Citing a widening gap between the average income and the average rent in Rhode Island, lawmakers have introduced legislation aimed at creating more affordable rental housing for Rhode Island working families, providing homeless persons with supportive housing and revitalizing neighborhoods through local grants.
The $50 million program, dubbed the Neighborhood Opportunities Program, will finance the construction and rehabilitation of hundreds of affordable apartments, and reduce the pressure on Rhode Island’s emergency shelter system.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
Learn More
Sponsored by Sen. Thomas Izzo, a Cranston Democrat, Sen. Robert Kells and Rep. Gordon Fox, both Providence Democrats, and Rep. Elaine Coderre, a Pawtucket Democrat, the program is a 10-year state initiative including three components: affordable family housing, supportive housing and neighborhood revitalization.
A pilot program of $1.5 million has already been funded for this year to put some people in transitional apartments. The budget for the remaining nine years calls for $5 million per year, which would go to the state Housing Resources Commission.
Chris Barnett, spokesperson for Rhode Island Housing, a proponent of the legislation, said this program has been discussed for a number of years, but the backup at Rhode Island’s emergency shelter system this year is what pushed the issue forward.
“There’s no place for folks who are in the shelter system to move,” he said. “They can’t afford to pay $500 to $700 a month in rent, and if there’s no place for them to move they stay in the shelter system and use it as permanent housing. When that happens it’s impossible for those who really need emergency shelter to get it.”
Izzo said that prior to the Neighborhood Opportunities Program, the state was investing virtually nothing in housing, and the gap between average income and average rent kept widening each year.
“The rule of thumb is that rent is 30 percent of your monthly income, and in Rhode Island there are a number of people paying in excess of 50 percent,” he said. “The other thing that makes this more compelling is you’re not talking about folks who aren’t working.”
The Affordable Housing Program, the first prong of Neighborhood Opportunities is aimed at reducing rents for families with annual incomes from $12,300 to $19,000.
Barnett explained the target group’s predicament further.
“The median sales price in Rhode Island for a single family home increased 14 percent last year, and as landlords pay more for properties, they’re going to charge higher rents,” said Barnett. “How many people got a 14 percent raise last year? The gap between what people make and landlords charge is growing.”
He said part of the reason for the increase in prices is people moving from Massachusetts because of what they understand to be cheaper prices, creating more demand and driving prices up.
The second prong of the NOP is the Supportive Housing Program, which will fund additional programs for individuals with disabilities. The program will produce housing units with rents affordable to those on SSI coupled with services and case management to stabilize individuals in permanent housing.
According to Izzo, of the 4,235 homeless clients using the emergency shelter system in 1999, 27 percent had medical problems, 15 percent had mental health problems, 14 percent had problems with alcohol and 11 percent had drug problems. Fifty-eight percent of the clients had no income or income of less than $5,000 per year. To stabilize this population in housing, the Supportive Housing component calls for affordable housing with social service support be available.
The Neighborhood Revitalization component of the program will provide grants to local communities for renovations, demolition and homeownership opportunities in neighborhoods designated for revitalization.
Coderre said all components of the program would allow people to stop using shelters as their permanent address and help give them independence.
Barnett explained the funding for the NOP.
“Every NOP dollar is expected to generate an additional $2 in financing for other sources such as commercial lenders and investment funds,” he said. “Landlords can get up to $20,000 per unit to rehab their apartments.”
Izzo said an additional $35 million bond issue for Neighborhood Opportunities will be placed on the 2002 ballot.
