For motorists zipping by on Route 2, it’s easy to miss the Pine View Apartments in Exeter. They’re located away from the road and down a winding driveway, 40 units spread over 10 gable-roofed buildings, each with a front porch.
They may be tucked away, but Frank Shea says the apartments are an important part of easing the housing crisis in this rural section of the state.
The affordable housing project was built in 2022 for more than $14 million by the nonprofit Women’s Development Corp. – for which Shea is executive director – and it was funded with the help of several federal housing programs and tax credits.
But a key part of the complicated financing package: bond money.
The WDC tapped into nearly $5 million from Building Homes Rhode Island, an affordable housing program funded solely by tens of millions of dollars from state housing bonds over the years. That money, in turn, allowed WDC to obtain much-needed federal tax credits.
Affordable housing projects almost always have financing shortfalls because rents are restricted, but Shea says the bond-funded BHRI made the difference.
“That’s 40 families who now have a home,” he said. “Suddenly, a project that seemed impossible is happening.”
Since 2006, Rhode Island voters have approved $310 million in housing bonds – five in all, ranging from $25 million to the massive $120 million approved in November 2024 – each feeding cash into Building Homes Rhode Island and a range of programs designed to either build affordable homes, maintain existing units, or convert underutilized structures into residences.
Now Gov. Daniel J. McKee’s administration is seeking more.
The governor’s fiscal 2027 budget plan includes a proposal that another $120 million housing bond issue be placed on the statewide ballot in November.
So far, state officials say, the bond issues that have already been approved have funded the creation of or preservation of more than 4,000 homes across the state. But more-specific details are harder to come by.
Administered by the R.I. Executive Office of Housing in partnership with the R.I. Housing and Mortgage Finance Corp., Building Homes Rhode Island did not have a centralized, project-level “dashboard” or continuously updated accounting of bond spending, relying instead on periodic reports and data releases.
And that information gap is leading some to raise caution flags about transparency and effectiveness of the bond spending, and the less-than-speedy rate at which the money has been parceled out.
“What are we building? How much does it cost? And how many units do we get?” said Jeffrey S. Hamill, senior policy analyst at the Rhode Island Public Expenditure Council. “Those are straightforward questions taxpayers deserve clear answers to.”
Housing officials acknowledge that none of the $120 million from the 2024 bond has even been awarded to specific projects yet, but they say they expect to start announcing allocations this spring.
In the meantime, they say, there’s no time to waste in seeking more borrowing while the shortage of affordable housing is taking its toll on the state. Adding to the need: the final dollars of COVID-19 pandemic relief funding – of which more than $200 million was directed into housing production – has to be expended by the end of the year.
Meanwhile, the R.I. Executive Office of Housing has set a goal of building 15,000 new homes by the end of 2030.
[caption id="attachment_519285" align="aligncenter" width="1200"]
BUILDING CHIEF: Deborah J. Goddard, the state’s housing secretary, says the planned expenditures of the $120 million 2024 bond issue include investments in homeownership, site acquisition programs and infrastructure funding.
PBN PHOTO/
MICHAEL SALERNO[/caption]
“This is about creating a pipeline,” R.I. Housing Secretary Deborah J. Goddard said. “There’s a goal ... and to meet that, you should expect housing bonds to be issued until that point.”
There’s little doubt that Rhode Island is experiencing a severe housing shortage. A RIPEC analysis in the fall of 2024 determined that more than 24,000 units of income-restricted housing are needed to close the state’s gap in affordability.
Voter-approved housing bonds are part of a multipronged approach to ease the cost of having a roof over one’s head – an approach that included the creation of the state housing department nearly three years ago and the addition of a housing secretary to the governor’s cabinet.
More recently, the state created the so-called “Taylor Swift tax,” which adds an annual surcharge on residential properties valued over $1 million. Revenue from the tax, which starts in July, will be directed into a special housing production fund.
Still, housing advocates argue, the continued flow of housing bond money remains vital, too.
“These bonds aren’t just numbers on a page,” said Brenda Clement, executive director of nonprofit policy group HousingWorks RI at Roger Williams University. “They’re creating homes and stronger communities across Rhode Island.”
MONEY UPFRONT
It’s not unusual for states to issue bonds to address urgent housing needs.
Indeed, in neighboring Massachusetts, lawmakers passed a $5.2 billion housing bond bill in 2024, which was more than double the size of the Bay State’s previous housing bond six years earlier.
Governments use bond issues – essentially borrowing from investors looking for a steady, reliable return – because a bond provides a way to raise large amounts of money upfront without relying on annual tax revenue.
But it comes with a cost.
Bonds must be repaid over decades with interest, creating fixed costs in future state budgets and leaving less room for other expenses without tax increases.
And yet the housing bonds have consistently garnered widespread support in Rhode Island. In 2024, voters approved the state’s biggest-ever housing bond issue – $120 million – by nearly a 2-to-1 margin.
According to McKee’s fiscal 2027 budget plan, the next $120 million housing bond would be part of $600 million worth of general obligation bond initiatives put before voters in November. Those bond issues would be targeted toward higher education facilities ($215 million), economic development ($115 million), green economy and clean energy ($50 million), career and technical education ($50 million) and cultural economy ($50 million).
State legislators must approve the governor’s plan before the proposed bond issues are put before the voters, and General Assembly leadership has already signaled their support, although to what extent is not yet clear.
House Speaker K. Joseph Shekarchi, who says he added $20 million to the final budget two years ago to McKee’s $100 million bond proposal, noted the size of the bond issue request “will be finalized as part of … the final budget in June.”
Senate President Valerie Lawson said, “Housing bonds are an important part of the solution as we work to create affordable housing units. I have been proud to support historic levels of housing bonds in the past and will carefully consider this year’s proposal.”
Shea is encouraged by the recent housing support, but he believes the bond issues in 2006, 2012, 2016 and 2021 were too small and not frequent enough. In fact, some housing advocates initially had pushed to seek a $150 million bond in 2024.
“The state underinvested for so long,” he said. “That’s how we got to be in the situation we’re in now.”
But while nearly all stakeholders agree on the importance of housing bonds, some question how efficiently the funds are being deployed.
For Hamill, a critical question is how many dollars have been invested per residential unit created.
Ahead of the vote in 2024, RIPEC projected that the $120 million bond would produce 586 new affordable and middle-income housing units, helpful but not nearly enough to ease the shortage of homes.
Rhode Island’s tactics, Hamill says, have relied on high-subsidy, 100% affordable developments. “Other tools – acquisition, mixed-income models, vouchers – can sometimes reach more households per dollar,” he said.
Goddard, who is the third housing secretary in three years, says the planned expenditure of the 2024 bond money is more structured than previous rounds, dividing investments into homeownership initiatives, site acquisition programs that help developers secure land earlier in the process and infrastructure funding designed to help municipalities prepare sites for residential development.
Those additions reflect what she described as a more comprehensive housing strategy, tackling the other hurdles communities face when trying to get projects off the ground.
[caption id="attachment_519286" align="aligncenter" width="1200"]
IN PRODUCTION: A house is under construction on Burnside Street in East Providence in October 2024, an affordable housing project developed by the nonprofit SWAP Inc. The two-family home has since been completed. A sign at the site calls for the passage of the $120 million housing bond issue in November 2024.
PBN FILE PHOTO/WILLIAM HAMILTON[/caption]
Demand for infrastructure funding alone doubled the original $4 million set-aside to $8 million. The department had received $22 million in applications.
Acquisition funds – seeded with $5 million – will allow nonprofits to take advantage of matching dollars for a $10 million pool, while smaller projects and permanent supportive housing received dedicated set-asides.
Another $5 million is going toward preserving existing subsidized homes.
Meanwhile, the state has set aside $66 million for developers that are proposing to build new housing projects or rehab existing ones. Those awards are expected to be announced in April.
“We’re not just putting up houses,” Goddard said. “We’re making sure communities have what they need to actually make these projects happen.”
‘CLARITY AND EFFICIENCY’
House Minority Leader Michael W. Chippendale, R-Foster, says he’s been keeping a close eye on the situation.
In September, he called for an audit of the R.I. Housing and Mortgage Finance Corp. – also known as R.I. Housing – after an analysis by his House Minority Caucus concluded that the self-funded housing financial agency appears to have excessive administrative costs.
R.I. Housing is playing a core role in administering and distributing about $66 million of the 2024 bond money.
“We need transparency on costs, oversight of project approvals and confidence that projects are being financed because they best meet Rhode Island’s needs,” Chippendale said.
Nevertheless, Chippendale expresses confidence that bond funding can be used more effectively to close the housing gap.
He said that R.I. Housing has been “extremely receptive” to working with his office and staff to review his concerns, providing data and answering questions on operations, staffing and project costs.
“Our goal isn’t conflict – it’s clarity and efficiency,” he said.
Before the 2024 housing bond, projects from the 2021 bond and earlier were managed by R.I. Housing, which tracked and reported progress internally, said R.I. Executive Office of Housing spokesperson Emily Marshall.
Oversight was provided by the Housing Resources Commission, which was phased out last year following the creation of the housing department. But there wasn’t a publicly accessible or standardized system for monitoring earlier bonds.
Now, the R.I. Executive Office of Housing says all programs administered through R.I. Housing will be tracked by its development team, with regular updates provided to the R.I. Executive Office of Housing, according to Marshall.
Programs run by other partners, such as those for site acquisition and home repair, are also required to report progress to the Executive Office of Housing, while programs awarded directly by EOH will collect data from awardees throughout the grant process, Marshall says.
And all 2024 bond programs will be monitored on the EOH’s new Housing Data Hub webpage, which was launched in late February as a centralized source for housing program updates and progress tracking, according to Goddard.
For its part, R.I. Housing is preparing to launch its own “dashboard” of funding expenditures, including bond money, at some point this summer, according to agency spokesperson Christine Hunsinger. The dashboard will encompass at least the previous five years.
R.I. Housing had done something similar with the COVID-era State Fiscal Recovery Funding. The online dashboard shows that $200.8 million administered by the agency created or preserved 2,312 housing units, moved another 1,428 units into the construction phase and provided $29.3 million in downpayment assistance.
In 2020, HousingWorks RI was commissioned by R.I. Housing to assemble a status report of the state’s accomplishments using the bond issues in 2006, 2012 and 2016, including the creation of 3,200 new and preserved affordable homes and support of 4,000 construction jobs. Clement is hopeful the organization will be asked to do the same this year, but R.I. Housing officials said that discussion hasn’t taken place yet.
Ultimately, Hamill said clearer metrics are likely the quickest way to head off any potential tensions around future bonds.
“When voters see exactly what their money produced – how many new units, at what cost – it builds trust,” he said. “Transparency strengthens support.”
Aside from transparency, Hamill also says officials should focus on the pace at which bond money is allocated because earlier rounds were slower to deploy.
The slow rollout of funding after bonds are issued may stem from the complexity of coordinating multiple agencies, funding streams and approval processes, Hamill says, but these are factors the public should be informed of when asking for more investment.
“If bonds take years to deploy, the public should understand why,” Hamill said. “Timing affects cost, and cost affects how many families we ultimately serve.”
Shea says the awarding of housing money is happening faster now than it has in previous years.
In fact, the WDC expects to learn in just a few weeks whether three of its affordable housing projects will receive financing assistance as part of the $66 million of the 2024 housing bond being administered by R.I. Housing.
The three projects are a 33-unit conversion of a former furniture store in West Warwick, the redevelopment and expansion of a public housing complex in South Kingstown that will double the size of the complex to 85 units, and a 57-unit rehabilitation and preservation project in South Providence.
None of the projects have broken ground, Shea says, because there’s no way to move forward without funding provided by the 2024 housing bond.
That’s what happened with the WDC’s $14.4 million Pine View Apartments in Exeter, one of numerous housing developments WDC has built and operates across the state.
A $4.6 million financial commitment from the bond-funded Building Homes Rhode Island program cleared the way for the Pine View project to proceed in 2022, also allowing WDC to take advantage of federal 4% low-income housing tax credits, which were sold to raise money for the project.
That gap financing was critical, Shea says, because every one of the 40 units is income restricted, reserved for residents who earn 30% to 60% of the area median income. Such restrictions reduce the amount of rental income generated for WDC to pay off loans.
The completed project immediately pushed the town of Exeter past the requirement that each Rhode Island city and town have at least 10% of its housing stock deemed affordable, according to Shea, although the town had since fallen below that mark again.
Shea points to the Pine View project as an example of how bond money can be used effectively and doesn’t see a problem with putting another $120 million housing bond on the ballot in November.
The money is desperately needed in this housing crisis, he insists.
WDC has another four or five housing projects in the pipeline that can ill afford to wait several more years for another bond issue, like it has in the past, Shea says.
“Now you’ve got momentum,” he said. “And [passing bond issues more frequently] makes the process much more efficient. That’s the way to sustain the momentum and the process.”
(Correction: A earlier version of this story gave an incorrect name for the Rhode Island state department that oversees housing. It is the R.I. Executive Office of Housing.)
