Spurring infill housing development: South Bend, IN
Published on: June 17, 2025
- Issue Areas
- Housing and community development
- Outcomes
- Supportive neighborhoods
MORE ABOUT THE STRATEGY USED IN THIS CASE STUDY Increasing overall housing supply, Addressing vacant or abandoned properties
At-a-Glance
Summary
As deindustrialization and suburbanization accelerated in the 1960s, South Bend faced population decline. Between 1960 and 2010, South Bend’s population shrunk from 132,000 to just over 100,000. With population decline came an oversupply of housing that depressed property values and led to high rates of vacancy and abandonment. In South Bend’s close-in neighborhoods, decades passed with little to no new housing development. Recognizing the need to reverse this trend, local leaders rededicated themselves to stimulating infill housing development.
In 2020, the City of South Bend launched Build South Bend, a strategic initiative focused on making infill development easier. Over time, Build South Bend would come to encompass a range of programs and policies to support developers – with an emphasis on new and small-scale developers, in particular. These supports included technical assistance and mentoring, zoning and parking reforms, pre-approved building plans, and a suite of financial tools.
Keys to the success of Build South Bend include strong buy-in from senior public sector leaders, the “high-touch” approach to supporting small-scale developers, and the responsiveness of the City’s Department of Community Investment to developer feedback and needs.
Obstacles to the success of Build South Bend include rising housing construction costs, limited financial tools to support small-scale infill housing development, the difficulty that new developers face navigating the development process, and concerns about maintaining the affordability and condition of infill housing over time.
Results and Accomplishments
232
Within five years, South Bend expects to see 232 new infill housing units in its inner neighborhoods.
100+
Over 100 new infill housing units are expected to be built using South Bend’s Pre-Approved Building Plans over the next five years.
$15.2M
By 2031, South Bend’s Near Northwest neighborhood is projected to see at least $15.2 million in private investment, largely from small-scale developers.
Creating a cohort of small-scale developers: The City of South Bend’s “Build South Bend” initiative aims to make residential and commercial development easier, especially for small-scale, local developers. Today, there are more than 100 small-scale developers in South Bend – collectively, one the largest developers in the city. This new crop of developers is addressing one of the city’s longest-standing needs: infill development, especially in its most disinvested neighborhoods.
Enabling infill development: Build South Bend resulted in a simpler zoning code, expanded financial assistance, and new coaching and technical assistance opportunities, among other supports for small-scale developers. These changes spurred new infill housing development in South Bend. In the city’s Near Northwest neighborhood alone – an area that hadn’t seen new residential development in decades – small-scale developers have invested more than $15.2 million since 2018. These investments have resulted in 50+ residential infill units, the majority of which are affordable to households at or below the area median income. Across South Bend’s established, inner neighborhoods, the City expects to see at least 232 new infill residential units built by 2030.
Kickstarting a cycle of investment: For decades, developers struggled to secure financing for property purchases or renovations in South Bend’s close-in neighborhoods. With little recent market activity, properties in these areas had few comparisons, making it difficult for developers to convince lenders that their projects would break even. South Bend’s small-scale developers have begun to reverse this trend. Through the success of their own projects, small-scale developers are providing the comparison properties needed to spur additional investment in disinvested neighborhoods.
Driving growth in tax revenue: As new infill development raises property values, the City of South Bend stands to see greater tax revenue over time. A study of Portage Midtown – a neighborhood infill demonstration project – estimates that the project’s 50 residential infill units will increase in value from $66,000 to $4.85 million per acre over a 15-year period. By 2031, these properties alone are estimated to provide approximately $300,000 per year in tax revenue to the city.
Becoming a national model for incremental development: Since launching in 2020, Build South Bend has become a national model for supporting small-scale development. In 2021, the City received the Richard H. Driehaus Form-Based Code Award, recognizing South Bend’s revised zoning code as an exemplar form-based zoning code. The City’s efforts are also regularly featured in local and national publications, like the Indiana Business Journal and Milwaukee Journal Sentinel.
Overview
What was the challenge?
Disinvestment leads to population decline: In the early and mid-twentieth century, South Bend was home to tens of thousands of manufacturing jobs, most prominently at its once mighty Studebaker automotive plant. However, as deindustrialization and suburbanization accelerated in the 1960s, South Bend faced population decline. Between 1960 and 2010, South Bend’s population shrunk by over a quarter, from 132,000 to just over 100,000.
Rising property vacancy and abandonment: When South Bend’s population fell, the size of its housing stock remained relatively constant. The resulting oversupply of housing depressed the area’s property values and led to high rates of vacancy and abandonment. As in other post-industrial cities, South Bend found itself locked into a negative cycle. The cost to build new housing often exceeded what that property would then appraise for – making it nearly impossible to secure financing for housing development. The result? In South Bend’s close-in neighborhoods, decades passed with little to no new development.
Threatening the financial health of local government: The City of South Bend’s revenue largely comes from local property and income taxes. With declining property values and population, the City faced decades of negative pressure on its budget. Over time, these trends threatened the City of South Bend’s ability to continue providing high-quality public services to residents.
Local leaders confront barriers to population growth: Local leaders increasingly recognized that population growth would be key to strengthening South Bend. The city had the space for more people, but it needed to spur housing development, particularly in its close-in neighborhoods. Unfortunately, South Bend had seen little infill housing development for decades. As local leaders rededicated themselves to stimulating new housing development, the many barriers to infill – from restrictions on “missing middle” housing to sewer hookup costs – became clear.
What was the solution?
Launching Build South Bend: In 2020, the City of South Bend launched Build South Bend, a strategic initiative focused on making infill development easier. Over time, Build South Bend would come to encompass a range of programs and policies to support developers – with an emphasis on new and small-scale developers, in particular. These supports included technical assistance and mentoring, zoning and parking reforms, pre-approved building plans, and a suite of financial tools.
Continuing support for technical assistance: In 2017, local leaders and the City of South Bend contracted with Incremental Development Alliance to run a workshop series for community members interested in becoming small-scale developers. When Build South Bend launched, the City renewed its commitment to providing small-scale developers with technical assistance opportunities. Through a partnership with Neighborhood Evolution, the City now offers regular workshops, networking events, and coaching sessions to small-scale developers. These offerings aim to increase access to foundational knowledge about the development process and to build a sense of community among residents working on infill developments.
Removing regulatory barriers to infill housing: When developers proposed infill housing similar to South Bend’s existing housing stock, they found that it was largely illegal to build. The city’s zoning code – adopted after most of South Bend’s housing was built – largely prohibited the traditional small to middle-scale housing that was so common throughout the city. To fix this problem, the City adopted a new form-based zoning code in 2020. The new code legalized “missing middle” housing (e.g., duplexes), among other reforms to enable developers to build contextually-appropriate infill housing. In 2021, the City further adjusted its zoning code to support infill development, most notably by removing parking minimum requirements.
Providing pre-approved building plans: Over time, the City recognized that many new developers were proposing suburban-style housing that was not contextually appropriate – and often not compliant with zoning regulations – in South Bend’s urban neighborhoods. In response, the City developed a set of free-to-use, pre-approved building plans in 2022. The pre-approved plans adhere to local zoning requirements and reflect South Bend’s typical lot configurations, architectural styles, and market conditions. Developers who use the pre-approved plans receive contingent building and site development approval while saving the time and money that they otherwise would spend during a design process.
Offering financial tools to developers: In some cases, regulatory and process reforms are not enough. In neighborhoods with low property values or few recent sales, developers can struggle to secure private financing. To address this, the City of South Bend has built out a range of financial tools for developers working on residential, mixed-use, and commercial projects. For residential infill, the City has long offered tax abatements, which temporarily exempt a property from a portion of the new taxes that would typically result after a rehabilitation or construction project. In 2024, the City also launched the Housing Capital Enhancement Program, a pilot program to provide gap financing to support rehabilitation projects that create affordable housing.
Who were the key stakeholders?
Planning and Community Resources Team: The Planning and Community Resources Team, within South Bend’s Department of Community Investment, led the design and implementation of key aspects of the Build South Bend initiative, including zoning reform and the pre-approved building plan project.
Growth and Opportunity Team: The Growth and Opportunity Team, also within the Department of Community Investment, manages financial incentives and coordinates technical assistance and networking opportunities for developers.
External development consultants: The City of South Bend contracted with Incremental Development Alliance and later Neighborhood Evolution to provide workshops and coaching opportunities to small-scale developers.
Elected leaders: Former Mayor Pete Buttigieg and his successor, Mayor James Mueller, have continually made infill development a priority for the City of South Bend. The city’s Common Council have also been key supporters, particularly in approving legislative actions, like reforms to the zoning code.
Local financial institutions and lenders: Banks, credit unions, and other lenders provide financing for small-scale development projects throughout the city. For example, CDFI Friendly is a key source of financing for affordable housing projects and partnered with the City to launch the Housing Capital Enhancement Program pilot.
Small-scale developers: South Bend’s small-scale developers manage infill development projects, but are also key leaders in sustaining the city’s broader ecosystem supporting small-scale development. For example, developers continue to hold “Town Makers” meetings to facilitate information sharing and networking.
Community development corporations: South Bend’s community development corporations (CDCs) were early leaders in spurring redevelopment in the city. The CDCs continue to work alongside small-scale developers to advance infill projects.
What factors drove success?
Leaders prioritize small-scale infill development: Senior public sector leaders – namely South Bend’s recent Mayors and Executive Directors of Community Investment – have made small-scale infill development a priority. This commitment from senior leaders created a sense of momentum and accountability to drive greater development in the city’s neighborhoods. The continuity of this commitment across the mayoralities of Pete Buttigieg (2012-2020) and James Mueller (2020 to present) has also given developers and city staff the time needed to build out and iterate on its ecosystem of supports for small-scale and infill development.
Providing high-touch support to developers early and often: Infill development projects are complicated, and problems missed early on can compound as a project advances. The City’s Department of Community Investment proactively reaches out to developers early in the development process and remains accessible to them until their project is complete. By providing high-touch support, city staff help developers – and new and small-scale developers, in particular – learn the process and navigate challenges.
Responding nimbly to emerging challenges: The Department of Community Investment works closely with the city’s development community. This proximity has allowed city staff to quickly identify emerging challenges facing local developers. As a result, several Build South Bend initiatives – including the City’s pre-approved building plans and its Housing Capital Enhancement Program – originated as responses to concerns raised by the development community.
What were the major obstacles?
Rising labor and material costs: As in other parts of the country, construction costs are rising in South Bend. High construction costs put downward pressure on infill development – and affordable infill housing in particular. Ultimately, rising labor and material costs are structural issues largely beyond the control of local government. However, the City of South Bend is taking steps to reduce construction costs where it can, including by exploring ways to encourage modular housing construction.
Limited financial supports for small-scale housing projects: Historically, most of the development incentives offered by the City of South Bend to support infill development targeted commercial, mixed-use, or large-scale residential projects. Developers focused on small-scale infill projects in South Bend’s residential neighborhoods often had the same need for financing or grant-based support, but fewer tools available to them. While this gap remains, the City of South Bend has expanded its support to small-scale developers. Most notably, in 2024, the City launched its Housing Capital Enhancement Program to provide gap financing to rehabilitation and conversion projects that create affordable housing.
Complexity proves challenging for new developers: South Bend has built a strong cohort of small-scale developers, many of whom began with little background in development. This success is largely attributable to the City’s work simplifying internal processes and providing training and high-touch technical assistance to developers. Nonetheless, the development process remains difficult to navigate, particularly for new or lower-capacity developers.
Maintaining affordability over time: Small-scale developers in South Bend develop a disproportionate share of housing affordable to low- and middle-income households. However, as redevelopment leads to rising housing values, the risk that existing residents will be displaced grows. While mission-oriented developers and property owners may choose to maintain affordable offerings, local leaders recognize the need for additional steps to preserve affordability over the long-run.
Timeline
Community leaders and the City of South Bend partner with the Incremental Development Alliance to offer the city’s first workshop series on small-scale, incremental development.
The City of South Bend adopts a new form-based zoning code, legalizing “missing middle” housing (e.g., duplexes), among other reforms to support the development of infill housing.
The City of South Bend launches Build South Bend, a strategic initiative focused on making infill development easier.
As a follow-up to its previous zoning reforms, the City of South Bend removes minimum parking requirements city-wide.
The City of South Bend publishes its Pre-Approved Building Plan Sets, allowing developers free access to contextually-appropriate small to middle scale housing plans.
Recognizing sewer connection fees as a barrier to small-scale infill housing development, the City of South Bend launches a program to reimburse up to $20,000 in sewer connection costs for select projects.
The City of South Bend launches the Housing Capital Enhancement Program, a pilot program providing gap financing to rehabilitation and conversion projects that create affordable housing.
Implementation process
What were the key components of the program’s design?
Attending to the needs of small-scale developers: Traditional developers were never coming to save South Bend’s disinvested neighborhoods. Their soft real estate markets aside, these neighborhoods were built out, without the land necessary for the large-scale projects typically favored by traditional developers. While large developers have benefited from Build South Bend, the initiative paid special attention to the needs of their smaller-scale peers. Aspects of the initiative, like workshops and coaching sessions, are squarely targeted at smaller operators. This approach was intentional. For South Bend to generate more of the small to mid-size housing that makes up most of its urban fabric, it would have to rely on small-scale developers, who typically initiate these types of projects.
Encouraging local ownership: Small-scale developers are typically local developers. Build South Bend’s focus on small-scale development therefore serves to promote local ownership of new infill properties. This benefits the community, in that local developers – who themselves often live in the areas in which they work – may be more responsive to community needs than large, outside ones. The approach also keeps more money circulating locally. With larger, outside developers, the revenue generated by development in South Bend may ultimately be reinvested in another community. With local developers, the likelihood of that same money recirculating locally grows.
How were key stakeholders engaged?
Holding regular informational and networking events: Through its partnership with Neighborhood Evolution, the City of South Bend holds regular workshops and networking events for prospective and current developers. City staff advertise these offerings widely – often through community-based organizations – to attract a wide-range of residents interested in small-scale development. More than just technical assistance opportunities, these events are critical touchpoints for city staff to understand and help troubleshoot challenges facing small-scale developers.
Proactively engaging small-scale developers: The City of South Bend’s Department of Community Investment aims to reach out to small-scale developers early in the development process. During this outreach, city staff work to proactively address any challenges that a proposed project would otherwise encounter later in its development. This high-touch approach is made possible, in part, by the Department dedicating a portion of a staff member’s time to serve as a point-of-contact for small-scale developers.
Collaboratively developing neighborhood plans: The City of South Bend has recently undergone neighborhood planning efforts to sketch out the community's intentions for the future of the city. These plans have been developed collaboratively with residents and other community stakeholders. While not solely focused on small-scale development, these processes have represented an opportunity for small-scale developers to sync with city staff and leaders on future plans for housing and commercial development.
How does the initiative create greater opportunity for community members?
Making property development more accessible: Property development is complex and resource-intensive, limiting the number of people who can enter the field. While barriers remain, South Bend’s commitment to simplifying processes and providing technical and financial assistance has made it easier for new and lower-capacity developers to launch successful development projects. As a result, more than a hundred small-scale developers – many of whom are from groups underrepresented in property development – have begun projects in South Bend in recent years.
Promoting local ownership of properties: Build South Bend has made infill development more feasible in South Bend. The initiative has primarily benefited small-scale, local developers, who complete most of the city’s smaller infill projects. As a result, Build South Bend is strengthening local ownership of residential properties at a time when national investment firms are increasingly buying up housing across the country. Over time, the initiative may prove to be an effective wealth building strategy, as South Bend’s cohort of new developers build equity in their properties.
Reinvesting in disinvested neighborhoods: In many of South Bend’s close-in neighborhoods, little development had occurred for decades. Small-scale developers have helped to fill that void, steadily rehabilitating existing and building new properties in these areas. In neighborhoods like South Bend’s Near Northwest – an area that saw the city’s first small-scale, incremental development projects – the benefits to the broader community are clear: high-quality, affordable housing; new public spaces and amenities; and increasing property values.
What were the key activities leading up to and following launch?
Community leadership plants the seeds for development: Local leaders in South Bend had long understood the need for infill development to revitalize the city’s neighborhoods. Community development corporations and other nonprofits were early leaders in redevelopment efforts, joined by a small number of small-scale developers focused on rehabilitating properties in their neighborhoods. In the end, a community leader partnered with the City to bring the Incremental Development Alliance to South Bend for the community’s first workshop on small-scale, incremental development.
Building infrastructure to train and connect small-scale developers: Since that initial workshop in 2017, the City of South Bend and its community partners have expanded the technical assistance and networking opportunities available to small-scale developers. The regular programming provides an on-ramp for prospective developers to enter the profession and an opportunity for experienced developers to up-skill and access peer-support. Over time, the programming has facilitated a collaborative and supportive culture amongst the city’s small-scale developers.
Launching an iterative effort to lower barriers to development: As South Bend grew its bench of small-scale developers, it simultaneously began lowering the regulatory and financial barriers to constructing infill development. In 2020, the City of South Bend passed a new form-based zoning code, which legalized small multifamily housing, among other reforms. The following year, Build South Bend formally launched. The initiative has since grown to include a range of programmatic and policy changes, many of which were developed in response to challenges experienced by the city’s small-scale developers.
How was this approach funded?
Leaning into regulatory changes: Build South Bend’s regulatory reforms were largely developed and implemented as part of the regular responsibilities of the City’s planning and community development staff. These reforms have no ongoing costs associated with them.
Funding the workshop and networking series: Initially, community members and the City of South Bend split the cost of hiring Incremental Development Alliance to offer a workshop series on small-scale, incremental development. As the effort matured, the City assumed responsibility for the cost of providing technical assistance to small-scale developers through its partnership with Neighborhood Evolution.
How has the approach been measured and refined?
Formally collecting feedback from developers: The Department of Community Investment regularly surveys developers working in the community. These surveys help the City understand which aspects of Build South Bend are most helpful to developers and where additional supports may be needed to advance future infill projects. For example, when survey results showed that developers found networking events and one-on-one coaching opportunities particularly useful, the Department recommitted to offering these supports in the future.
Taking an iterative approach: For decades, little to no development occurred in South Bend’s most disinvested neighborhoods. As a result, when local leaders committed to spurring infill development, few inside or outside city government fully understood the barriers that would arise to these projects. Recognizing this, the Department of Community Investment adopted a “high touch” approach to engaging local developers that has given city staff greater insight into the realities of the development process. Many aspects of Build South Bend – from the pre-approved building plan sets to the City’s reimbursement program for sewer hookups – resulted from the Department’s close working relationships with area developers.