Statistics on...
(For a community-by-community analysis of housing affordability, check out HousingWorks RI's Fact Book and city/town fact sheets.)
How Bad is it in Rhode Island?
A house little bigger than a garage now commands $200,000
In April 2005, the Providence Journal went looking for the cheapest house in South County. The reporter found it in Westerly, where $199,000 would buy you 806 square feet of living space in a one-bedroom home with asbestos siding. Property values across Rhode Island continue to rise in 2005 – up another 6.8 percent from 2004. Source: www.riliving.com, State-Wide Multiple Listing Service. Click here for up-to-date median home prices by town.
Real Estate Appreciation is Third Sharpest in Nation, Outpacing California's
Since 1980, house prices in Rhode Island rose 494%, the fourth steepest rise in the U.S., only trailing Massachusetts (630%) and New York (529%) and beating California’s rise (515%). Home prices generally in the U.S. rose 285% in the same period. Source: Office of Federal Housing Enterprise Oversight. Click here for national stats.
Demand for Apartments Outstrips Supply
Low vacancy rates drive up rents. In 2004, apartment vacancies in Rhode Island were among the scarcest in the nation. Vacancy rates have been tiny here since 1986. Source: U.S. Census. Click here for rental vacancies by state, 1986-2004.
About half of our existing households can no longer afford to rent here
Apartments are scarce...and expensive. In 2005, the average rent in Rhode Island for a 2-bedroom apartment was $1,147. If you stick to the federal guideline for affordability (no more than 30% of income spent on housing costs), you’d have to earn about $45,880 to afford rent that high. About half of our households can’t, since the median income in Rhode Island is less than $50,000. Sources: Rhode Island Rent Survey Year-End 2004 vs. Year-End 2005, U.S. Census.
RI Homeownership: 47th Worst in Nation in 2005
Rhode Island’s homeownership remains near the bottom nationally, as it has for 20 years. Home ownership is a key measure of prosperity, since it is how many people start to acquire personal assets and a higher standard of living. Sources: U.S. Census and the Corporation for Enterprise Development, which issues an annual report card on economic development issues for each state. Click here for home ownership by state, 1984-2005.
Homeownership is in Decline
“Worse still, Rhode Island has failed to keep pace with the nation in recent years, with a declining home-ownership rate since 2000 despite gains at the national level over the same period.” Source: WNDC report, based on U.S. Census data. Download PDF.*
Between 1995-2000, Rhode Island’s population grew four times faster than new housing stock, as measured by building permits. Source: Fleet/Rhode Island Public Expenditures Council report. Download PDF.*
Nowhere is it More Expensive to Build than in the Northeast
In 2004, the median square price per foot (excluding land) was $100.33 in the Northeast vs. $93.68 in the West vs. $85.52 in the Midwest vs. $67.61 in the South. Source: National Home Builders Association. Click here.
The Cost of Land Here is Prohibitive
“Nationally, the finished lot costs are approximately 34 percent of the total house price, while it is 45 percent of the total house price in Rhode Island. This appears to be principally driven by the cost of land.” Source: Fleet/Rhode Island Public Expenditures Council report. Download PDF.*
Housing Production is Low and Slow
Rhode Island’s production of new homes has fallen precipitously. Key factors: high land and construction costs and a permitting process that is painfully and unprofitably slow. In 1986, the last peak, developers built 7,274 units here. In 1989, that number entered a deep slump. By 2005, the number of authorized building permits had fallen to 2,836. When last measured, the state’s population was growing four times faster than new housing stock.
Sources: U.S. Census, Fleet/Rhode Island Public Expenditures Council report. Download PDF.*
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What the Future Holds
Rhode Island's Population is Growing
Where will they all live? By 2025, we’ll have another 100,000 people living here. Source: U.S. Census. Download PDF.*
Even so, school populations in Rhode Island have started to drop
School populations in Rhode Island will experience a steady, 10-year decline beginning in 2005, according to U.S. Census projections. The state’s school-age population will not return to its current level until around 2028. Source: Rhode Island Statewide Planning Program, August 2004. Download PDF.*
More Service Workers
“The long-term shift from goods-producing to service-providing employment is expected to continue,” the U.S. Department of Labor predicts. The top ten occupations with greatest projected growth 2002-2012 are packed with such moderate- and low-wage service jobs as retail sales workers, nurses aides, food preparation workers, cashiers, customer service representatives and janitors. Click here.
Our economy urgently needs more housing for its fastest growing jobs
According to a 2004 statewide study, more than half the jobs in Rhode Island now pay wages insufficient to afford the average rent on a two-bedroom apartment. Rhode Island’s median house price is unaffordable for three-quarters of our wage earners. And it won’t get better in the future.
“Almost 24,000 of the new jobs projected to be created in Rhode Island by 2010 will pay wages too low to rent the average 2-bedroom apartment in the state – even when we optimistically assume that wages will keep pace with rents. That’s almost half (48%) of all new jobs being created. Even more of the new jobs – almost 35,000 – will pay wages insufficient to buy a home at today’s wages and home prices. Fast growing jobs that pay an insufficient wage to afford housing include many occupations that are fundamental to the life of a community, from teacher assistants to child care workers to office clerks to food service workers.” Source: WNDC report, executive summary. Download PDF.*
Rhode Island can be the exception to the national rule
Or we can let the crisis crush hopes for a decent home for much of the state’s future workforce. “Unfortunately, affordability pressures are unlikely to ease,” says The State of the Nation’s Housing 2004, published by the Joint Center for Housing Studies of Harvard University. “Many of the low-wage jobs created by the economy do not pay enough for a household to afford (at 30% of income) even a modest one-bedroom rental anywhere in the country. Similarly, retirement incomes are so meager that many seniors face heavy housing cost burdens on top of escalating healthcare costs.” For latest State of the Nation's Housing report, click here.
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Homelessness and the Rhode Island Workforce
Meet Rhode Island’s new homeless: the Employed
They have jobs. They have kids. What they don’t have is a place to live that they can afford. According to the latest data gathered by the state’s Homeless Management Information System, almost 1,000 of the people in Rhode Island’s homeless shelters last year were employed.
It Wasn't Always This Bad
“The problem began in 1999, when real estate prices started to soar. By 2000, every homeless shelter in the state was full.” – Noreen Shawcross, former executive director of the Rhode Island Coalition for the Homeless, in a February 2004 Providence Journal article.
We have a huge low-income workforce
Nearly 123,000 Rhode Island households earn less than $25,000 per year and cannot afford unsubsidized rents. Despite this, there are less than 35,000 assisted and public housing units available combined. Despite this, there are just about 35,000 subsidized housing units available.
The income necessary to afford the HUD-defined Fair Market Rent for a two-bedroom apartment is $18.42 per hour, more than double the minimum wage.
In 2004-2005, Rhode Island’s homeless shelters served 6,408, an all-time record for the fourth straight year.
1,717 children were shelter residents, an increase of 10% from the year previous and an all-time high.
1,703 homeless women stayed in Rhode Island shelters in 2005.
The average wait for Section 8 vouchers is almost 5 years and many waiting lists are closed.
Federal support for new housing has been substantially reduced and continues to decline.
Sources: Crossroads Rhode Island (www.crossroadsri.org/stats.htm) and the Rhode Island Coalition for the Homeless (www.rihomeless.com/facts.htm)
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