How the current market is creating opportunities for improvement in the homebuilding industry
Over the past few months, the slowdown of the pandemic housing boom has given homebuilders in Indiana time to catch their breath. They could not build fast enough to keep up with increased demand and delays in materials, equipment and labor did not make efforts any easier.
In fact, a recent article from the National Association of Home Builders (NAHB) reports that builder confidence once again fell in August, marking the eighth straight month of weak builder sentiment on future home sales.
Now, as the industry experiences a slowdown driven by inflation, higher fuel prices, rising interest rates and other economic shifts, builders across the Hoosier state have an opportunity to adjust, catch a breath, and reflect on their business practices.
WHY WE NEED TO ENHANCE HOOSIER AFFORDABILITY
From job opportunities to small-town, Midwestern charm, there’s plenty of reasons why people want to settle down in Indiana. As a state with historically affordable housing, the continuing increase of housing prices over the past five decades has left Hoosier residents struggling to reach their American Dream. This unfortunate trend is stunting the growth of communities that Indiana needs to thrive. When homeowners cannot settle down, communities cannot grow. Now more than ever is the time to work together to optimize and improve processes that have not been working.
DRAFTING THE BLUEPRINTS FOR A BETTER HOMEBUILDING EXPERIENCE
BAGI is committed to improving the housing affordability crisis that is affecting homeowners across the state of Indiana. To help residents achieve their home buying dreams, we take action by:
- Connecting with industry leaders and organizations to help train their teams so they can provide better services to their customers
- Working with municipalities to balance the development fees and restrictions that affect building costs for prospective buyers
- Partnering with organizations like Build Indiana Roots to raise awareness and brainstorm more impactful solutions that protect homebuyers and help grow the state
- Staying up to date on current affairs and sharing our views on issues to create better legislation that helps homeowners
At BAGI, we are motivated to use this time as a way to enhance practices, improve experiences, and increase the ability to obtain quality, affordable homeownership in the Hoosier state. Even as the housing marketing continues to change, we will keep doing our part by keeping the industry moving and bettering the homebuilding experience for hopeful Hoosier homeowners.
COMBATING CRISIS THROUGH ADVOCACY
When it comes to housing affordability, there is a significant misunderstanding of what affordable housing actually looks like. Indiana has historically been one of the most affordable states to live in, but rising costs, labor shortages, and lack of developed lots has completely changed the market and created an affordability crisis that is plaguing the entire country.
A few years ago, the average price of a home in Indiana would have started at $200,000. Now, that number has doubled to $400,000. For the first time in decades, a first-time homebuyer’s ability to own a home has been dramatically reduced, eliminating a demographic that relies on finding a home to settle in. In fact, research from Reuters shows that first-time homebuyers only make up 27% of home sales.
WHAT IS CREATING HOUSING AFFORDABILITY CHALLENGES?
Labor shortages, a 42% jump in cost for building materials, and a lack of developed lots have stifled the current market and driven up the prices of homes across Indianapolis. Builders are still working to catch up on pre-COVID-19 sales while simultaneously trying to recruit more workers from a workforce that is only getting higher in average age.
“One of the BAGI’s biggest goals is creating an environment in Indianapolis where people are able to put down roots and live their entire lives,” Drake Branda, Director of Government Affairs at BAGI, said. “We want homeowners to be able to live here comfortably through all economic cycles and be part of flourishing communities throughout the area, and we want builders to thrive as well.”
To combat the lack of affordable housing in Indianapolis, BAGI has several advocacy efforts in place to help bridge the gaps between municipalities and builders.
HOW BAGI FILLS GAPS IN HOUSING AFFORDABILITY
BAGI partners with universities throughout the state, like Purdue University, Ball State University, and Indiana University, to conduct studies that assess how housing and zoning regulations affect new development which then impacts homeowners on a cost basis. After gathering research, BAGI can collaborate with municipalities to improve mandates and serve as a voice for those trying to settle down in those communities.
From assisting with permit approval and releasing dated housing bonds to influencing political action and legislation, BAGI has its hand in multiple efforts that help streamline the building process and drive costs down. BAGI also works closely with the Indiana Builders Association to identify any regulations that stifle the ability of Hoosiers to move and correct them with the help of municipalities.
Since this issue is not only affecting Indiana, BAGI collaborates with associations across the country through the National Association of Home Builders to learn more about advocacy efforts in other states and brainstorm how those ideas can be adapted to fit the needs of Hoosier homeowners in the Greater Indianapolis area.
BAGI’s advocacy board and passionate members devote a significant amount of time towards improving housing affordability. Whether it’s members sharing ideas and encouraging others to get involved or the advocacy board giving direction on educational, legal and political actions, the fight for affordable housing is an association-wide effort that is deeply appreciated.
“We believe that affordable housing should be top of mind in every municipality so our Central Indiana residents can afford to live the American Dream of homeownership,” Branda said. “We always want to advocate for our members in the world of affordable housing, economic development and government locally and state-wide.”
By working together with state officials and homeowners, BAGI is hopeful that worlds can be merged to bridge approval gaps while adhering to municipality standards and procedures, creating the achievable housing and responsible, balanced policies necessary to grow thriving communities. To learn more about BAGI’s efforts to improve housing affordability in Indianapolis, visit bagi.com and buildindianaroots.com.
