Fishers' attack on investor-owned homes will lock out families
We accept the principles of a free-market economy almost everywhere — except when it comes to housing.
We stop apartment developments because they're too dense, or don't have enough parking spaces, or invite low-income residents or might block the sun. We ban granny flats. We oppose single-family homes in under-populated neighborhoods to save trees. We oppose single-family homes in urban neighborhoods because of the especially perverse fear that they'll invite more housing development.
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Now, Fishers is trying to block investors from owning too many single-family homes. As IndyStar's John Tuohy reports, the Fishers City Council is considering a 10% cap on single-family rental homes in subdivisions as a way to prevent the ongoing shift from owner- to renter-occupied homes.
Fishers counts 50 subdivisions in which more than 10% of homes are rentals. The city sees this trend as troubling and wants to reverse it. The proposal is gaining support because homeowners prefer living next to other homeowners and institutional landlords have been vilified as predators in recent years (that is true in some cases, but the answer is to enforce penalties against bad landlords; not to ban renting as a form of housing).
Here's the thing: The homeowner-to-renter shift is happening because we keep choking the supply of all other forms of housing. Families are running out of places to live. If Fishers gets its way, and more cities and states follow suit, it's going to worsen a crisis in which housing is already at record-low affordability.
Tightening credit standards have left fewer people able to qualify for mortgages. Among the people who do, they've been priced out of the market because of rising prices. The median home price in Indianapolis in January was $240,000, up 7.4% from the year before, per Redfin. For those who can afford home prices, even more are priced out by the 6.76% average 30-year mortgage rate, which has remained more than double the rate homebuyers became accustomed to in recent years.
It is exceptionally hard for the average person to buy a house right now. As a result, the U.S. renter population is growing at three times the rate of the homeowner population, per Redfin.
If Fishers passes its 10% cap on rental homes in subdivisions, it won't be solving a problem. It will be taking away the last possible solution for families who need a place to live and have run out of alternative options.
Fishers, to be fair, has enabled apartment construction in recent years. But even that isn't enough to satisfy housing demand or to accommodate growing families who need more square footage than the average apartment provides. Families want to live in single-family homes. If they can't buy, and they can't rent, then what are they supposed to do?
The Fishers 10% rental cap would do two things: eliminate potentially affordable homes and suppress the demand for construction of new homes, leading to reduced housing inventory, because this policy restricts the market for people who can live in them.
Existing homeowners might say, "Yep, sounds great to us." That's the heart of NIMBYism — getting into your own home and locking the gates behind you. But those homeowners should consider that they're going to have to sell some day. When they do, the de facto investor ban will have reduced the pool of prospective buyers.
You can see the strain on homebuyers in one number: 56. That's the average homebuyer age last year, up from 49 in 2023, according to the National Association of Realtors. Homebuying is increasingly limited to older people with high credit scores and lots of cash on hand.
Younger people and families with children need to live somewhere. Fishers' proposed 10% rental cap is telling them: not in our backyard.
Contact James Briggs at 317-444-4732 or james.briggs@indystar.com. Follow him on X and Threads at @JamesEBriggs.
This article originally appeared on Indianapolis Star: Fishers' 10% rental home cap on subdivisions is anti-family | Opinion
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