PROVIDENCE – A Cambridge, Mass.-based social equity firm has been selected by the R.I. Department of Housing to publish a series of reports for a statewide housing plan through 2024.
R.I. Housing Secretary Stefan Pryor informed 15 fellow members of the Special Legislative Commission to Study Housing Affordability of the move during a presentation at the State House Thursday. The state entered into the contract with Abt Associates earlier this week with an initial investment of $339,316.
“This is our first expression of the selection and these selection efforts,” Pryor said. “It’s a firm that has done extensive work in the housing field in particular.”
Pryor, who is a member of the commission, said the firm has done similar work producing statewide housing plans in New Hampshire and New Mexico and expects multiple plans to be produced in between winter 2023 and the end of the 2024 calendar year.
According to a 2023 study commissioned by the Rhode Island Foundation performed by Boston Consulting Group, housing construction in the state was last in the nation in 2021, at only one unit per 1,000 residents. About 80% of the state’s housing units were built before 1980.
That low-production rate led to skyrocketing housing prices due to a lack of supply to meet demand. The supply crisis led the Providence Metro Area (including Fall River and New Bedford) to rank fifth highest year-over-year rate of rental cost increases in the country at 23.8%, according to the HousingWorks RI 2022 Housing Factbook.
“Building affordable housing is not per se a competition but we are coming from behind from the lowest position in the country,” Pryor said.
The housing secretary also said the agency was looking to encourage housing construction by creating a separate entity under Rhode Island Housing, the state’s housing financier. Pryor said this separate entity would help identify and screen properties and sources of capital to facilitate and promote development. Recruitment of key staffers for the new entity would start in the next 30 to 60 days, Pryor said.
But commission member and Rhode Island Foundation CEO and President David Cicilline wondered if the entity was redundant.
“As you were describing its functions, it sounded a lot to me like Rhode Island Housing,” Cicilline said.
“What is the value of a separate entity?”
Pryor responded that while Rhode Island Housing did a good job financing projects, an entity supporting businesses and agencies in problem solving and design projects would help move market forces toward the creation of more housing.
“We have a broken system, and we are nowhere near equal to the task,” Pryor said. “It is not enough to set up programs and passively wait for developments tomorrow.”
“We must exercise caution, we have to preserve integrity,” he continued. “We have to help the market generate some new things to really get going on housing development. Leaning into the development process. That’s where we know we can do more.”
Commission member Melina Lodge, executive director of the Housing Network of Rhode Island, asked how close the department was in hiring for its 11 listed jobs. The positions include a deputy secretary for housing with a focus on planning and development and an executive director for homeless community support.
“Speak a little bit about your efforts to hire Rhode Island candidates,” Lodge asked of the secretary. “So we can hit the ground running instead of there being a learning curve.”
Pryor said the department had been publicizing the openings through word of mouth, job advertisements, and state job postings and that the process is well underway.
“We will certainly emphasize local recruitment and emphasize beyond,” Pryor said. “We will see a mix in that regard.”
Pryor also highlighted the progress made by the department and local community outreach agencies in tackling the state’s homelessness crisis since the May closure of the Cranston Street Armory Warming Shelter. He said the state helped bring 222 rooms online at sites in North Smithfield, Pawtucket, Providence, Warwick, and Woonsocket.
“I want it to go noticed rather than unnoticed,” he said. “What we’re trying to do is alleviate concerns and lift barriers.”
There were 334 unhoused and unsheltered Rhode Islanders reported by the Rhode Island Coalition to End Homelessness during its 2023 Point in Time Count.
Though asked by panelists, he declined to comment on what potential sites the state was looking into procuring to expand the shelter program beyond the Charlesgate Building on North Main Street in Providence where Amos House shelters 47 families.
Commission member and House Minority Leader Rep. Mike Chippendale, a Foster Republican, asked Pryor for assurances that the department was doing more to tackle the issue than finding housing.
“Prevention must be part of our overall approach,” Chippendale said.
Pryor agreed, citing $3 million spent in eviction prevention operations to help families and individuals avoid losing their homes.
“It is far better that we help Rhode Islanders stay in their homes if there’s an appropriate legal route to do that from a cost effectiveness perspective and that of the families,” Pryor said. “For the housing production aspect of ameliorating, addressing homelessness, most of the projects will come to fruition in a couple of years.”
To that end, the department hopes to get a state low-income housing tax credit program started during the winter that would encourage developers to build housing affordable to those of stressed means. The $30 million annual program is guaranteed state funding through 2028.
Pryor emphasized that the work is only getting started.
“It does matter that we consistently remind ourselves that unfortunately our state is coming from behind,” he said.
In addition to Cicilline, Lodge and Chippendale, the commission’s members who attended Thursday’s meeting included: David Caldwell, president of Caldwell and Johnson Custom Home Builders; Brenda Clement, executive director of HousingWorks Rhode Island; Emily Freedman, director of community planning for the City of Providence; Caitlin Frumerie, executive director of the Rhode Island Coalition to End Homelessness; Jennifer Hawkins, executive director of One Neighborhood Builders; Robert Marshall, a lobbyist with the Rhode Island Developmental Disabilities Council; Kenneth M. Mallette, Jr., tax assessor for the City of Cranston; Courtney Niccolato, president and CEO of the United Way of Rhode Island; Amy Rainone, director of government policy and relations for Rhode Island Housing; Chairwoman Rep. June Speakman, a Warren Democrat; Rita Danielle Steele, founder and principal at Steele Realty Consultants International; and Linda Weisinger, executive director of Pawtucket Central Falls Development.
The commission has a total of 19 members, including Pryor. Absent from Thursday’s hearing were Joshua Berry, Lincoln town planner; Rep. Joshua Giraldo, a Central Falls Democrat; and Scott Wolf, executive director of Grow Smart Rhode Island.
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There’s plenty of economic data explaining the skyrocketing housing costs, and basically you have a situation where all factors are acting in the same direction with regards to pushing prices higher. It’s ironic to me that we need a social equity consulting firm, from Cambridge, MA to study this. I wonder what their report will highlight and what they’ll say the cause is. It kind of sounds like Pryor is shopping for his answer. It’s very simple, MA is even more challenged from a housing affordability perspective, and that makes RI relatively affordable yet close. You add in the huge increases in the cost of insurance, taxes, financing, and regulatory changes. You add in that rents lag housing cost increases and that rising interest rates don’t always work like you think they should. You add in that for the last 2 years government transfers provided people with more income and they got used to those spending levels. And on top of all you have a demographic wave hitting with Gen Z and Millennials entering peak home buying years while the Boomer generation is (for good health reasons) deciding to age in their homes or can’t downsize because that housing stock isn’t there either. It’s ironic that the consulting firm is from Boston, because I used to live there, and I saw same the hostility toward developers that I see here. I moved here for a better and higher quality of life 5 years ago, and the secret is out. RI is a great place to live, and people are moving here. Unfortunately our policy makers didn’t have the foresight to consider that this was possible in the late 2010’s and that puts the housing market in a supply driven squeeze.