PROVIDENCE – Faced with an estimated nearly 8,000-unit shortage of affordable housing by 2030, the city of Providence will sell $20 million in bonds to help close the gap, city officials announced on Wednesday.
The decision comes in part based on a new report from consultant RKG Associates outlining the severity of the city’s affordable housing crisis and recommending ways to solve it. Among the many recommendations made in the 178-report, which is still a draft, was the sale of up to $20 million in housing bonds backed by revenue the city generates from tax stabilization agreements with developers. Sale of the bonds via the Providence Redevelopment Agency will allow the city to generate up to $1.4 million for 1,500 new housing units, the report stated.
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The bond sale, with was approved by the city council in October and officially announced by Mayor Jorge O. Elorza on Wednesday, represents the city’s first-ever affordable housing bond. The bond will be administered through the Providence Redevelopment Agency, which will launch a call for proposals for construction and project financing.
However, this revenue, combined with an estimated $2.1 million in federal dollars committed to affordable housing in the city, still represents just a fraction of the $225 million annual cost the report projects the city will need to meet existing and future demand for affordable housing – both rental and ownership-eligible units.
Acknowledging the gap between potential income and revenue needed, the report outlined a host of “innovative” financial strategies the city can pursue, leveraging the $3 million it already has in its coffers as predevelopment capital for developers, along with pursuing low-interest loans and bank funds and partnering with area foundations to grow its capital pool.
A final version of the report is expected to be published in early 2021. Residents can read and submit feedback on the current draft at http://www.providenceri.gov/planning/comprehensive-housing-strategy/.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
