Task force recommends crackdown on bad landlords, more funding to ease housing woes

An interim study committee examining solutions to Indiana’s housing crisis on Thursday approved a lengthy list of recommendations for future legislation—including state funding for housing-related infrastructure and a vague pledge to hold accountable negligent landlords peddling “substandard” housing.

There are 16 early-stage ideas on the draft list. But despite their broad strokes and wide range, all have the same goal: boost housing in Indiana, said Housing Task Force Co-Chair Rep. Doug Miller, R-Elkhart.

“This in no way, shape or form has to be the absolute definitive. We had to take a 10,000-foot view and decide, of all the issues that were presented [at] the task force, what can move the needle?” Miller asked.

State could step in

Chief among those solutions—and the most likely piece of legislation to hit the Statehouse come January, according to Miller—is state infrastructure financing, through a revolving loan fund or grants. Representatives for builders, buyers and municipal governments repeatedly emphasized the financial strain posed by water-sewer connections and other necessary infrastructure in previous meetings.

Rep. Cherrish Pryor, D-Indianapolis, said the loans and grants should be targeted to the Hoosiers that most need the help, while Indiana Builders Association President Paul Schwinghammer said the infrastructure support was needed across the state for a “broad spectrum” of income ranges.

The tax force also recommended raising a 1% construction cap on residential tax increment financing districts, with some set of financial guardrails. Representatives for local governments and builders previously said the cap prevented the construction of some housing projects, especially larger ones.

Sen. Fady Qaddoura, D-Indianapolis, successfully argued the cap should be bumped up instead of removed and that legislation should include some financial management restrictions. He also suggested sunset clauses for projects with bonds that don’t require the default 25-year TIF lifespan currently in state law.

Another list item, tax sale reform to prevent out-of-state investors from snapping up and mismanaging cheap properties, garnered wide support among task force members—with some caveats.

Pryor said she wanted to ensure nonprofits that might accumulate the properties have the resources to follow through on rehabilitation. Habitat for Humanity Indiana State Director Gina Leckron said her nonprofit would welcome a property cap or capacity assessments.

Task force members also sparred over local zoning, permitting and inspection recommendations.

What about renters?

Missing from an original 15-item list was consideration for renters — especially those living in poorly kept units—Qaddoura said. He referenced an infamous New Jersey-based not-for-profit landlord facing utility shutoffs, lawsuits and ownership changes over its affordable housing in Indianapolis.

Indiana Attorney General Todd Rokita, a Republican, tried his own hand at a lawsuit in 2021 but was rebuffed by the Marion County Superior Court. Rokita has asked lawmakers to expand his authority to pursue litigation against nonprofit landlords, for which Qaddoura advocated.

“These buildings that we’re currently having problems with, they were brand new at one point,” Qaddoura said. “So the problem is that we’re shooting ourselves in the foot if we are just allowing new developments to go in, incentivizing that, and then 10 years down the road, tenants live in horrible conditions. [Then] we say we have a shortage of supply of affordable units. I see the connection.”

Task force Co-Chair Sen. Linda Rogers, R-Granger, was initially reluctant. She said the task force was intended to streamline new construction rather than existing rental units, and that the topic hadn’t been discussed enough in committee.

Miller later clarified to the Capital Chronicle that the group’s mandate included “all of the above” housing options, while other committee members acknowledged during the meeting that bad landlords had previously been a topic of conversation.

“Every responsible corporate landlord should get the support of the state of Indiana,” Qaddoura said in impassioned remarks. “I don’t understand the hesitation of going after negligent, irresponsible people who violate our laws.”

The task force agreed to adopt broad language, “Address substandard housing,” as its 16th recommendation.

But Miller also said it would likely take the most time to develop into legislation.

“I think we’ve really got to work hard to pull the private sector partners in on the conversation and ask hard questions like, ‘What’s preventing you from addressing these issues?’ ‘Is there anything that the government can do to help those those issues don’t exist?’” Miller said.

Another more complicated recommendation, he said, was one on financial literacy for prospective homebuyers and homeowners.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.