May 17, 2006
2006 HousingWorks RI Fact Book released today reveals: Rhode Island’s housing crisis worsened in 2005; more cities and towns fall off the ‘affordability index’
Eight of 10 households can afford homes in only 3 of state’s municipalities; those with incomes up to $35,000 cannot afford to rent anywhere in state
Rising housing prices made fewer communities affordable to Rhode Island’s workforce in 2005, according to a new study from HousingWorks RI that will be released today. The “HousingWorks RI 2006 Fact Book” reports that households earning as much as $75,000 – 77.7 percent of total Rhode Island households – can afford to buy the median-priced single family home in only three of the state’s cities and towns.
“While there were some rays of hope in 2005, the crisis has to be faced directly with a comprehensive building program. Rhode Island is suffering from a severe housing shortage, and that has serious implications for our economy and our communities,” said Ari Matusiak, acting director of HousingWorks RI, a coalition of more than 100 business, community, faith-based and philanthropic organizations.
Households earning up to $100,000 can afford to buy the median-priced single family home in less than half the state’s cities and towns. In 2005, Cumberland, Glocester, North Smithfield and Richmond dropped off the 2004 ‘affordability index’ for those households (88.6 percent of households). Only 16 towns are still affordable for that income range.
The news was even worse for households earning $75,000 or less, compared to 2004. The number of affordable communities fell by 50 percent. In 2005, only Central Falls, Pawtucket and Providence are affordable as rising housing prices put Warwick, West Warwick and Woonsocket beyond reach.
The new data are contained in the HousingWorks RI 2006 Fact Book, which will be hand delivered today to legislators who are deliberating on the organization’s legislative platform, which includes a $75 million bond issue and continued funding for building affordable apartments for homeless and disabled Rhode Island residents.
One statistic did not change from 2004 to 2005. There is no community in which the median-priced single family home is affordable to households earning up to $50,000.
Renters share worsening housing situation
The 2006 Fact Book offered no relief for renters. Households earning as much as $35,000 cannot afford the average rent for a two-bedroom apartment in any Rhode Island city or town. In fact, renter households fell further behind as the average rent for a two-bedroom apartment hit $1,147 in 2005.
According to the 2006 Fact Book, four of the state’s five most common occupations – clerical, sales, food preparation and manufacturing – earn too little even to afford the average rent for a two-bedroom apartment in the state’s least expensive community – Central Falls. And teachers and librarians make only enough to live in three municipalities: Central Falls, Pawtucket and Smithfield.
“It requires more than three full-time, minimum-wage jobs to pay the rent. Something has to give, and that is going to be food or heat or health care, in many cases,” Matusiak added.
Newport, Middletown, East Greenwich and North Kingstown (in descending order) have the highest rents, requiring incomes over $50,000 to afford the average rent for a two-bedroom apartment.
Little Compton, Jamestown, East Greenwich, Newport and Narragansett (also in descending order) recorded the highest median sale prices for single family homes in 2005, requiring incomes in excess of $135,000. (The Rhode Island Association of Realtors did not report any single family home sales in Block Island in 2004 or 2005.)
Housing crisis threatens state’s well-being
“The meaning of these cold statistics is that Rhode Island is shutting itself off to new workers, returning college graduates, growing businesses, young families and countless others,” concluded Matusiak. “We hope that legislators and, indeed, all Rhode Islanders use the information in the Fact Book to advocate for reviving the American Dream for working Rhode Islanders.”
Matusiak said the good news is that some of the HousingWorks RI-endorsed programs saw success in 2005:
- 281 new affordable apartments and homeownership opportunities were added in communities across Rhode Island, such as Bristol, Cumberland, Lincoln, Providence and West Warwick.
- 29 of 39 municipalities now have local affordable housing plans.
- The state has developed a comprehensive five-year strategic housing plan.
“The bad news is, Rhode Island is still 13,000 homes short of what it needs for a healthy economy,” Matusiak said.
Methodology
Matusiak said the data for the 2006 Fact Book were derived from multiple sources, including the Rhode Island Association of Realtors and Statewide Multiple Listing Service, Rhode Island Housing and the U.S. Department of Housing and Urban Development. He said HousingWorks RI will issue a new Fact Book each May, the soonest the necessary data are available.
HousingWorks RI also maintains www.HousingWorksRI.org, a dynamic website that monitors the “housing affordability gap” in all 39 cities and towns, provides research and includes advice about financing programs, among other features.
