Affordable housing crucial to work force growth

Barbara J. Silvis and Nellie M. Gorbea

10/03/2009

In 2006, Rhode Island voters – an overwhelming majority in every city and town – approved a $50 million bond to create affordable rental and ownership homes throughout the state. Very soon after the election, the Housing Resources Commission (HRC) created “Building Homes Rhode Island” to distribute bond funds in collaboration with Rhode Island Housing. The results are impressive.
In its first two years, Building Homes Rhode Island (BHRI) has helped create 560 affordable homes in 22 communities throughout the state. Of these homes, 425 are apartments and 135 are home-ownership opportunities. The $25 million distributed in the first two years of the program is helping to leverage over $230 million from federal and private sources in 40 developments. That is an initial return of $9 for every Building Homes dollar invested.
These dollars are directly invested in the state’s economy and its communities, generating an even higher multiplier impact. For each of these developments, builders buy materials and hire members of the local work force. For example, the North Glen Townhouses development in Westerly, which is using $375,000 in bond funds to leverage an additional $2.7 million, has created almost 30 jobs. Another example, the Sweetbriar development in Barrington, which received $2.5 million in bond funding is projected to leverage an additional $12.9 million and create more than 60 jobs. These jobs are being created at a time when our homebuilding industry is seeing some of its worst job losses.
The economic impact is not limited to the homebuilding sector either. New homeowners and renters shop at local grocery stores, eat at local restaurants and pay taxes to the local government. An abundant and varied supply of affordable, work force homes helps people locate to communities where they work and where they choose to live. With such success, it is clear that, despite the economic downturn, now is precisely the time that the state needs to invest in programs such as Building Homes. Remember, Rhode Island entered the current economic crisis with an undersupply of affordable homes. From 1999 to 2005, the median sales price in Rhode Island went up by 225 percent. So, while foreclosures and distressed property sales have led to a decrease in median home prices, most homes are still unaffordable for many of our working families. In 2008, if we look at prices without factoring the sales of distressed or foreclosed properties, we find that the median sales price of a home in Rhode Island decreased only 8 percent, while the average income stayed level. Even when we include the sales of distressed properties in the calculation, the statewide median sales price in 2008 is still 186 percent more than in 1999. Simply put, the run-up in prices over the last decade was too steep at a time when household incomes stayed relatively flat.
The demand for affordable, work force housing continues to be strong, and is further proof of the success and continued need for programs such as Building Homes. While most of the BHRI homes are still under construction, 99 percent of those that have been completed are occupied. These are apartments and homes that allow our office workers, nurses, teachers, police officers, young people and our elders to stay in our neighborhoods. Healthy, sustainable communities are only possible when people from different walks of life – the very people who enrich our communities and power our local economies – are able to find a variety of housing options.
Thanks to the Building Homes Rhode Island program, community after community is now discovering that affordable homes are not only affordable, but also well-designed, built to last and physically attractive. Just ask your neighbors in Tiverton, Barrington, North Smithfield, Hopkinton, New Shoreham, Burrillville and the other 16 communities that are finally seeing quality, affordable apartments and single-family homes being created on their streets. These homes are transformative – for the neighborhood and for the people who live there. Two weeks ago, the HRC approved the third-year distribution of Building Homes Rhode Island funds. $12.5 million was awarded to help finance 261 homes, 218 of which are apartments and 43 are homes for ownership. This third year of distribution means that the program’s running total is now up to 821 homes in 24 communities. That’s another $12.5 million that will be leveraging federal and private funds, helping put foreclosed properties in the hands of our work force and creating greener, affordable homes.
Rhode Island needs to continue investing in affordable homes because it is an economic development strategy that works. Affordable homes being financed with the help of the Building Homes Rhode Island program are supporting the growth of our state’s work force, businesses and tax revenues.
So, if you voted for the housing bond question in 2006 as the majority of Rhode Island voters did, be assured that your investment is working. At HousingWorks RI we will continue to report back to you on the progress. After all, we all need to hear the good news too! &#8226

HousingWorks RI is a coalition of businesses, nonprofits, chambers of commerce, banks, builders, faith-based organizations and other groups. Barbara J. Silvis is chairwoman of the Board of HousingWorks RI and is vice president and manager of Loss Prevention Web Resources at FM Global; Nellie M. Gorbea is executive director of HousingWorks RI.

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