Affordable Housing in Kokomo, Indiana, Helps a Town Hit Hard by the Great Recession
The city of Kokomo, Indiana, faces ongoing economic challenges in the wake of the 2008 financial crisis, including lower real household income, a rapidly deteriorating housing stock, and increased numbers of rent-burdened households. Since opening in 2016, Apperson Way Apartments, located in downtown Kokomo, has increased the city’s supply of quality, affordable housing while contributing to a place-based strategy of economic development and revitalizing a centrally located Kokomo neighborhood.
In the years leading up to the Great Recession, manufacturing jobs in the automotive industry were a significant source of employment in Kokomo. Manufacturing supported mid-skill, moderate-paying jobs alongside higher-paying employment in computers, engineering, and the sciences. Declines in the local manufacturing sector devastated earnings, reducing the city’s real median household income (as expressed in 2014 dollars) from $51,522 annually in 2000 to $35,690 annually in 2014. As a result, the city’s poverty rate increased during the same period, rising from 13 percent to 21.1 percent. The number of cost-burdened households — those paying at least 30 percent of their income toward housing costs — also rose, going from 33 percent in 2000 to 62.1 percent in 2014. The recent return to prerecession levels of unemployment has not been accompanied by a return to prerecession wages. This dynamic has also affected the income of landlords, who, in response, have neglected maintenance of their rental properties, decreasing their overall quality. In Kokomo, Apperson Way Apartments addresses a shortage of affordable, quality housing that was caused less by rising costs than by falling incomes and depreciation of the housing stock.
Apperson Way’s two buildings house 69 rental units, including 28 one-bedroom, 24 two-bedroom, and 17 three-bedroom units. Five of the units are townhomes, which occupy a single two-story building, and the remaining 64 units are in a three-story structure. By including a high proportion of multiroom units, the development helps meet the housing needs of families. Apperson Way serves residents earning a broad range of incomes. Household incomes for residents in 20 units are capped at 60 percent of the area median income (AMI), an additional 20 units are limited to residents earning 50 percent of AMI, 16 units are reserved for those earning up to 40 percent of AMI, and 13 units are reserved for households earning no more than 30 percent of AMI. Energy-efficient appliances, lighting, and flooring, along with the use of solar panels, help reduce residents’ utility costs. Communal amenities include outdoor grills, a gazebo, a playground, and a vegetable garden. Two indoor game rooms, one for younger children and one for older children, provide additional recreational space. Apperson Way also includes a community room, a community kitchen, and a computer lab equipped with three new computers for residents’ use.
Two Indianapolis-based developers, Partners in Housing and TWG Development, partnered to make Apperson Way a reality. Development costs totaled $10.7 million and were funded through the sale of low-income housing tax credits, which generated $9.9 million in equity; a $750,000 Affordable Housing Program grant; a deferred developer fee of $9,000; and $44,000 in energy tax credits. In addition, the city of Kokomo contributed to the project by funding the demolition of existing structures.
The partnership between the city and the development team goes deeper. According to Kait Schutz, director of real estate development at Partners in Housing, Kokomo’s mayor took the initiative to approach the developers, proposing what would eventually become Apperson Way. Continued advocacy on the part of the mayor’s office helped ease local concerns about affordable housing, which included a myth that Apperson Way would not be available to local residents but rather would be filled with new tenants brought in from Chicago. Finally, although this project does not include any project-based rental assistance, the Kokomo Housing Authority worked to connect housing choice voucher holders to Apperson Way Apartments.
From the city’s perspective, Apperson Way complemented other development objectives intended to revitalize the downtown area. For example, a community development block grant helped improve sidewalks and streets in the neighborhood, a blight elimination program preserved a historic downtown building for future redevelopment, and the Kokomo Exterior Home Improvement Program enhances the area’s visual appeal. Additional social objectives are being met thanks to the expertise of Partners in Housing. Apperson Way is this developer’s first project outside of Indianapolis, where the organization gained expertise in using affordable housing developments as vehicles to connect residents to needed social services. Although Apperson Way does not have its own dedicated service program, Partners in Housing sought a property manager experienced in connecting people to outside local service organizations. Apperson Way’s community room provides an onsite venue for providers to meet residents on an ad hoc basis. In some cases, neighborhood churches organize presentations from these local providers that are attended primarily by Apperson Way residents but are open to the broader Kokomo community. As of 2018, Apperson Way is fully leased. This experience, says Schutz, has made Partners in Housing eager to develop another project in Kokomo.
City of Kokomo, Indiana. 2017. “2017 Kokomo Comprehensive Plan.” Accessed 29 August 2018; White House, Office of the Press Secretary. 2010. “Background on the President’s Trip to Kokomo, Indiana Tomorrow,” press release, 22 November. Accessed 7 August 2018; Interview with Kait Schutz, director of real estate development at Partners in Housing, 16 August 2018; TWG Development, LLC. 2015. “Apperson Way Apartments.” Accessed 4 September 2018.×
City of Kokomo, Indiana. 2017. “2017 Kokomo Comprehensive Plan.” Accessed 29 August 2018; White House, Office of the Press Secretary. 2010. “Background on the President’s Trip to Kokomo, Indiana Tomorrow,” press release, 22 November. Accessed 7 August 2018; Interview with Kait Schutz, director of real estate development at Partners in Housing, 16 August 2018.×
Interview with Kait Schutz, director of real estate development at Partners in Housing, 16 August 2018; Partners in Housing. n.d. “Apperson Way.” Accessed 2 August 2018; TWG Development, LLC. 2015. "Apperson Way Apartments." Accessed 2 August 2018.×
Interview with Kait Schutz, director of real estate development at Partners in Housing, 16 August 2018; Partners in Housing. n.d. “Apperson Way.” Accessed 2 August 2018; TWG Development, LLC. 2015. “Apperson Way Apartments.” Accessed 2 August 2018; Indiana Housing and Community Development Authority. 2015. “Special IHCDA Info – 2015 RHTC Reservations.” Accessed 2 August 2018.×
Interview with Kait Schutz, 16 August 2018.×
Interview with Kait Schutz, 16 August 2018; City of Kokomo, Indiana. 2017. “2017 Annual Action Plan: Community Development Block Grant.” Accessed 29 August 2018.×