Since 2007, Nellie M. Gorbea has been leading HousingWorks RI, a 120-member consortium working to better affordable housing and public policy in Rhode Island.
Earlier this month, HousingWorks RI issued a report that said salaries of Rhode Island workers were not high enough to afford housing in the state. Gorbea spoke recently with Providence Business News about the study and other affordable housing issues in the Ocean State.
PBN: Can you explain the findings in the report you released this month?
GORBEA: The report was released by a national housing group, called the Center for Housing Policy, and it’s a fairly wide-ranging and in-depth look at the affordability of homes in about 200 metropolitan areas and the wages that are earned by workers in 60 occupations. What we did was take their very wide database and looked at the Rhode Island numbers and that was the basis of the comments we put out.
What it said is that, despite what you hear on the news about housing being a little bit more affordable in Rhode Island, we still have an affordability crisis. We need to continue to invest to make sure that our work force is able to stay and continue to grow in the state.
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PBN: Could you expand on the numbers? PBN: Is there also the argument that the minimum wage and salaries should go up or that all housing prices should go down? PBN: How is the credit crunch affecting affordable housing? PBN: And because there is less construction and fewer homes being built right now, do you expect that the situation will be worse – with even fewer affordable homes? PBN: Have you seen a drop in funding or was it pledged ahead of time? PBN: Do you plan to continue to grow HousingWorks RI? INTERVIEW
GORBEA: Look at, for example, rents in Rhode Island. This particular study came up with a fair-market rent for a two-bedroom of $956 a month. Then you look at Rhode Island’s economy – we have a substantial tourism economy. Well, if you look at two of the jobs in the study – waitstaff and food-prep workers – those are key jobs for the tourism sector here. Neither of those jobs, according to this study, pays enough that they’re able to afford renting this two-bedroom.
So I think that as we continue to look at economic-development policies and at which areas we want to grow – yes, we want to grow the higher-income jobs, but there are also a number of jobs in the economy that we just need to function. And those are our middle-income and lower-income jobs. People in those income brackets need to be able to afford a place to live.
GORBEA: The truth of the matter is that wages are not the only factor that’s hurting people. You have inflation and a number of other issues that affect a person’s ability to afford a home. So what we try to do is focus on the housing side of it. We have an under-supply of affordable homes, so the solution is really to increase the supply of affordable homes.
GORBEA: It definitely affects it. It is harder for people to get credit. However, there are programs through Rhode Island Housing and their partners, where first-time homebuyers can get a loan to buy their first house. And interest rates are really very low. When people do their homework – if they, for example, go through one of the home-buying training courses that one of the nonprofit developers offer – those are really valuable experiences. It shows them how much they can afford and what their credit is like and how they can improve their credit.
The opportunities are there. Yes, there are a lot of barriers – perhaps more than there were before – but I think what you end up with is a more educated buyer and one that really can afford that home once they get into it.
GORBEA: Yes. That’s one of the concerns that we have. We went into the real estate bubble with an under-supply of affordable homes. Now, we’re seeing, like you said, a slowdown in the construction process.
We are very lucky in Rhode Island that the voters [in 2006 passed a $50 million housing bond], so that now that’s one of the few sources of funds available for developers to build those affordable homes. So we have a little bit of construction.
That’s a point that we like to make at HousingWorks RI, which is: Housing has to be a part of the economic strategy of the state. That’s from a job-creation point of view – certainly the housing industry in Rhode Island creates a lot of jobs and every time someone moves into a new home … people go out and buy things.
GORBEA: We’re a group of 120 organizations that came together during the real estate bubble and rallied around the biggest issue, which was the bond issue. It was such a unique experience for everyone involved – to have the businesses, chambers, along with nonprofit developers, along with social service organizations and unions.
The original funders, who are the Rhode Island Foundation, United Way of Rhode Island and Rhode Island Housing, decided to continue funding it for a number of years.
GORBEA: It was pledged ahead of time, but, having said that, like any other nonprofit we’ve trimmed our sails and are trying to be as effective as possible. The funders definitely have a lot of demand on their funding.
GORBEA: We are hoping to grow and add businesses and other organizations to the coalition. We would like to see every gubernatorial candidate in the coming race embrace housing as part of their economic-development strategy. I think that’s key – you can’t just talk about the companies. You have to worry about where the employees are going to live. •
Nellie M. Gorbea
POSITION: Executive director of HousingWorks RI
BACKGROUND: After graduate school at Columbia University, Gorbea worked in finance at Fleet Bank in Boston. She then became a program officer at the Rhode Island Foundation. She returned to her native Puerto Rico in 1998 to work in public finance and served as the economic adviser to the governor. In 2000, she served as business development officer for altamente.com. Then she spent four years as deputy secretary of state and director of administration under then-Secretary of State Matt Brown, before becoming executive director at HousingWorks RI in 2007.
EDUCATION: A.B. with a concentration in public policy and Latin American studies, Princeton University, 1988. M.P.A. in public administration, Columbia University, 1992.
FIRST JOB: At 17, Gorbea worked as a law clerk for an insurance brokerage in Puerto Rico.
Residence: North Kingstown
AGE: 41
