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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowTwo decades of sustained growth came to a close in Indianapolis last year when the city experienced a population decrease, raising some concerns about its economic future.
The drop of 5,600 residents between July 2020 and July 2021 happened during the pandemic, when the deaths of more than 1,200 people in Marion County were blamed on the coronavirus during the same time period. Meanwhile, the practice of working remotely took hold, which may have influenced departures from the city.
Observers have varying opinions about the reversal of a growth trend that lifted the population of Indianapolis from 782,000 residents in 2010 to 887,600 residents in 2020. The 2021 population figure is 882,000.
Bill Oesterle, founder of a pair of worker recruitment companies, TMap and MakeMyMove, said the size of the population decrease is concerning.
“In cities across the U.S., we’re seeing that the pandemic hit the urban core,” Oesterle said. “Indianapolis hasn’t been insulated from that, and it’s troubling.”
Michael Hicks, director of the Center for Business and Economic Research at Ball State University, refers to population growth as the strongest single sign of regional economic health.
When reviewing the 2021 data, Hicks said the first post-COVID population adjustments are underway. Citing the rise of remote work as a significant development, Hicks said population patterns may emerge across multiple decades.
“It’s altogether possible that we’re in a lengthy period where the traditional patterns of household relocation are going to continue to be tested,” Hicks said. “We are going to see a different pattern emerge, so there are more people living in places where they want to live and not be concerned about what the available job options are for them.”
Matthew Kinghorn, senior demographer at the Indiana Business Research Center at the Indiana University Kelley School of Business, analyzed U.S. Census Bureau data on counties and cities this spring.
Kinghorn said an estimated net out-migration of more than 9,200 Marion County residents was the “primary driver” of the population decline in Indianapolis.
He’s not ready to pronounce remote work as a significant factor.
“It’s way too early for me to be able to say whether or not people were able to take advantage of remote work situations to move to less populated areas,” Kinghorn said.
Portia Bailey-Bernard, vice president of economic development at Indy Chamber and a mayoral appointee for economic development, said the decrease in the city’s population isn’t overly alarming. Bailey-Bernard notes, for instance, that the occupancy rate of multifamily buildings in downtown Indianapolis is 93%.
“We know cities across the nation saw a decrease during the pandemic,” Bailey-Bernard said. “Indianapolis wasn’t unique in that population loss, and I don’t anticipate seeing a decrease for years to come.”
Popular suburbs
Westfield topped the list of Indiana’s fastest-growing cities with a 7.7% population increase from 2020 to 2021. The Hamilton County community became one of seven cities in the United States to surpass 50,000 in population in 2021. Jeffersonville, an Indiana suburb of Louisville, Kentucky, also joined the 50,000 club.
Four communities in the Indianapolis metropolitan area followed Westfield on the state’s fastest growing list: Whitestown, with an increase of 7.4%; McCordsville, 7%; Avon, 5.7%; and Bargersville, 5.4%. A trio of Lake County communities in the Chicago metropolitan area landed on Indiana’s Top 10 of fastest-growing cities: St. John, up 4.9%; Cedar Lake, 3.9%; and Winfield, 3.7%.
“It’s been the story for a while in Indiana, but a handful of metropolitan areas are fueling all the growth in the state,” Kinghorn said.
Fishers and Carmel each eclipsed the 100,000 population mark for the first time in 2021.
Bolstered by these suburbs, the Indianapolis metropolitan area has fared well when compared with population growth in other Midwestern cities.
Between 2010 and 2020, the metropolitan area of Indianapolis grew 9.97%, or a rate that trailed only Louisville (12.87%), Columbus, Ohio (10.2%) and Minneapolis (10.05%).
In 2021, the metropolitan area of Indianapolis grew 0.6%, topping Columbus (0.5%), Cincinnati (0.1%), Louisville (0.0%), Detroit (a decrease of 0.5%), Cleveland (a decrease of 0.5%) and Chicago (a decrease of 1%).
Efforts are underway to bolster the Indy area’s population.
In December, the White River Regional Opportunity Initiative—which includes Marion, Hamilton and Madison counties along with the communities of Zionsville and McCordsville—was selected as a recipient of a $20 million Regional Economic Acceleration and Development Initiative grant focused on the White River.
“We have this amazing natural amenity,” said Bailey-Bernard, an Indy Chamber executive. “We could have a real opportunity to do something with that riverfront.”
Picking your place
Ball State faculty member Hicks said work-from-home policies provide people with a broader set of options for choosing where to live.
“Instead of moving to a bigger home in the suburbs when you have kids, now people are potentially moving before they form families,” Hicks said. “And they may be looking for different things. They may be looking for really affordable housing, or they may be looking for a hobby farm someplace. If you only have to be at work in Indianapolis one day a week, then you could live in Muncie or Portland or South Bend or Marion or Terre Haute.”
In downtown Indianapolis, Hicks predicts that unused office space will be transformed into apartments.
“I think businesses could say, ‘Maybe what I’ll do is turn half of those office spaces into short-term apartments,’” Hicks said. “‘When I hire somebody, I give them six months for free in my apartment to search around Indianapolis to decide where they want to be.’ That sort of innovation is going to come. It’s going to be what a lot of higher-end workers are going to be looking for.”
Oesterle, who co-founded Angie’s List, said the era of remote work poses challenges to companies in the middle of the city.
“There are knowledge-based workers who don’t have to be on site, and they figure out they can avoid a commute and parking and all of that,” Oesterle said. “Downtown is going to have to work hard to improve its appeal to people.”
Bailey-Bernard said the future can be seen in the 16 Tech and Bottleworks developments that combine places to work with quality-of-life amenities. Up next are makeovers of the historic Stutz Motor Car Co. factory complex and the Elevator Hill campus that once was home to Angie’s List headquarters.
“We’re seeing a shift from our traditional towers downtown to more neighborhood district-type office space,” Bailey-Bernard said. “Places that have all the amenities: Go to the office, go work out, grab a beer after work, go to a movie, go to a restaurant.”
Pitching Indiana
Overall, Indiana added 20,300 residents in 2021 to reach a total population of nearly 6.81 million. Indiana Business Research Center demographer Kinghorn said 20,300 stands as the state’s smallest increase since 2015 and falls short of Indiana’s average annual gain of 30,000 residents during the previous decade.
Oesterle sums up the situation by saying, “The state isn’t growing fast enough.”
Increased birth rates and expanded refugee resettlements are two ways to boost population, Oesterle said.
In terms of attracting workers, Oesterle said anyone in Indiana can pitch the state as a place to live.
The Indiana Destination Development Corp. recently unveiled its “IN Indiana” campaign that supplies free marketing resources to any business, small town, city and destination. The idea, according to Visit Indiana, is to create a unified message to attract new residents and tourists.
“Communities are going to have to develop the capability to market themselves,” Oesterle said. “They haven’t had to do that in the past, and they now have to.”•
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The anti-immigration stance of the Trump Administration didn’t help.
More to the point, A.T., since you apparently missed it: The policies and directives (or lack thereof) from the typically-Democrat administration of Joe “Boss” Hogsett are the primary contributing factor. Ask the folks who are leaving and why and you’ll likely not have any support for your silly notion. Who wants to live in a crime-infested city in which the administration had a hands-off policy when the rioters took over after the George Floyd incident and scarred the downtown, both physically and emotionally, for months on end thereafter?
Bob, Marion County’s growth has always been heavily influenced by international immigration for decades. International immigration has always been the determining factor in the county’s net increase in population.
An anti-immigration, xenophobic administration is absolutely going to have an impact on that, which was exacerbated by the effective half of any international migration during COVID. Downtown’s population has continued to grow with an estimated residential occupancy rate of 97% as of March 2022.
Do better.
Trump! Corrected – his anti-illegal immigration policy didn’t help America’s stale, urban core.
Bob P. (sarcasm) I am sure that Biden had a HUGE influence on population growth in 2020.
Trump made legal immigration harder, too. Don’t present that bad-faith argument (tbh, it might not qualify as bad faith. It’s just a lie).
It will be really be interesting to see how the conversion of downtown office space into apartments changes the dynamic over the next few years.
And the reality remains that people are fleeing throughout the state of Indiana and moving to the Indianapolis metropolitan area. I don’t think throngs of people are working for Indianapolis area companies and living way, way away in rural Indiana.
Hicks is sorely mistaken when he says, “Instead of moving to a bigger home in the suburbs when you have kids, now people are potentially moving before they form families. And they may be looking for different things. They may be looking for really affordable housing, or they may be looking for a hobby farm someplace. If you only have to be at work in Indianapolis one day a week, then you could live in Muncie or Portland or South Bend or Marion or Terre Haute.”
People choose to live in Indianapolis because of the convenience to experience all that it has to offer, from live theatre and marquee music concerts to professional sports and award-winning dining. Muncie, South Bend, and Terre Haute might be “exciting” places to live if you were born and raised in Portland or Marion or some other small rural town in Indiana, but what they offer in terms of “live, work, play” experiences are but a small slice of what the state’s largest city is.
The proof is, and I think will continue to be, the number of young professionals who choose to stay in Indianapolis to be close to where the action is. Even boomers are choosing to stay, many moving even closer to the convenience of downtown condos and apartments because they reject the idea of moving to an old folks home or farm.
Agreed with your comments.
In fact I’m not even sure that Indy ( Marion County ) has lost population.
Marion County averaged an annual increase in population of between
7000 and 8000 people. Then just suddenly started losing around 5,500 people?
I find that very hard to believe.
One of the mechanisms used to measure population increase or decrease is
U-Haul Rentals.
However, we know we have an exploding Hispanice population. I’m guessing
that they typically do not rent U-Hauls for various reasons.
Plus we’ve had a large population influx from Africa and Southeast Asia.
I think these groups are more than off setting people moving out. But are
hard to track and measure. That’s why many states and cities were undercounted
by a significant margins during the last census.
I think that is happening here in Indianapolis.
Keith has a good point. I am wondering how the botched census under Trump may have effected the numbers, especially for the hispanic population. I have not seen any detailed analysis (maybe the details aren’t released yet), but I a would not be surprised to see of this is just a result of sloppy, and politically motivated census count in the city.
Oh, the intentional failures of the 2020 Census definitely had something to do with this. Republicans want to deny as much funding to urban and non-white areas as possible. The most efficient way to do that is to ensure that they aren’t properly accounted for and that their representation is diminished as Congressional and State Legislative boundaries are redrawn.
Where the action is? You can’t walk the canal without the real possibility of being assulted. The “I’ll drink to that Mayor” has totally lost control of the city. Very sad to have seen what was built into a great city burned to ground. So sad, but times moves forward, and so do the residents who can afford to. What’s left is the slow deteroration like Detroit, Cleveland, St. Louis etc etc etc.
DonALD F. ~ I sense a cargo ship full of hyperbole in your comment. Such a shame because my wife and I – boomers – have experienced downtown on many levels and many different times of the day and night. We take the Red Lone from Broad Ripple to experience it all…concerts, games, restaurants, museums, and more. Of course, we know that we have nothing to fear but fear itself.
The city’s idea for downtown housing consists mostly of expensive apartments and government subsidized apartments with a few high-end condos mixed in. Perhaps the city could be bothered to take a hard look at their zoning laws instead of just blowing this off as a non issue. Besides, population decrease or not zoning laws should be examined.
The new bus lines have the potential to work well but you can’t just build transit and expect people to come. There needs to be safe pedestrian and bike access all around the bus lines to make more people want to use them. I’m not sure the necessary redevelopment efforts are being placed near the bus lines to maximize their potential.
The trails have been a success for the city but biking still isn’t at the forefront of the city like it should be. Being able to safely bike to places is a huge appeal to many people and most communities view their trails for recreational use only. Indy could be really different with biking as a transportation mode if they made it more of a priority. There is some work in terms of widening the Monon and Nickel Plate but you are not scratching the surface of what you can be as a bike friendly city with that.
Missing middle housing, improved pedestrian/biking infrastructure, and maximizing potential of a big project like the bus line would go a long way to not just maintaining population levels but helping the city grow. These are things that would play well to what the strengths of the city can be.
I see you’ve never even looked at the zoning ordinance.
The last revision in the zoning laws was a pretty amazing overhaul, mainly working to create density in the urban core. Unfortunately under capitalism, market forces are still the key driver. Those few government subsidized apartments are the direct counter to the market forces that create expensive apartments and condos.
This is one of the best articles produced by IBJ this year. Well written and well researched it offers a much appreciated range of perspectives regarding the cause of and concerns about Indy’s population loss. I enjoyed reading it and have learned from it. Kudos to Dave Lindquist and the editors!
I think the remote work factor is overblown here. The bottom line is people want to live in a place they feel safe and enjoy themselves. I think it’s very disingenuous to ignore the crime spike within the city then wonder why people are leaving. Take care of the basics like safety, schools, and infrastructure (ie roads, parks etc) and people will want to stay. Indy is failing at all of these.
Chris W. ~ Support a hike in property taxes to pay for those things you cite and it would be more likely to happen.
Marion county already has the highest property taxes in the state as a percentage of home value, and is the the top half of all counties in the country. I would gladly pay more if I knew it would work…but it hasn’t so far.
All residential property taxes in Indiana are constitutionally capped at 1% of assessed value.
Indianapolis/Marion County’s tax rate is the same as every other city and county in the state.
Chris B. — Not when you add in the special assessments (or whatever they’re called) to subsidize the schools and the bus lines.
Chris W. ~ Property tax rate caps exist for just one reason: limit local government spending. That’s a good concept when all things are equal, but Indianapolis has more and different needs than any other community in the community in the state. One example is street and road maintenance. The formula for allotting state funds to assist local jurisdictions with this need is based on linear miles, not lane miles. Indy has far more streets with multiple lanes than anyplace else in the state, yet what the city gets from the state is proportionally less because of the formula. That leaves the city to either let the streets deteriorate or shift funding from another need in order to fix the streets. It is a problem that should not exist except for bad public policy.
Developers are creating special TIF taxing districts they would have money to repair the roads and other public infrastructure. Eternity for a 30 plus story high-rise to be built downtown next to City market. If they want to increase Urban density they need to go up
I have to smile at the naivety (or intentionally disingenuous) comments about how taxes are calculated. It is true that they are constitutionally capped at 1% of home value. But government (and educational institutions) are not really staffed with personnel who are laser focused on cost management [compared to private industry, where if you run out of money, you go bankrupt]. It is a simple formula: Assessed value [let’s call that “a”] times the 1% cap [let’s call that “b” equals total tax [call that “c”] So a X b = c.
When government continues to spend and spend, including on non-essential initiatives, they need more “c”. Since “b” is capped at 1%, then you need to increase “a” in order to get the “c” you want. Not really too conceptually complex. Anyone who thought capping “b” at 1% would force government to manage costs clearly did not pay attention in algebra class.
L D. – The problem with your reasoning is that it is a “one size fits all” formula that constrains a local government’s ability to meet the dynamic needs it faces from year to year. Surely you don’t believe that Indianapolis and Westphalia are so similar that that the same tax-and-spend formulas are optimal for each? The Republican controlled state legislature doesn’t care that its rules aren’t fair because they have a Westphalia mindset.
L.D., you’re overlooking the cause of the 1% cap: the State Supreme Court ruled in the early 2000s that “a” (assessed valuation) must be reasonably close to actual market value.
So by law, “a” goes up only when and to the extent that market value goes up. Otherwise there’s an assessment appeal and maybe a class action court case.
—
Matthew C., 1. Marion County isn’t the only place with school referenda that increased property taxes. 2. The mass transit tax is a 0.25% income tax (not a property tax).
Talking about tax caps is all well and good, but when 1 mile of a 2 lane road in Green county gets the same tax dollars as 1 mile of Keystone Avenue, then, maybe the problem isn’t just the property tax cap. If you calculate road funding on lane miles Indianapolis is underfunded by about 3 to 1. If you calculate road funding based on vehicle miles, than Indianapolis is underfunded by about a factor of 8 to 1.
Or to put it another way, Indianapolis is subsidizing rural roads all over the state, even though Marion county makes up 25% of the state’s GDP and the Metro area makes up 50% of the state’s GDP.
There are some significant variances in the metro size and growth rates between those published in this article and what the Census Bureau published.
Are we sure we are losing population???
Indy averaged an annual increase in population of around 7000 to 8000
annually until 2021. Then all of a sudden we lose 5,600 people??
We’ve had a big influx of Hispanics, Africans, and Asians. City and states with
large minority populations are hard to track and almost always under counted.
That’s why the census bureau has stated many cities and states with large
minority populations were very under counted. I think Indianapolis/Marion County
falls into that category.
The 2010 to 2020 populations by metro area are their CSA populations
not their MSA populations.
Indianapolis per capita was the most deadly city in the country last year. Even beat out Chicago. That could have something to do with this..
That’s not even close to true, but go ahead and make up your own facts I guess.
yes it is true and a huge factor. nightly multiple shootings are not helping this city.
St. Louis, MO 88.1
New Orleans, LA 51.0
Detroit, MI 49.7
Memphis, TN 44.4
Cleveland, OH 42.2
Kansas City, MO 35.3
Milwaukee, WI 32.4
Cincinnati, OH 30.2
Chicago, IL 28.6
Washington, DC 27.8
Indianapolis, IN 24.3
Marion County has been mismanaged for 2 decades by poor policies and bad finicial investments into the convention business and sports teams.. Mayors should have been focusing on the bad neighborhoods and crime for the citizens to make there lives better and not the Irsay’s and the Simon’s pocket books.
Maybe it only looks like mismanagement when Indy is just really chronically underfunded because they don’t get their fair share of state tax dollars. When 1 mile of a 2 lane road in Green county gets the same tax dollars as 1 mile of Keystone Avenue, then, maybe the problem isn’t just the property tax cap. If you calculate road funding on lane miles Indianapolis is underfunded by about 3 to 1. If you calculate road funding based on vehicle miles, than Indianapolis is underfunded by about a factor of 8 to 1.
Or to put it another way, Indianapolis is subsidizing rural roads all over the state, even though Marion county makes up 25% of the state’s GDP and the Metro area makes up 50% of the state’s GDP.
People are shifting! But its nothing to worry about because of the city is getting so things situated for the better! And things will bounce back and more!!!!!!
Micah, stop with the exclamation points already. You were doing so well…
The safety issue is huge. Public safety was poor during the riots. Better protection for the law-abiding may help stanch the egress.
Agree. Hogsett soft on crime. We need a much better mayor and more police. Increase police (and teacher!) pay. The result will be positively transformational.
If gasoline continues to be above $5 per gallon, if electric cars and charging stations remain several years away, and if suburban housing prices remain very high, these numbers will change. Transportation & Housing Costs > School Quality & Shootings.
School quality is a huge factor in the equation for parents. Look at the schools in the donut counties. Carmel, Zionsville, HSE, Fishers, Center Grove, Mt. Vernon, Plainfield, Avon. They’re massive. They’re big. They’re shiny. It’s an arms race for each school to keep up with the other.
Throw in the transformational work on the downtowns of many of those areas and little wonder people are heading there.
A generation or two ago you had people live wherever and move to the townships when it was time for kids to go to school. Now they’re moving to the donut counties. And for the people moving from elsewhere in Indiana to Indianapolis, the suburbs give them the ability to have some land/space like they’re used to, while also getting them closer to better jobs. When you were looking at an almost two hour commute from (say) Portland to Indianapolis, 25 minutes a day from Greenfield ain’t that bad.
The Marion County population loss is similar to what happened in cities around America. Even Nashville-Davidson County lost population last year, which seems almost impossible. So this is a national trend, not just a local matter.
There was a significant decline in international migration to Indy, but it doesn’t account for the entire loss. Keep in mind, Marion County was gaining population strongly in the 2010s, so the shift is pretty big, first wiping out gains, then shifting into the loss category.
I would not read too much into just one year’s data. I wouldn’t ignore this by any means, but the forces driving it – which again are national – may shift again.
Every township in Marion County lost population by the way.
I actually think there’s pent up demand for even more outmigration to the suburbs. If you look at the housing market over the past several months, the burbs were much tighter than the city, which has an abundant number of listings. If there were more suburban product, I think even more people would have left Marion County.
The risk to Marion County is less mass abandonment than a hollowing out that leaves it with a population dominated by large, lower income minority populations, along with with a niche affluent white population in the core. The white population of Marion County actually declined a lot in the 2010s despite large total growth. Some of this is an artifact of Census changes, but in Columbus, Ohio the white population of the city grew strongly. Marion County is only 53% white and will soon be a majority-minority county. At the same time, the minority population (including black population) in suburbs like Carmel has gone up a lot (tripled or more since 2000 I believe). Affluent minorities are suburbanizing, possibly even at a faster rate than whites (whose wealthiest cohorts have a sizable number of people with strong urban attachments). And rising housing prices trap lower income resident in Marion County.
Marion County already has far fewer higher income households than any peer county I know of in America. For example, Louisville’s Jefferson County has more households earning over $100,000/year than Marion County does, even though Jefferson County has 200,000 fewer total people. Marion County’s number of higher income households went up significantly in the 2010s, but at a slower rate than peer cities.
Aaron, many good points and interesting data. Taking your data at face value, I would offer Detroit as an prime example of a city that has hollowed out per your description. And the affluent enclaves in that city are often gated and/or hire private security. So those residents, while they like to say they “live in the CITY”, really don’t live IN the city…
Not everyone can afford to move to the burbs, especially those to the north in Boone and Hamilton counties. The difference in the average cost of housing is significant. It would be cheaper to stay put in Indianapolis and pay the cost of private tuition to get your kids a better secular education.
Vouchers change the match, but you throw in the cost of tuition and it changes what house you can look at…
So, even Perry and Franklin townships lost population from 2020 to 2021???
That is very difficult to believe.
Indianapolis is a great city. It has a lot going for it that makes it as good as, if not better than, other similarly sized cities. I like it.
What’s keeping people from coming, and what is driving people away from Indianapolis, is Indiana. I know people who have left, and who are seriously considering leaving because of the politics and quality of life in Indiana. It’s bad enough that the State Legislature seems to have it out for Indy, keeping it from really thriving. Add that to the poor school system, healthcare system, a DOT stuck in 1964, and a political turn to the far right — it is just too much for many.
Let’s face it. Indiana has a bad reputation. When I moved to Indy from out of State, the first question I would get was “Why did you move to Indiana?” And that was from people living here. That says a lot right there.
According to this logic, (Right Wing Majority) nobody would move to Florida. But, they are in droves. Granted the weather helps but the argument was that politics is the motivating factor.
DonALD F. ~ You conveniently neglected to mention Florida doesn’t have a state income tax. That and the lack of snow are big draws for retirees. Of course the chiropractors and ambulance chasing lawyers take advantage of all those geezers, but that’s a topic for another day.
Walter C. I have to agree with this in some part. The Republicans in the statehouse have always been loath to do anything that might help “those people”, and seem to actively thwart any progressive policies for all of the larger cities in the state.
Republicans have been actively gerrymandering districts to pack and slice the voters in urban areas across the state.
With the fascist wing of the Republican party on the rise, denying bodily autonomy to half of the Indiana population seems possible, and I don’t think it will be long before new voting “protections” are put in place to make sure only the desired votes are counted.
Florida’s population is also old. The median age in Florida is 41.6 years, which is quite a shot away from the national median of 38 years.
Spot-on accurate.
As many have noted, who would want to move to Indiana. Hence, Indianapolis will suffer. The Indiana reputation of repression and backwardness and right-wing hypocrisy far outweighs the positive aspects and attractive sections of the city.
Also, some prefer the new areas in adjacent counties.
Many prefer school district that provide sound education.
Many prefer decent infrastructure.
What can be done. Sadly, the state legislature and the super-majority are disinterested in anything but absolute control of thought and culture without respect for diversity in thought, activities, needs, desires.
Perhaps immigration? One doubts this will be met with wild welcome by many.
Columbus Ohio is doing so much better than Indy. Ohio is also GOP but Ohio better recognized the value of investments in infrastructure, education, facilities, and planning.
The focus on the cheapest option forward often does not lead to the better long-term benefit. The legislature is myopic and regressive.
You are absolutely correct. Ohio has outspent Indiana on education by about 10 Billion dollars over the last decade or two. Companies have noticed. Indiana is just trying to buy voters with a tax refund.