2010 Fact Book: Green Affordable Housing Development in RI- Saving Money, Creating Jobs

Published on August 31, 2010

Affordable housing development is going green and is helping to strengthen the state’s economy according to HousingWorks RI’s 2010 Fact Book on housing. The 2010 Fact Book examines the current state and future opportunities in the development of affordable homes in Rhode Island. Affordable homes are being built with green features and technologies that are also contributing to the growth of the green economy and jobs in the building trades.

“The 2010 Fact Book suggests that the development and rehabilitation of affordable homes in the Ocean State is helping to grow a greener economy,” said Nellie M. Gorbea, Executive Director of HousingWorks RI. “There is a lot of attention nowadays on the growth of the green economy in our state. Our research shows how incorporating sustainable design into affordable home development is creating a demand for green technologies and supporting job growth in construction and specifically, in the green trades.”

HousingWorks RI released the Fact Book to over 100 business leaders and policymakers at a breakfast event this morning. The event featured a panel discussion with Laurie White, President, Greater Providence Chamber of Commerce; Keith Stokes, Executive Director, Rhode Island Economic Development Corporation; Donald Powers, President/Principal, Donald Powers Architects; and Madeline Fraser Cook, Program Director, LISC Green Development Center. The panel discussed the importance of having a full continuum of affordable homes as part of the state’s economic development strategy.

“Affordable housing is key to attracting and retaining businesses and employees,” said White. “Having an adequate supply of affordable homes ensures that Rhode Island remains a competitive place to live and work. What’s more, incorporating green technologies in the development of affordable homes will attract new green tech businesses to the state. If we build the market, they will come.”

The event featured a short video that highlighted the success of Building Homes Rhode Island (BHRI), the state program established to disburse the $50 million housing bond approved by voters in 2006. To date, the program has funded 828 homes in 28 communities. Construction activity supported by BHRI has accounted for 48 percent of the total estimated cost of residential construction permitted in Rhode Island from 2007 to 2009. BHRI’s investment to date has also supported nearly 4,600 jobs in Rhode Island, generating $224 million in wages—money that workers use to purchase local goods and services and contribute to municipal and state economies. BHRI is set to expire in fiscal year 2011.

As with years past, the 2010 Fact Book includes annual housing affordability data for each city and town in Rhode Island. Both the unprecedented run-up in housing prices in the first half of the decade and the foreclosure crisis in the second half has made finding a quality, affordable home still difficult for many Rhode Islanders.

“Homes in Rhode Island appear on the surface to be more affordable, but the reality for many Rhode Islanders is that a tighter credit market and stricter down-payment requirements make owning a home unattainable,” said Barbara Silvis, Board Chair for HousingWorks RI. “For renters, the situation is still bleak. The Fact Book provides data showing how rents are also squeezing the monthly budget of many residents.”

Specifically, the Fact Book shows how rents significantly increased during housing-bubble years, but did not decrease when housing prices came down. Today, the average cost of rent for a two-bedroom apartment in Rhode Island is $1,120, an increase of $350 from 2001 rent prices (or 45%). The result is rental price/wage gap for many Rhode Island households.

The Fact Book also finds that:

o In the second quarter of 2010, a household earning the state’s median household income of $55,701 would only be able to afford a median-priced single-family home in 12 of R.I.’s 39 cities and towns

o Rhode Island continues to rank as the state with the highest rate of foreclosures in New England, with over 14,000 mortgages either in the foreclosure process or more than 90 days delinquent during the first quarter of 2010.

o More than 8,000 prime mortgage holders were either in foreclosure or on the verge of foreclosure during the first quarter of 2010, an increase of 41 percent from a year before.

o In its first three years, Building Homes Rhode Island has funded 828 homes in 28 communities. The program is set to expire in fiscal year 2011.

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