Prosperity Indiana 2026 Session Wrap-Up: Short session takes ‘two steps back’ on housing and economic opportunity for Hoosiers

Legislature must make needed investments in 2027 budget session 

Ahead of the 2026 session of the Indiana General Assembly, Prosperity Indiana sounded the alarm that Indiana has become an unaffordable state, not only for Hoosier households whose incomes have not kept up with rising housing and other basic costs, but also for the community organizations who serve them. Our 2026 Policy Agenda offered solutions to increase affordability for Hoosier households as well as to strengthen the capacity of the organizations who provide housing and economic opportunity for all Hoosiers. 

Unfortunately, throughout the 2026 session, the Indiana General Assembly took too few steps to strengthen Indiana’s communities by making housing more affordable and expanding economic opportunity for low- and moderate-income Hoosiers.  

PI member priority legislation largely did not advance 

The General Assembly largely failed to advance legislation resulting directly from PI member priorities, including SB 205 Development of affordable housing (Sen. Shelli Yoder), which would have lowered zoning barriers for the development of housing affordable at or below 80% area median income on properties owned by religious organizations, although a similar concept was recommended for interim study through HB 1001 Housing matters (Rep. Doug Miller). SB 181 Notice of eviction (Sen. Liz Brown) was a careful measure to close a loophole and strengthen Indiana’s eviction notice laws, but did not get a committee hearing. SB 104 Landlord nexus (Sen. Fady Qaddoura) tackled the problem of unaccountable out-of-state investors by requiring large landlords to have a meaningful in-state presence, but similarly did not get a hearing. And HB 1411 Tax sale procedures (Rep. Karen Engleman) would have helped the state’s land banks preserve and redevelop blighted properties by reducing the time it takes to acquire them. But despite approval from influential appropriators, the language did not make it into legislation that passed the finish line. 

Instead of these opportunities to meaningfully strengthen community economic development this session, too often the legislature ‘took one step forward’ by relying on indirect or delayed benefits at best, and in some cases, ‘took two steps back’ with legislation that threatens the most vulnerable Hoosiers, particularly SB 285 and SB 1.  

Here are several key pieces across Prosperity Indiana’s issue areas that passed this session: 

Affordable Housing and Community Development 

HB 1001 Housing matters (Rep. Doug Miller), the House Majority’s top priority legislation, had the stated goal to “expand Indiana’s housing supply and drive down costs of home ownership" by “rolling back costly regulations that impede development”, ultimately through providing local governments with the ability to opt-out of preemptions on housing development regulations. However, even though Indiana’s largest housing gaps exist among low-income Hoosiers and communities, the final version of the bill included few targeted remedies or resources. 

Prosperity Indiana Executive Director Aspen Clemons appeared on Indiana Lawmakers alongside the bill author and Fishers Mayor Scott Fadness to discuss how the bill could potentially address Indiana’s housing needs. Aspen also testified that the bill was a "necessary first step in addressing Indiana’s growing housing crisis" and called on the General Assembly to follow through on the bill’s call for a task force on PI priority ‘Yes In God’s Back Yard’ affordable housing development. PI also supported HB 1001’s creation of a new definition for Accessory Dwelling Units and makes them a permitted use in many residential areas unless local governments opt out before the end of 2026.  

SB 285 Housing matters (Sen. Cyndi Carrasco) was the fifth bill over the past three sessions to include wrongheaded legislative language directly from the Cicero Institute that would require local law enforcement to fine, ticket, and jail homeless Hoosiers for sleeping outside whether housing and services are available or not. Perhaps because Indiana’s community economic development stakeholders were not included in the development of the legislation, SB 285 also ended up with confusing language that will require law enforcement to determine whether individuals meet a new definition of ‘gravely disabled’ mental illness, and if not, are required to proceed with a new Class C misdemeanor pathway. And while a late amendment provides individuals with a defense in court against the misdemeanor charge if no services exist, that will only come after arrest and being held in jail. PI estimated that if Indiana follows the example of Kentucky, which passed a similar law in 2024, 14,000 bed nights in jails throughout Indiana will annually be required to be filled with homeless Hoosiers instead of true threats to public safety. The bill also included no new housing, services, or resources to address homelessness. 

Unfortunately, unlike in previous sessions when the legislature rejected this dangerous legislation four times, this year the legislation narrowly passed the threshold of Constitutional majority in the House and the Senate before heading to Governor Braun’s signature. 

Asset-Building and Consumer Protections 

In a positive outcome, HB 1116 Virtual currency kiosks (Rep. Wendy McNamara), which would bar these ATM-like machines that have become the vehicle for rampant fraud, passed with strong bipartisan majorities. However, bills to mitigate the worst harms of medical debt had mixed outcomes. The bills that would have provided the most robust protections for patients died after passing through one chamber or did not receive hearings at all. HB 1271 Payment of health claims (Rep. Julie McGuire) did ultimately pass and will require hospitals to disclose information about payment assistance programs and make reasonable efforts to inform patients about those plans before pursuing collections. Much work remains to be done. 

SB 1 Human services matters (Sen. Chris Garten) however, which will create new barriers and obstacles to stabilizing benefits like SNAP and Medicaid, headed to the Governor’s desk for signature. This will make it more difficult and costly for Indiana’s most financially vulnerable households to remain fed and access healthcare. 

Investments in housing and economic opportunity needed in next budget session 

With so many missed opportunities this session to increase housing affordability and strengthen economic opportunities for Hoosiers and the community organizations who serve them, there is an even more urgent need for Indiana’s policymakers to be laser-focused on shaping policies and investments in the 2027 state budget session to address those issues. With the 2026 session as a lesson, lawmakers must resolve to include Hoosiers and community stakeholders in the process of creating legislation, or else risk additional laws that increase inefficiencies, waste resources, and harm the very Hoosiers they represent. Indiana’s non-profits and community economic development sector must also proactively reach out to build relationships and educate lawmakers about the housing and economic needs they experience, and then hold lawmakers accountable for implementing solutions.