Foreclosure crisis seen as worsening in Providence

Published on May 26, 2010

Channel 10 recently did a story on the worsening foreclosure crisis in Providence.

The current crisis has been blamed on subprime mortgages, weak economic conditions, and predatory lending. But what about the interplay of these factors with the rampant appreciation of homes in the state during the first half of the decade and the low wages of many of Rhode Island's working people?

In February, HousingWorks RI published a special report about the foreclosure crisis in Rhode Island. Specifically the report examined the link between the state's severe shortage of affordable homes and the current foreclosure quagmire. The report concluded that the severe shortage of workforce housing and rapid appreciation of home prices for much of the past decade in Rhode Island only exacerbated our foreclosure crisis. Indeed, an inadequate supply of affordable homes is part of the formula for housing and market instability.

Moreover, there is strong evidence that quality affordable homes directly contribute to increased municipal revenues, vibrant local economies and a more attractive business climate; to new and stable jobs, safer neighborhoods, healthy people, and children who succeed at school and in life.

The economic and foreclosure crises in Rhode Island have highlighted the importance of having a full continuum of affordable homes as part of the state's economic strategy and safety net. If Rhode Island is to revive its economy, policymakers need to invest in strategies that will ensure a long-term supply of homes that are affordable to our workforce.