 2000 and 2010 in the tract 3516 that gains
back its households in 2010.
b. Median household income
$50,000
$45,000
$40,000
$35,000
Marion County
$30,000
Unity Park 3516
$25,000
Unity Park 3517
$20,000
Southside Partners I
$15,000
Hanna Village
$10,000
$5,000
$1990
2000
2010
Figure III.3: Median household income trend in the three case studies
A similar trend can be noticed among the median household income curves of the case
studies and Marion County between 1990 and 2000. But while the curves progress is
slowed between 2000 and 2010 in Marion County, Southside Partners and Hanna Village
apartment tracts, Unity Park census tracts registered a strong increase in their median
household income.
90
In 1990, Hanna village starts with a median household income equivalent to the county
median household income, but does not sustain the same progress during the next two
decades. By 2010, the median household income has dropped below county level.
c. Poverty rate
50.0%
45.0%
40.0%
35.0%
Marion County
30.0%
Unity Park 3516
25.0%
Unity Park 3517
20.0%
Southside Partners I
15.0%
Hanna Village
10.0%
5.0%
0.0%
1990
2000
2010
Figure III.4: Poverty rate trends in Marion County and case studies
The poverty rate in Unity Park tracts has decreased significantly compared to Marion
County and the rest of the case studies tracts during the observation period. The
poverty rate in the census tract number 3516 has in fact dropped below the county level
and therefore does not figure among the qualified census tracts list anymore.
Hanna village tract in the other hand had seen its poverty rate increasing from below
County level to above 25%.
91
d. Unemployment
30.0%
25.0%
20.0%
Marion County
Unity Park 3516
15.0%
Unity Park 3517
Southside Partners I
10.0%
Hanna Village
5.0%
0.0%
1990
2000
2010
Figure III.5: Unemployment rate trends in Marion County and case studies
Unity Park neighborhood, located within the limits of the census tracts 3516 and 3517
has recorded high unemployment rates in 1990. These rates dropped in 2000, especially
in the census tract 3516 where unemployment rate joined the County rate in 2000. The
tract’s unemployment trend has since then been consistent with the county trend. The
census tract number 3517 unemployment rate remained however higher in comparison
with the rest of the neighborhoods and with the county level.
Southside Partners-I and Hanna Village apartments’ tracts had a consistent trend with
the county between 1990 and 2010.
92
e. Educational achievement
90.0%
80.0%
70.0%
60.0%
Marion County
50.0%
unity Park 3516
40.0%
Unity Park 3517
30.0%
Southside Partners I
Hanna Village
20.0%
10.0%
0.0%
1990
2000
2010
Figure III.6: Percentage of residents holding a bachelor or higher trends in Marion
County and case studies
In 1990, Hanna village tract and one of Unity Park tracts (tract 3516) shares of Bachelor
holders were both below County level. The number of bachelor holders remained
almost constant in Hanna village during the observation period while it increased
significantly between 2000 and 2010 in the tract 3516. By 2010 the tract 3516 was the
only case where the percentage of college graduates exceeded the county average.
Southside Partners-I and the tract 3517 (unity park) were both home of a considerably
high number of bachelor graduates in 1990. In 2000, Southside Partners-I tract share of
college graduates dropped to below 10% (county level at 25.4%). The number of
bachelor holders or higher in the tract 3517 had slightly increased between 1990 and
93
2000 following the county trend, then dropped significantly in 2010 to below Marion
County level.
f. Occupation
70%
60%
50%
Marion County
40%
unity Park 3516
Unity Park 3517
30%
Southside Partners I
20%
Hanna Village
10%
0%
1990
2000
2010
Figure III.7: Percentage of Management, business, science and arts professionals in
Marion County and case studies
The number of management, business, science and arts professionals in Southside
Partners-I and Hanna Village tracts followed a consistent trend with Marion County
during the observation period. However the number of these professionals has
increased significantly between 2000 and 2010 in Unity Park tracts.
94
45.00%
40.00%
35.00%
30.00%
Marion County
25.00%
unity Park 3516
20.00%
Unity Park 3517
Southside Partners I
15.00%
Hanna Village
10.00%
5.00%
0.00%
1990
2000
2010
Figure III.8: Percentage of service professionals in Marion County and case studies
The number of service professionals in the other hand has experienced different trends.
We notice however that overall the trend has been negative in the case of Unity Park
and positive in Southside Partners-I and Hanna Village tract consistent with Marion
County trend.
95
Sales and office occupations
40.00%
35.00%
30.00%
Marion County
25.00%
unity Park 3516
20.00%
Unity Park 3517
Southside Partners I
15.00%
Hanna Village
10.00%
5.00%
0.00%
1990
2000
2010
Figure III.9: Percentage of sales and office professionals in Marion County and case
studies
The trend in Sales and offices occupations in the three case studies is at the opposite of
Marion County trend. While the number of professionals in this sector has been
decreasing in the county over the 20-year period, it increased significantly between
1990 and 2000 in the three case studies tracts. Southside Partners-I has even exceeded
the county average in 2000.
96
1.2.
Housing
a. Median home value
$200,000
$180,000
$160,000
$140,000
Marion County
$120,000
Unity Park 3516
$100,000
Unity Park 3517
$80,000
Southside Partners I
$60,000
Hanna Village
$40,000
$20,000
$1990
2000
2010
Figure III.10: Median home values trend in Marion County and case studies
Home values have increased in all case studies consistent with Marion County. But while
the median home value increase has been slowed between 2000 and 2010 in Hanna
Village and Southside Partners-I along with Marion County, Unity Park has experienced a
significant increase during the same period. The median home value in the tract 3516
has in fact exceeded the county’s median value.
97
b. Median rent
$900
$800
$700
$600
Marion County
$500
Unity Park 3516
$400
Unity Park 3517
Southside Partners I
$300
Hanna Village
$200
$100
$1990
2000
2010
Figure III.11: Median rent rate trends in Marion County and case studies
Rent trends in all case studies and Marion County have been positive. The most
remarkable increase took place in Southside Partners-I, which saw its rent rates rising
well above the county average rate.
98
c. Vacancy rate
45.00%
40.00%
35.00%
30.00%
Marion County
25.00%
Unity Park 3516
20.00%
Unity Park 3517
Southside Partners I
15.00%
Hanna Village
10.00%
5.00%
0.00%
1990
2000
2010
Figure III.12: Vacancy rate trends in Marion County and case studies
The vacancy rate has increased in all the studied tracts during the studied period except
in the tract 3516 (Unity Park), where it decreased significantly between 1990 and 2000.
Between 2000 and 2010, vacancy rates increased even more rapidly, especially in
Southside Partners-I tract.
99
1.3.
Built environment indicators
Amenity
Unity Park
Southside Partners-I
Hanna Village
Green Space
5
3
1
Schools
6
2
4
Child care
6
2
3
Community center
-
2
1
Public library
1
1
1
Health center
3
1
2
Recreation center
2
1
-
Grocery/ food
3
3
2
Public transit (bus lines)
5
1
1
Walkability score
71
60
65
*Numbers refer to the number of units within each amenity.
Table III.2: Number of amenities present in each case study
The location of each case study was determinant with respect to the availability and
accessibility of amenities and public services. Unity Park and Southside Partners-I
neighborhoods had the most pedestrian-friendly environments. All listed amenities for
these two case studies are accessible on foot. Unity Park, however, surpasses Southside
Partners-I in the number of units in each amenity category.
Though Hanna Village’s walkability score is higher than Southside Partners-I due to the
proximity, in distance, of many amenities, its suburban layout makes it a very unfriendly
environment for pedestrians.
100
2. Discussion
The presence of LIHTC projects in the observed neighborhoods had different effects on
the quality of life of their residents. Two (Unity Park and Southside Partners-I) of the
three case studies recorded positive changes while the third (Hanna Village) have seen
its quality of life indicators measures decline.
In the two cases of Unity Park Homes and Southside Partners-I, their downtown location
has greatly contributed to the positive change in their neighborhoods. Like many
metropolitan and even smaller cities in the US (El Nasser, 2011), downtown Indianapolis
experienced an increasing housing demand as downtown living becomes more
attractive for many US households, especially young families and empty nesters (Nelson
& Young, 2008). This demand has driven up property values as well as rent rates in inner
city neighborhoods as observed in Unity Park and West Indianapolis.
Another factor that contributed to the positive change in Unity Park and Southside
Partners-I neighborhoods, is the positive externalities generated by the revitalization
programs or projects that took place. Such interventions and investments have
addressed blight and improved the infrastructure and built environment as a whole.
Revitalization projects have a positive impact on surrounding property values. This
impact is not similar for all types of interventions, it is proportional to the scale of the
investment (Schill, Ellen, Schwartz, & Voicu, 2002). In the case of Unity Park
neighborhood, the scope of the positive impact steered by Fall Creek project
101
($24,000,000) is clearly larger than the impact of the West Indianapolis neighborhood
revitalization plan ($2,250,000).
The revitalization project in the case of Unity Park created a new housing stock that
attracted higher income and higher educated population. New downtown
redevelopments that provide new housing stock combined with the convenience of
downtown available amenities and public services are more likely to draw high income
residents leading to the gentrification of inner city neighborhoods (Brueckner &
Rosenthal, 2009). This trend is consistent with the observed gentrification ongoing in
Unity Park and West Indianapolis neighborhoods.
Hanna Village quality of life indicators did not experience the same positive trends. The
real median household income decreased by more than 25% and poverty rate increased
5 times more than in the county during the 20-year observation period. On the other
hand Hanna Village neighborhood was the only case recording population growth
among the three cases studied in this research. Hanna Village neighborhood has also the
lowest vacancy rate and the lowest unemployment rate.
Overall, unemployment trends in all case studies were consistent with Marion county
and the national trend. Through the changes that occurred between 1990 and 2010,
there was a clear increase in unemployment rate between 2000 and 2010, which
reflects the effect of the economic recession that happened between 2007 and 2009.
On the national level the recession have caused unemployment rate to rise by 5.6%
102
between May 2007 and October 2009. The GDP has also fell by more than 5% during the
same period (Rothstein, 2012).
3. Conclusions
The neighborhood changes that occurred during the twenty-year observation period of
the three cases studied in this research cannot be attributed to the sole presence of
LIHTC projects. Different urban trends have influenced the changes of the observed
indicators.
In all three cases, the location of the neighborhood and the presence of revitalization
projects were key to explain the observed trends. The positive trends observed in Unity
Park and West Indianapolis neighborhoods were influenced by the location of the
projects (urban), the presence of revitalization investments or by both. In the case of
Hanna Village, a suburban project that did not accommodate any major urban project,
the census tract was exposed to more negative changes (increase in poverty and
unemployment among its residents and decrease of real median household income)
since the LIHTC project was implemented.
As part of a place-based program, LIHTC projects are critical for the creation of future
mixed income neighborhoods that can minimize gentrification effects and create more
inclusive communities as shown in Unity Park and Southside Partners-I case studies.
However the implementation of isolated LIHTC projects with high number of affordable
103
housing units cannot alone benefit distressed neighborhood if it is not included in
broader efforts of development and revitalization.
104
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