PROVIDENCE – More than half of Rhode Islanders who rent their homes or apartments are cost burdened, and one-third of homeowners are similarly strapped, which is diminishing their ability to spend money on other necessities.
This is among the key findings in the 2016 Housing Fact Book, released on Wednesday by HousingWorks RI at Roger Williams University.
The fact book, which describes housing affordability in the Ocean State, reports that collectively, 55,800 homeowners spend $1.26 billion on their mortgage and housing expenses, which is decreasing their purchasing power statewide by $486 million.
In 2015, the report found, a household earning the state’s median household income would be able to afford a median-valued, single-family home in only six of the state’s 39 cities and towns. The median household income was $54,891 in Rhode Island last year.
The affordability threshold is 30 percent of income. Households that spend more than that are considered cost-burdened.
Where can the typical Rhode Island household afford to own? The data reported in the Housing Fact Book found the household earning the state median of $54,891 could afford to buy in Central Falls, Providence (outside East Side), Pawtucket, Woonsocket, West Warwick and Warwick.
The most affluent communities include New Shoreham, where the income needed to afford a median-priced home was $280,635 in 2015, and Jamestown, where the income needed was $144,631.
Forty percent of the state’s households are now renters. Many workers, including bank tellers, construction workers and childcare providers, do not earn enough to afford market-rate rents, the report states.
And the problem is growing in severity.
Between 2014 and 2015, housing expenses for a two-bedroom apartment, which include rent and utilities, rose to $1,238 from $1,172.
The income needed to affordably rent a two-bedroom apartment ranged from $38,400 in Central Falls to $65,280 in North Smithfield.
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