Valparaiso begins discussion of housing affordability problem

Chicago Tribune

01-06-2025

Valparaiso began addressing housing affordability with a symposium Thursday, the first step toward finding solutions.
Capital Stacker founder Heather Presley-Cowen, who has helped Fort Wayne and other communities, outlined the housing situation in Valparaiso before guiding a panel discussion and a tabletop scenario exercise for participants.
It's important to create a strategy and not just a study, she said.
Often a study 'becomes the best thing that sits on the shelf from the mayor's office,' Presley-Cowen said. 'A study looks back,' but that's the rearview mirror, not where you're headed. A strategy looks forward, 'and looks in a visionary way at what's possible.'
'The goal is that this leads directly to implementation,' she said.
When Presley-Cowan consults with communities, she often hears real estate agents say, 'We've got a month's work of inventory if we're lucky,' while municipal officials point to vacant lots still available on the edge of town.
But the housing market has changed, she said. Half-acre lots aren't as desirable. 'Today's buyer and renter population, they're not looking for that anymore,' she said.
In the past, blight elimination has involved tearing out housing stock that's no longer functional. 'There is really good infrastructure running right past that house,' she said, so infill development is important.
In Wabash, the 14-acre site of the former Parkview Hospital was donated to the city when a new hospital was built. It was a good location, convenient to downtown and schools.
'Wabash has had no development in many, many years – in generations,' she said. 'It wasn't happening. The private sector wasn't doing it.'
'We densified it because we could get the infrastructure costs down,' Presley-Cowen said. With smaller lots, 44 units were able to bring down the per-unit cost. 'It sets the stage for others to do the same thing,' she said.
The city established a residential tax increment financing district and used state READI dollars for infrastructure work. 'Today we have our first five units that are coming out,' she said.
Unlike Valparaiso, Wabash needed more expensive housing.
Valparaiso's median housing value is $284,700, she said, citing a study by Zimmerman/Volk Associates.
'Every single year, 3,620 households of all incomes are swirling around, looking to live in Valparaiso,' Presley-Cowen said, but many can't find what they're looking for.
'Over the next five years, we need close to 2,000 new units. That's conservative,' she said.
The pace of home construction, however, is nowhere near that rate.
'If we can offer more density, we naturally start creating more affordability,' she said.
The average rental cost in Valparaiso is roughly $1,400 to $2,000. But looking at average median incomes, it should be $800 to $1,500 to be affordable for typical workers making about $13 to $15 an hour, she said.
'We have lots of housing needs, and we have lots of price points to meet,' Presley-Cowen said. 'We need condos starting at $105,000. Do we have anything like that?'
Panelists offered a variety of perspectives on the city's housing situation.
Plan Commission President Matt Evans said MLS data show single-family home values have gone up 191% over five years. Center Township hasn't seen the needed growth in median-income homes. 'We are truly handcuffed through the lack of supply. If we had more homes, I am sure we could sell them,' he said.
Developers are building $350,000 homes because they can make more profit per unit than with homes at lower price points, he said.
Patrick Turner, principal owner and developer with Dynaprop, said when he moved to Valparaiso, it was very affordable. That has changed. He noted a person who listed his home for $25,000 over the real estate agent's recommendation and received multiple offers, selling it within a week for $14,000 over the asking price.
Unlike some areas, Valparaiso doesn't have a lot of infill properties, said CoAction Executive Director Jordan Stanfill.
Complicating the housing affordability issue is that numbers showing how much home a buyer should be able to afford don't factor in debts they might already have. 'Everyone has a couple of car loans, student debt, especially if they're moving into a $350,000-plus home in Valparaiso,' residential real estate agent Zane Galloway said.
United Way of Northwest Indiana Executive Director Chris White noted the agency has been focused in recent years on a demographic referred to as ALICE – asset limited, income constrained, but employed. A single person in Porter County needs to make almost $15 an hour just to get by, he said. For a family of four, it's $80,000.
'If you lose a wheel on your car, that may have set you back for a month, over the next year, to recover from that,' he said.
Through its Level Up program, United Way of Northwest Indiana is working to help raise family incomes, guiding individuals through education and other means to raise their incomes. But there's a long way to go. In Porter County, 36% of residents are below the ALICE threshold, and 10% are below the poverty level.
People are being squeezed out because they can't afford to live here, he said.
Affordability is a simple issue of supply and demand, Presley-Cowen said. The issue is how to increase the supply to meet demand.
Employers should be involved in the conversation because they have a stake in ensuring their workers can live near where they work, she said.
Lenders need to be involved in the discussion, too.
The next step of the process is to engage stakeholders in focus groups to come up with suggestions that might work for Valparaiso.
After that, it will be time to start focusing on solutions that would help spur the construction of less expensive homes.
'There's no single bullet to solve any problem,' said Mayor Jon Costas. For Valparaiso, the solutions include looking at city ordinances to see what might be hindering affordable housing, he said. Among the changes could include encouraging higher density or allowing accessory shelters for secondary dwelling units on a property.
'How can a city of our size spur residential development that private developers have not participated in,' City Councilman Robert Cotton, D-2nd, asked.
More and more communities realize affordable housing 'is a cornerstone of economic vitality,' he said. 'Affordable housing isn't an accessory. I believe it is a necessity.'