Myths & Facts

MYTH: Investment in affordable homes won’t have a significant positive impact on the economy.

FACT: HousingWorks RI recently conducted a statewide economic impact study of the Building Homes Rhode Island (BHRI) program and the results are clear. Public investment in housing, specifically in affordable workforce homes, has a tangible, positive impact on Rhode Island’s economy.

The report analyzed the impact of the BHRI program for the State’s economy using the IMPLAN economic input-output model for Rhode Island. At the statewide level, it’s estimated that the initial $25 million in bond funding has generated:

* About 3,060 full and part-time jobs – one job for every $7,869 in bond funding
* $149.3 million in wages and labor income – or $6 for every $1 of bond funding deployed
* $393.9 million in total economic activity – or $15.80 in economic growth for every $1 of bond funding  deployed
* BHRI-funded and supported units also accounted for 31% of all building permit activity in Rhode Island in 2007 and 2008.

MYTH: The real estate market downturn and the foreclosure crisis have made homes affordable – we don’t need to support the creation of affordable homes in Rhode Island.

FACT: HousingWorks RI recently commissioned Hart Research Associates, a leading national survey research firm, to conduct a telephone survey of 500 registered voters in Rhode Island. The research dispels the myth that voters see the real estate market downturn as having solved Rhode Island’s affordable housing crisis.

While the median sales price of homes in Rhode Island saw an overall drop of over 26 percent in the first quarter of 2009, it’s crucial to recognize that the median price of non-distressed properties fell by only 8 percent. While distressed properties may seem like a deal, all too often these homes are in poor condition requiring extensive and costly improvements to make them livable.

Even with the inclusion of foreclosed property values, no community in Rhode Island has seen its median home prices increase less than 150 percent since 1999. What’s more troubling, the median wage in Rhode Island has not kept pace.

MYTH: Affordable homes are substandard and unattractive and will negatively change the character of my neighborhood.

FACT: Just look at the photos on this website or walk through the neighborhoods of affordable developments in Rhode Island and you’ll see that affordable homes can be among the best-built, best-maintained properties in the community. Requirements of the programs that finance the development of these homes ensure that affordable homes are well designed, attractively landscaped, and constructed of quality, energy-efficient materials. The high standard of construction for these homes allows them to better integrate and actually improve the communities where they are built.

MYTH: Affordable homes will lower my property value and be a drain on my community.

FACT:This is one of the most common and misleading misconceptions about affordable homes and one of the biggest concerns raised over the development of affordable homes. For several years, sufficient research has disproven these false notions. Architectural standards and adequate maintenance strongly influence property values. Properly maintained affordable housing developments, designed and built with sensitivity to the architectural and aesthetic standards desired by the community, may even increase the property values.

MYTH: Nobody I know needs an affordable home.

FACT: The current economic times have made it even more likely that you know someone who is either struggling to find a home they can afford or to afford the home they currently have. For year-end 2009, the household income needed to afford the median selling price of a single-family home ($199,900) was $56,207. The average monthly rent for a two-bedroom apartment was $1,232, requiring an income of $49,280.

In April 2010, The Urban Land Institute (ULI) Terwilliger Center for Workforce Housing released a study that, for the first time, calculated the combined costs of housing and transportation for families living in Rhode Island, most of eastern Massachusetts, and parts of southern New Hampshire. According to the study’s findings, the combined costs of housing and transportation for a mortgaged household in Rhode Island account for 58% of the median household income in the Ocean State. According to the study, this qualifies many Rhode Island communities as extremely cost-burdened.