PROVIDENCE – Despite a year and a half of falling home prices, affordable housing remains out of reach for many middle- and lower-income Rhode Islanders, according to a new report released this week.
The report – by the Washington-based Center for Housing Policy, the research arm of the National Housing Conference, an advocacy group – asserts that the problem is too many Rhode Islanders making too little money to afford a home.
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A Rhode Island resident would need to earn $62,707 a year to afford the state’s median-priced home as of the fourth quarter of last year, when the median price stood at $193,000, according to the report. (More information on how the center determined the affordability for homeownership and renting is available on its Web site.)
The report said that salary requirement puts a median-priced home out of reach for the average Rhode Island worker in a range of professions, including elementary school teachers, police officers, janitors and retail workers. Average salaries in those professions ranged between $22,530 and $51,175.
In fact, the report found that not a single one of the 10 occupations projected to grow the most in Rhode Island, as determined by the R.I. Department of Labor and Training, earns enough to meet the center’s calculation of the minimum salary required to buy a home. The closest to meet the threshold would be accountants, who earned an average salary of $51,106, which is more than $10,000 less than the amount the study said is needed to become a homeowner in Rhode Island.
“This study highlights the need for sustained investment in housing opportunities for all Rhode Islanders,” said Nellie M. Gorbea, executive director of HousingWorks RI, a consortium of organizations that works on housing issues.
“Affordable homes must be part of Rhode Island’s economic development strategy,” she said. “Housing is a key economic sector and is essential to keeping and growing Rhode Island’s workforce.”
In addition, the report asserted that renting a two-bedroom apartment in Rhode Island is also unaffordable for the average worker in nine of the state’s top 10 occupations, the exception being accountants.
The study said the average Rhode Island worker needs to earn $18.38 an hour to rent a two-bedroom apartment that costs $956 per month. According to the data it used, that would make rental units unaffordable for home health aides, who make an average $10.68 an hour, and waiters and waitresses, who average $7.45 an hour, among others.
“While it’s true that homes in Rhode Island have become more affordable to some Rhode Islanders due to declining real estate prices, low-interest rates and safe, affordable financing, we cannot lose sight of the fact that thousands of Rhode Islanders struggle to have a home they can afford to keep,” said Richard Godfrey, executive director of the quasi-state agency Rhode Island Housing.
In fact, the most recent reports on median housing prices do paint a moderating picture. In the first three months of 2009, the median price of a single-family home had declined to $180,000, according to the Rhode Island Association of Realtors, 26.53 percent below the $245,000 median price during the same 2008 period (READ MORE). At the same time, the median price of a multi-family home fell to $80,000 (half the median price from a year earlier), as foreclosures had a demonstrable effect on the market, according to the RIAR (READ MORE).
Additional information on the report is available at NHC.org. Additional information on HousingWorks RI is available at HousingWorksRI.org.
