As Martha L. Wofford stood at a construction site in Providence’s West End in August 2022, the scaffolding at the site caught her eye and triggered some deeper thoughts.
The metal structures were the same shade of blue as the logos for both Habitat for Humanity of Rhode Island-Greater Providence Inc. and Blue Cross & Blue Shield of Rhode Island, recalls Wofford, CEO and president of the state’s largest health insurer.
Blue Cross employees, including Wofford, were helping Habitat for Humanity for the day, preparing for the construction of a four-bedroom home on Bucklin Street. It was meant to be only one day of volunteering, then Blue Cross would move on to another community project. But that color gave Wofford a different idea.
“We have so much in common,” she said. “We care so much about affordable housing, maybe we could actually take ownership of this location and build this house from beginning to end.”
After that, Blue Cross volunteers worked at the site twice a month, logging more than 1,000 hours, and BCBSRI invested $75,000 for construction costs that was matched by a city grant – a case of a large private employer throwing some of its substantial resources into alleviating in a small way a problem that plagues Rhode Island: a lack of housing production.
Wofford and BCBSRI are under no illusions that the house on Bucklin Street will solve it. After all, according to the National Low Income Housing Coalition, Rhode Island would need to build about 24,000 affordable housing units to meet demand. Meanwhile, home prices and rent have continued to rise – especially in Providence.
But some housing advocates think the Rhode Island business community should be playing a greater role in addressing the shortage of affordable housing.
“I think they [businesses] could make a huge difference,” said Michelle Wilcox, CEO and president of Crossroads Rhode Island. “It’s going to take others involved in the work to really get us out of this crisis that we’re in.”
It’s happened elsewhere. In Seattle, mammoth tech companies Microsoft Corp. and Amazon.com Inc. have directed millions of dollars to housing philanthropy. Meta Platforms Inc., Google LLC and Apple Inc. have done the same in the San Francisco Bay area. And in 2019, Wells Fargo & Co. made a multiyear, $1 billion commitment to address housing affordability.
Woonsocket-based CVS Health Corp., one of the country’s largest pharmacy chains, also has invested millions of dollars in affordable housing projects nationwide. Most recently, the company directed $19.2 million to a Colorado housing development in April.
Right now, Blue Cross is one of a few major Rhode Island-based companies that has dedicated resources to developing housing here recently.
There are benefits, particularly for companies that make investments through the low-income housing tax credit program, which CVS has done. The federal program gives state and local housing agencies the ability to issue tax credits for the acquisition, rehabilitation and construction of rental housing for lower-income households. It’s intended to encourage private-sector investment in affordable housing.
At the same time, boosting housing production can assist businesses struggling to recruit and keep talented workers because of a lack of places to live. A Richmond-based manufacturing company is even taking preliminary steps to build low-cost rental units on company property.
Voters statewide are set to decide on a $120 million housing bond this November – the largest of its kind in the state’s history – that would provide $80 million for affordable housing and up to $10 million for public housing.
But while Stefan Pryor, who stepped down as the state’s housing secretary in July to take a job with an investment firm, insisted before he left that the R.I. Department of Housing is “actively exploring” ways to boost housing production, there’s little indication of outreach and coordination between state housing officials and the private sector.
Wilcox acknowledges that housing development is a complicated process and not something every business may be interested in, especially if they have other philanthropic goals.
Still, House Speaker K. Joseph Shekarchi, who has been grappling with the crisis, says he’s open to accepting help from businesses.
“I welcome their participation; I ask for their participation,” Shekarchi told Providence Business News in an interview. “I would work diligently with them or anyone else to help create, move the needle.”
[caption id="attachment_473372" align="aligncenter" width="1200"]
CHIPPING IN: CVS Health Corp. has committed $19.2 million to help finance an 85-unit affordable housing project in Arvada, Colo. This is a rendering of what the complex will look like when completed in 2025.
COURTESY CVS HEALTH CORP.[/caption]
BIG INVESTMENT
Shekarchi might want to have a conversation with CVS.
The company has directed tens of millions to financing affordable housing across the U.S. ever since CVS announced its Destination: Health initiative in 2019, which focused on helping people improve their health outside of the clinical setting. Addressing housing insecurity was a core part of the initiative.
In 2020 alone, the company invested $114 million in affordable housing units in 30 cities across 12 states.
Most recently, CVS provided $19.2 million for an 85-unit development in Arvada, Colo., partnering with Boston Financial, a so-called tax-credit syndicator that raises money from investors that receive credits, and then the syndicator identifies low-income housing projects in which to invest the capital.
When completed in 2025, the four-story apartment complex in Arvada will be available for families and homeless individuals who earn less than 30% of the area’s median income.
In the past, the company has invested $4.5 million in affordable housing development in Newport, Providence and Washington counties, creating or preserving 161 units, according to Tara Burke, a CVS spokesperson.
Yet while CVS has invested $21.5 million in affordable housing in Massachusetts, Maine and Connecticut over the last three years, Burke acknowledges that the company has not made any recent affordable housing investments in Rhode Island.
CVS continues to “evaluate and consider these opportunities across the country, including within New England,” Burke said.
Banks have also invested in affordable housing because some are obligated under the Community Reinvestment Act and others see it as a wise investment.
Providence-based Citizens Financial Group Inc. has been directing capital to affordable housing in and outside Rhode Island for years.
Between 2019 and 2023, Citizens provided more than $342 million in loans and investments, including $140 million in low-income housing tax credits, to build or preserve 1,436 units of affordable housing in Rhode Island.
Reza Aghamirzadeh, Citizens’ community development director, says the bank has focused on expanding affordable housing as a way to help make Rhode Island a more attractive place to live and work.
Bank of America Corp., too, has provided financing for housing projects, including a five-story development on Summer Street in Providence that will feature 176 one-bedroom apartments for those who were previously homeless.
The project, developed by Crossroads and slated to be finished in fall 2025, is supported by $76 million in debt and equity financing or investments by Bank of America, using the low-income housing tax credit program.
The bank says it provided more than $7 billion nationwide to create more than 11,000 multifamily rental units in 2023. In Rhode Island, the bank allocated $23 million for Dakota Partners’ 48-unit affordable housing at Brookside Terrace in East Greenwich, which was completed in 2022 and aimed at tenants making below 30%-60% of the area median income.
Bank of America’s involvement in the Summer Street development was a result of the bank’s long-standing partnership with Crossroads, says Maria Barry, the bank’s community development banking national executive who is based in Rhode Island.
Bank of America Chairman and CEO Brian T. Moynihan once served as the nonprofit’s chairman, and the bank’s Rhode Island president, Kevin Tracy, is a board member.
And Barry says she is serving her second term on the R.I. Housing and Mortgage Finance Corp. board.
“While affordable housing financing is my job, it is also very personal to me,” Barry said.
‘HUGE STRUGGLE’
Rep. June Speakman, D-Bristol, says businesses should have an even greater role in affordable housing development and some, such as large companies relocated to the state, have a responsibility to assist since they have the resources and often bring higher-income employees who may displace lower-income residents.
“We’d love projects that bring 2,000 jobs to Rhode Island, but where are those workers going to live?” said Speakman, who is also a political science professor at Roger Williams University.
Shekarchi agrees that businesses could participate in developing housing for their employees. More than a century ago, mill owners would build villages surrounding their factories for their workers and their families to live. While the present-day solution doesn’t need to go to that extreme, Shekarchi says businesses could look into developing on-site housing.
That’s what Karl Wadensten has in mind.
The CEO and president of Richmond manufacturer VIBCO Inc. envisions adding small and easy-to-construct rental units on company property for his employees.
Wadensten says he has seen many of his 110 employees struggle in the rental market around rural Richmond as properties are sold and rates skyrocket. Some workers commute long distances from places where housing costs are lower.
“It’s a huge struggle,” Wadensten said. “It affects their quality of life.”
Under Wadensten’s plan, he would have initially eight to 10 “tiny” houses on land at VIBCO, which is zoned for mixed-use development.
Employees would make affordable monthly rent payments – $800-$900, about half the market rate – for up to five years, he says. Employees would pledge the rent savings to their 401(k) account, which could then be used for a down payment on a home.
Wadensten says his daughter Tatum and son-in-law Seamus Kirby were set to seek permits and approvals from the town. But when Kirby passed away in March, these plans were put on hold. Wadensten expects to proceed in the fall.
“It’s imperative that they [businesses] contribute to housing,” Wadensten said. “That’s why I wanted to do it, so there’s an example because it’s not as hard to do as you think.”
Housing certainly has become an issue for REGENT Craft Inc., a North Kingstown-based company that’s developing electric sea gliders.
Since relocating to Rhode Island in 2022, REGENT has grown dramatically, creating 135 new jobs between the company and its suppliers, according to Billy Thalenheimer, co-founder and CEO.
At the same time, the company has lost out on hundreds of job candidates in all stages of the recruitment process because of concerns over finding housing in Rhode Island and whether spouses could find a job in the state.
Of the 50 employees the company has relocated, each one has needed some housing assistance, whether it was a relocation bonus or REGENT finding temporary apartments in both Providence and East Greenwich, Thalenheimer says.
Now as Thalenheimer is looking to expand the company by hundreds of employees in the next few years, he’s preparing to spend even more to help employees with housing.
“We’re definitely feeling it financially,” he said.
Thalenheimer says private companies should be involved in signaling what methods of developing affordable housing are working and what needs to be changed. But he says the private sector is already indirectly contributing to making housing more affordable through higher salaries and relocation bonuses. That said, he would be open to the opportunity of directly investing in housing developments.
“I think companies can play a more direct role, but at the end of the day it’s already partially being done indirectly,” Thalenheimer said.
[caption id="attachment_473371" align="aligncenter" width="1200"]
HOUSE HELPERS: Volunteers from Blue Cross & Blue Shield of Rhode Island raise the frame for a house in Providence they’ve been working on with Habitat for Humanity of Rhode Island-Greater Providence Inc. Workers from the health insurer have put in more than 1,000 hours to get the house built.
COURTESY BLUE CROSS & BLUE SHIELD OF RHODE ISLAND[/caption]
IN ALIGNMENT
For nonprofit health insurer Blue Cross & Blue Shield of Rhode Island, affordable housing directly aligns with the company mission, executives say.
“The way I like to think about it is that housing is health,” Wofford said. “It’s absolutely necessary to have safe, affordable housing to have good health and well-being.”
For the past five years, the insurer has funded the RI Life Index in partnership with Brown University’s School of Public Health and this survey helps generate data to guide Blue Cross’ investment decisions, Wofford says.
Also informing decisions is the insurer’s annual competitive grant program, Blue Angel Community Health Grant, which was established in 2002. Since 2019, the program has been focused on addressing affordable housing in the state, leading the insurer to invest almost $2.7 million in grants to 23 organizations, bringing the insurer’s investment in affordable housing to $8.5 million since 2019.
Along with this, Blue Cross has worked with organizations such as Crossroads for more than two decades and pledged a $4 million investment over four years to Local Initiatives Support Corp. Rhode Island, a nonprofit community development financial institution.
That said, Wofford says state officials don’t necessarily need to ask businesses to contribute to affordable housing; their job is to create policies and spend tax dollars as they see fit.
But as the state faces an uphill battle in addressing the affordable housing crisis, she says there’s value in the private sector in relying on data for investment decisions and collaborating with community organizations to tackle the problem.
“We have a greater impact together,” Wofford said.
NO TALKS
The R.I. Department of Housing was created in 2023 in part to assemble and implement a housing plan that included the development of affordable living opportunities, but the department seemingly has been under fire from the start.
The state’s first “housing czar,” Josh Saal, resigned in early 2023 after facing months of public scrutiny and criticism from top lawmakers for his lackluster leadership. Gov. Daniel J. McKee quickly appointed Pryor, the state’s former commerce secretary who stepped down to run for general treasurer in 2022, as the new housing secretary.
Still, the housing department has never seemed to gain much traction and is now being led by an interim chief while McKee searches for Pryor’s permanent replacement.
Before stepping down in July, Pryor noted the creation of a state-level low-income housing tax credit program as one of the points of progress in the housing crisis during his tenure. The program is capped at $30 million annually for five years, and it wasn’t immediately clear how many credits have been awarded in the year since it was created.
He told PBN in a statement last month that the department is “actively exploring” ways to boost housing and that corporations – along with educational, medical institutions and philanthropy groups – can contribute to solving the housing problem.
But “to date, we have not received specific corporate investments to affordable housing,” Pryor said in the statement.
Shekarchi says he, too, has not had discussions with private companies about their role in boosting affordable housing, but he adds that he is constantly looking at what actions other states are taking.
In Connecticut, for example, employers that contribute to nonprofit affordable housing programs can get dollar-for-dollar reductions in corporate business taxes from the state housing tax credit contribution program.
Shekarchi said the program is one “certainly worth exploring and gathering more information.”
Along with funding and lending money, Shekarchi says he’d like to see businesses use their community status to advocate for more affordable housing, even speaking in favor of projects at municipal meetings to counteract opposition.
“There’s so many ways to do it,” he said.
Speakman, who has pushed for measures at the Statehouse to induce affordable housing production, also says the topic has not come up in conversations among state lawmakers. But she adds that she plans to put it on the agenda of the House Commission on Housing Affordability that she chairs this fall.
“Finding a way to get the business community more involved is something I think we need to take a closer look at,” Speakman said.
(SUBS 29th paragraph to more precisely describe the low-income housing tax credits Citizens Financial Group In. received between 2019 and 2023.)
