Jennifer and Mike aren’t that different from a lot of young Rhode Island couples – 26 years old, fresh out of school and with have careers they’re looking to advance in the state. But according to a report released last week by HousingWorks RI, they might be forced to leave.
That’s because housing in Rhode Island is so expensive that with their combined $78,874 annual income (she’s a registered nurse; he’s in retail), they couldn’t afford to buy a house in most communities.
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If they lived in Phoenix, Ariz., on the other hand, they’d earn slightly less, but they could afford a house. Or in Raleigh, N.C., or Austin, Texas, among others. In Ocala, Fla., they’d be ahead by more than $20,000, while in Rhode Island they fall short by more than $11,600.
That calculation is based on the federal affordability standard, which says a household shouldn’t have to spend more than 30 percent of its gross income on housing. And while many are willing to spend more, the cost of housing is widely believed to be driving people away.
Jennifer and Mike are fictitious examples made up by HousingWorks RI, but “Rhode Island is full of Jens and Mikes, real people trying to make their way in the state,” said Ari Matusiak, the director of HousingWorks RI.
If they can’t find lower-priced housing, Matusiak said, “maybe they’ll decide to take their energy and talent elsewhere. The grass is greener over the border, and this is not good news.”
That concern is widespread.
“Affordable housing is a key ingredient to a bright economic future in Rhode Island,” said Saul Kaplan, executive director of the R.I. Economic Development Corporation. “We don’t want Rhode Islanders to leave because they can’t afford to live here.”
Laurie White, president of the Greater Providence Chamber of Commerce, noted in a recent interview that not only does the cost of housing appear to be aggravating the “brain drain,” but it also makes it hard to recruit new talent to the state.
When companies try to persuade specialized workers to come work here, she said, “they see the prices and they get spooked, quite frankly. So their salaries have to be grossed up, or there has to be some other compensating factor. So it’s a huge recruiting factor on all ends, not just for low- or middle-income workers.”
Kathleen Hittner, president of The Miriam Hospital, said that is a particular problem when it comes to recruiting much-needed nurses.
“We have a difficult time recruiting nurses,” she said. “And the source of housing is important to recruiting. We must be able to offer them housing they can afford.”
White, who is working with HousingWorks on the issue of affordable housing, said in that sense, the recent turnabout in the housing market could be helpful. Developers are also increasingly interested in building rental units rather than condos, because of the better cash flow, she noted, and that could help keep young people in the state.
“Kids who go to our colleges and then want to stay in the community are generally going to look for apartments,” White said. “They’re not interested in buying a home at this stage. So in order to keep younger people that are within perhaps the 18-to-30-year-old demographic, you need to have a lot of housing options and a lot of choice in apartment living.”
But even so, rental units can still be costly for people earning around the median wage in Rhode Island. In 36 of the state’s cities and towns. the Fact Book found that “the income required to afford the average rental cost is higher than the average annual wage for a private-sector job in that locality.” Moreover it found that for a two-bedroom apartment in Rhode Island an individual would need an income of $46,880, which is more than individuals make in “12 of the 14 top and fastest-growing occupations” in the state. Those include positions such as a nursing aide, home health aide or an orderly.
And although 346 affordable homes were created in 2006, only five cities and towns in the state have met the 10 percent required threshold.
“The shortage of affordable homes in Rhode Island is at a crisis level,” said Richard Godfrey, executive director of Rhode Island Housing and co-chair of HousingWorks RI, in a news release. “In many cases, professional, educated Rhode Islanders with good-paying jobs cannot afford to live here. When you consider the tens of thousands of Rhode Islanders who earn modest pay, live on one salary, or have children to support, you can see why owning or renting a home in our state remains out of reach for so many. We must work together to make Rhode Island a safe, affordable place to live and work.”
