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Wednesday, April 24, 2024

Rent prices are up in Indianapolis

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Rapid rent increases are easing across the U.S. — but not in Indianapolis.

Driving the news: Indianapolis-area rent prices at the end of March were 7.7% higher than a year earlier, according to a new Harvard Joint Center for Housing Studies report, making this one of the only markets still experiencing skyrocketing rent growth.

Other cities with fast-rising rents include Miami (up 9.5%), Cincinnati (8.2%) and Newark, New Jersey (8.2%).

Why it matters: Indianapolis is experiencing a housing price shock that is transforming the market from affordable to unaffordable almost overnight and leaving low-income families with dwindling options.

Between 2019 and 2021, Indiana lost 41,000 housing units that had been priced at $600 a month or lower, per the Harvard housing study.

The report attributes the reduction in affordable units to rent hikes, property upgrades and conversions to owner-occupied houses.

What they’re saying: “Such substantial losses, particularly in states with historically lower rents, make it even more difficult for households with low incomes to secure affordable rentals,” the authors write.

The big picture: U.S. rent growth has slowed, and in some markets even reversed, Axios’ Emily Peck writes.

National asking rents on new leases in May were a modest 1.5% higher than a year earlier, according to CoStar.

Notable drops: In Austin, rents are down 2.7% from last year; in Las Vegas, -2.9%; in Orlando, -0.3%; and in Phoenix, -2.8%.

Reality check: Most price cuts and stalled rent growth reflect discounts on upscale apartment buildings, especially in areas where lots of new apartments are opening at once.

Discounts and apartment incentives can be found in Indianapolis, too, but they primarily benefit middle- to upper-middle-class renters.

The bottom line: Indianapolis is losing its historical affordability advantage, largely at the expense of low-income renters.

For more news from the Indianapolis Recorder, click here.

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