This legislative session, as with those in the recent past, has been consumed by debates about how to improve Rhode Island’s economy and unemployment rate. Discussions of pension reform, budget cuts and the state’s role in aiding municipalities with their own budget woes fill daily headlines. With all this, an important sector of the economy has remained relatively sidelined over the last several months – housing.
Housing programs have not been getting the full attention they need from the General Assembly despite housing starts being a key economic indicator and construction of long-term affordable housing having proved itself to be successful in creating jobs and supporting Rhode Island’s economy. Programs that have been essential to this success are the historic- preservation-investment tax credit, Building Homes Rhode Island and the Neighborhood Opportunities Program.
Let’s look first to reinstating Rhode Island’s Historic Preservation Investment Tax Credit. House Speaker Gordon D. Fox showed great vision when he introduced legislation in 2001 to incentivize the redevelopment and reuse of historic properties as a way to “improve property values and foster civic beauty.” The program worked.
The Historic Preservation Tax Credit was a key catalyst in building both market rate and long-term affordable housing (as well as commercial spaces) out of unused, historic structures. Economic analysis of the program also showed that the tax credit created jobs and increased property-tax revenue for local municipalities.
Despite such success, concerns regarding the budgetary cost of the program led to its suspension in 2008. Talks, endorsed by a coalition led by Grow Smart Rhode Island, are now under way to reinstate the program with tighter investment guidelines that address previous years’ concerns. Reinstating the Historic Preservation Investment Tax Credit is key to increasing local tax revenue by bringing abandoned properties back to the market, providing housing and supporting jobs in the construction sector.
An important strategy in the construction and rehabilitation of long-term affordable housing is the state’s Building Homes Rhode Island program. Economic analysis by HousingWorksRI showed that the $50 million bond that funded the program was multiplied nearly 16 times throughout the state’s economy, generating close to $800 million in total economic activity. Construction activity supported by the program accounted for nearly 60 percent of the total estimated cost of residential construction permitted in Rhode Island from 2007 through 2010.