News & Event
By Mary MacDonald - November 16, 2018 4:00 am
Twenty years ago, Jeffrey Kerkhoff opened a floral studio in a narrow backroom of an upholstery business on Broadway, on the west side of Federal Hill in Providence.
The space didn’t have a professional sink. He cleaned emptied flower pots and containers by taking them into the bathroom and washing them in a portable tub that he placed on the toilet.
“It was tiny, and it was cheap rent,” Kerkhoff said. “It was a place to get started and get going, and then I was going to move to a real neighborhood.”
The neighborhood at that time? “It was a dump,” the floral designer said, describing a landscape of prostitutes and derelict buildings, sketchy characters and people trapped in low-rent apartments.
Since he started Jephry Floral Studio, the neighborhoods that make up the West Side of Providence have had an influx of people and new development interest. Some formerly rundown areas are gentrifying, with an influx of new residents of higher incomes. The changes are viewed positively by many residents – who remember when storefronts were vacant or encased in secure plexiglass.
But others who live in the neighborhood, who have low incomes and live in modest or older apartments, are worried that, as rents rise, they will get squeezed out of a neighborhood they like.
A researcher who examined Providence neighborhoods found several with low incomes, including Olneyville and Federal Hill, were experiencing significant gentrification pressure. The study by Fay Strongin for HousingWorks RI at Roger Williams University, defined that as U.S. Census tracts that were low-income in 2000 but which had rapid rent increases over the next 15 years.
It’s happened serially in cities across New England and other parts of the country.
By definition, gentrification is not just revitalization. It includes the displacement, either intentionally or not, of the existing residents of a neighborhood.
What have been the results of that pressure?
In Kerkhoff’s neighborhood alone, “I have to assume there are 100 different versions of [that] story,” he said.
No longer paying less than $250 a month for his business lease, Kerkhoff feels comfortable in a neighborhood that has gained value and esteem.
Today, Jephry Floral Studio occupies all of the former upholsterer’s corner location, with frontage on Broadway. The plexiglass windows and mismatched, cigarette-stained venetian blinds are gone, replaced with new windows, attractive awnings and dramatic lighting.
The old neighborhood hasn’t changed completely. Kerkhoff describes it as a series of micro-climates.
“You can be on one particular block on a street and be golden,” he said. “You can move a block further and have a lot of obnoxious people on their doorstep all summer long, having fights and drinking.”
Kerkhoff views gentrification as “natural and normal,” rather than something to fight.
“[People] don’t want to be evicted,” he said. “They don’t want to lose their apartments because the rent keeps going up. Yes, that’s sad and unfortunate. But if the neighborhood just stayed that way, then physically the structures would continue to decay. Because the landlords, when it’s like that, don’t put any money into them.”
For some, that means the loss of the traditional neighborhood – including the small businesses and corner stores that catered to people with low to modest incomes. For some areas of Providence once known as ethnic or racial enclaves, gentrification meant the loss of traditional culture.
Fox Point, on the East Side of Providence, was once a Cape Verdean neighborhood. Construction of Interstate 195 resulted in the displacement of hundreds of residents. The storefronts of Wickenden Street, which now cater to students and professionals, once were aligned with the needs of working-class immigrants.
Today Fox Point is going through another wave of gentrification, as investors replace two-family structures with buildings of higher densities, aimed at professionals and students at the city’s universities.
‘NO QUICK SOLUTIONS’
In Newport, the city has had slow waves of gentrification, beginning with the conversion from a heavy U.S. Navy presence to tourism. Since the 1980s, climbing real estate values have converted entire neighborhoods. The Point, now a well-tended, historic neighborhood with homes that sell from $500,000 to an excess of $1 million, used to be where families with low incomes and young people lived in apartments cut into the old homes.
In recent years, says Newport Mayor Henry F. Winthrop, the city has had apartments and entire buildings converted into AirBnB rentals, an online platform that attracts more tourists to the city but results in losses of long-term apartments. These investors are often from outside the state, purchasing buildings for the purpose of converting them to short-term rentals, he said.
“We’ve had a number of those. They buy up the apartment building. Next thing you know, those are short-term rentals,” Winthrop said.
As a result of the price escalation and absence of available housing, families with school-age children are leaving the city. Rogers High School, which had more than 1,500 students in the 1970s to ’80s, now has fewer than 700 students, the mayor said.
His own married children have moved outside the city and are starting their families in other Rhode Island towns.
The city has recently empowered its planning department to try to make sure all short-term rentals are registered. But beyond that, there is little the city can do to counter the market forces.
“There are no quick solutions. And the solutions we’re working toward are going to be difficult to implement,” he said, referring to a project that would require the developer to provide rentals appealing to workers who can pay between $1,500 and $2,200 a month.
That city neighborhoods are always in flux is an argument of residents who have lived in the areas long enough to see the changes, and who welcome them.
Those who advocate for public-policy changes to prevent displacement of residents say Providence has an advantage, in that the pace of gentrification is not happening so fast that the city or state can’t respond, compared to cities undergoing more-rapid price escalation, such as Brooklyn, N.Y., or East Palo Alto, Calif.
Everybody agrees that creating more economic opportunity and economic diversity in neighborhoods is good, said Brenda Clement, director of HousingWorks RI. “But how do you do that without displacing existing people?” she said. “Or, how do you raise the income of those existing folks in order to address the needs?”
Rhode Island has a need for housing creation at all income levels, she noted. The group’s 2018 Housing Fact Book found increasing pressure on rental households to be able to afford median rates across the state.
Good, healthy neighborhoods should have a wide variety of options for residents, she said. “So, it’s a full income spectrum, as opposed to just only building for certain categories and certain price points.”
Taino Palermo, program director for community development at RWU, has spoken extensively about gentrification. Revitalization and gentrification both describe renewed interest in a disinvested community, he says.
He recently addressed the West Broadway Neighborhood Association at its invitation, giving a presentation on gentrification.
Investment in communities that have been disinvested is needed, he said. That’s the nuance of gentrification. “We want investment. We want increase in value. We want revitalization, new life, beautification, buildings changing and growing. We want that. The problem is that it is happening at the cost of people, or in lieu of people. It’s hard to have that conversation.”
In several neighborhoods of the West Side, the changes over the past 10 to 15 years are visible, including the security of more people on the street, walking dogs and riding bikes. Abandoned houses have been purchased. People are choosing to move into once-dilapidated structures and fix them up.
The Wedding Cake House, a grand structure on Broadway, has new owners who are working to revitalize it as a nonprofit, with live-work apartments for artists.
Residential Properties Ltd., the state’s largest residential real estate company by volume, recently opened its first offices on the West Side, in a building on Broadway.
A former historic school house on Almy Street, another vacated property, recently reopened with newly modernized apartments.
Seth Zeren, a commercial agent for Armory Properties LLC, moved into Providence about three years ago with his wife, after they were shut out of the sales market in Boston.
Living in that city, even as fairly well-paid professionals, they couldn’t purchase a home, he said. In Providence, they found a neighborhood they liked in the West End and a renovated three-family they could comfortably purchase.
The neighborhood fit their lifestyles. “To be able to live in a neighborhood where we could walk to a coffee shop, where we could bike around town, where we could live with only one car, in an affordable way, and put money aside” was welcomed, he said. The diversity of the neighborhood was also an attraction.
Among his social and work circles, the issue of gentrification is a frequent topic, he says.
“It’s one of those words people use so much, to describe so many things,” he added. “What are we specifically talking about?”
As landlords, Zeren and his wife haven’t increased rents for tenants, although the economics of the neighborhood could have justified that.
“There’s a lot of value, in our view, in having a good neighbor,” he said. The relationship is symbolic of his approach to community development. “It’s about caretaking and gardening. It’s not about … a culture where you knock everything down and try to make as much money as you can.”
LA PLACITA MARKET
In a neighborhood that’s considered part of Federal Hill, a Spanish market is the chief attraction.
La Placita Market sells penny candy for children and shoe polish in a plexiglass case near the front door. Inside, the market has meat pies and chips and other convenience groceries.
Neighborhood residents walk to the Almy Street market past triple-deckers and older apartment buildings that haven’t been renovated, some with sagging porches and detached siding.
Jeremy Brown, 20, lives with his mother in a nearby apartment. He’s between jobs, but based on his last income, when asked if he could afford his own apartment in the neighborhood, said, “Definitely not. Not unless I was working 60 hours a week.”
Manessa Kent lives in an apartment with her boyfriend, a unit they found last spring for $850 a month. The rent includes heat and is a step up from their apartment in Pawtucket.
“My last place was $900 a month,” and included nothing for utilities, she said.
Of the trendy shops and bars that populate the West End and Federal Hill, the 29-year-old laughed: “I don’t care about that,” she said. “I like Seven Stars. They have great gingerbread cookies.”
What attracted them to the apartment was a rent they could afford on their combined income. She’s worried about losing that if her landlord sells the building.
“My landlord is getting up in age,” she said. “And I’m worried about him selling. The reason we live here is because it’s semi-affordable.”
Dashawn Knight, 27, has lived in the neighborhood around La Placita for more than two years.
He knows he’s lucky. He and his girlfriend this year moved into an affordable housing unit that caps their rental payments at 30 percent of their income.
Before that, he moved from apartment to apartment. He’s seen the rents increase, even when the condition of the apartments doesn’t justify it.
In one apartment, the rent increased from $750 to $800 and then $850 over his tenancy, after he put an air conditioner in the window. The landlord initially told him he had forced his electricity bill to climb, so was charging more rent, he said. Then he said his taxes had increased, so he was passing on that charge.
“He said it was in the lease,” Knight said. “It wasn’t.”
FILLING THE GAP
Ensuring a mix of incomes in neighborhoods that are getting outside investment is a priority for several community-development organizations, and for the R.I. Housing & Mortgage Finance Corp.
Several large commercial projects under development in the neighborhoods have made a point to include the perspective of longstanding residents.
Revitalization of housing, when financed with federal low-income tax credits, has been structured to not displace current residents.
R.I. Housing had a hand in several in recent years, including the newly completed Sixty King in Olneyville. The revitalization of the former Imperial Knife Co. factory has created 60 apartments, 54 of which will be income-restricted for at least 30 years.
Barbara Fields, executive director of R.I. Housing, said there is no single solution to the displacement of residents who find themselves priced out of neighborhoods.
Building more housing is one answer. Making sure that Rhode Island has enough federal help to incentivize development of affordable units is another. A bill championed by Sen. Jack Reed, D-R.I., that would increase Rhode Island’s share of the low-income housing tax credits appropriation, has bipartisan support, she said.
The state is among eight in the nation that get the smallest amount of the tax credits, she said, a decision based on population. But Rhode Island has the oldest rental stock in the nation, she said, when accounting for rental properties alone.
“The reality is that, particularly with a 10-year recession, everything ground to a halt,” Fields said, of construction and renovation efforts. “We’re not even back at our 2006 and 2007 levels of building. Part of that is caused by the fact that we’re not building enough. It is one of the pieces of the solution.”
In Olneyville, a senior apartment complex this year changed ownership. The new owners, a development group from California, will rehabilitate Curtis Arms with a $6 million overhaul. They plan to keep the elderly tenants in place, moving them temporarily into unoccupied units as they renovate their existing apartments.
Per the agreement with R.I. Housing, the rents will not increase after the renovation, explained Joe Ouellette, a principal and partner with Standard Communities. The deed restriction will keep that affordable housing in place for 30 years.
“Our focus is acquiring at-risk, affordable housing,” he said. “There is a limited supply for dedicated, affordable housing in most urban markets across the country.”
On Cranston Street, in the West End, a full-service retail grocery store is under construction. Organized as a cooperative, Urban Greens Food Co-op will fill a gap for the surrounding neighborhoods, which lack a full-service, general supermarket. So far, the co-op has about 1,100 members, about half of whom live in the West Side neighborhoods.
For residents of Federal Hill to South Providence, the nearest option in Providence is the Price Rite in Eagle Square, in the Valley neighborhood. Within their own neighborhoods, residents have had to rely on convenience stores or corner markets.
The 8,000-square-foot supermarket will include a 5,000-square-foot retail space for groceries. Mindful of the varying range of incomes of people in the surrounding neighborhoods, the affordability of the products is a priority for co-op organizers, said Philip Trevvett, vice chairman of the board.
“It’s going to be something we actively work on,” he said. “We do want to be accessible for everyone. We are going to have products in each department, where we essentially have zero markup, that creates an affordable staples program.”
In its hiring, the market also plans to reach out to neighborhood residents. It anticipates starting with 12-15 full-time employees, and 10-15 part-timers. Unlike smaller co-op systems, the member-owners are not going to work at the store.
The communities that make up its area market are diverse, he said.
“There are historic African-American communities, those include new or young professionals, immigrants from all over the world, refugees,” he said.
To make its membership affordable, the market has designed owner shares that can be paid over four years. The membership gives the owner a discount on items.
Conversations about being inclusive have driven the development, Trevvett said. “That’s always been a part of the conversation. How to make sure it’s accountable to the members, and the communities.”
Mark Van Noppen is managing director of the Armory Revival Co., a development firm that started renovating homes and former mills on Providence’s West Side and the surrounding area in 1986. He continues to work and live in the area, which he describes as incredibly diverse, both racially and economically. The median income is rising, and homes are being renovated, but the area is not characterized by displacement of deep-rooted groups, he said.
Economic forces, including the classic principle of supply and demand, are at play.
His company, which co-developed the Rising Sun Mills on Valley Street into new housing and commercial space, has been established long enough to weather several economic cycles. In the mid-2000s, as mill conversions came online around Providence, rents dropped dramatically because so many units were introduced to the market.
Now, the supply has moved in the other direction.
“When there is a shortage of supply, rents go up. That’s very clear,” he said. For young people, this is the target neighborhood of Providence, he believes. “Huge increase in demand,” he said, of the past few years.
“Everybody under age 35 wants to live on the West Side,” he said.
And there are still plenty of available properties there for the company and others to renovate to meet the growing demand, he says.
“It took 75 years for the city to fall apart and it is going to take [that long] to put it back together,” he said. “We’re halfway through that.”
Mary MacDonald is a staff writer for the PBN. Contact her at Macdonald@PBN.com.
Courtesy of Providence Business News
Wednesday, November 1, 2017
2200 Southwood Drive, Nashua, NH
We invite you to be a part of the second New England Lead Conference taking place on Wednesday, November 1, 2017 in Nashua, NH. Hosted by the New England Lead Coordinating Committee, the conference will include a variety of educational sessions focusing on lead prevention, policy, model programs, outreach, the EPA’s Renovation, Remodeling and Repair Rule (RRP), lead abatement, compliance, and the economics of lead poisoning.
Read more >
October 4, 2017 in Events, Local Interest
The Narragansett Times: Dziobek steps down as Welcome House director
By KENDRA GRAVELLE Sep 29, 2017
SOUTH KINGSTOWN—When Joseph Dziobek accepted the position of executive director of Welcome House of South County nearly three years ago, he had expected the job would make for a simple transition into retirement.
But what was intended as a part-time gig turned into much more than that for Dziobek, who this week left his post.
“It’s been a challenge,” said Dziobek, whose last day on the job was Monday. “And it’s been very satisfying—I feel very close to the people who have been a part of it.”
Dziobek, 66, took the job at Welcome House after retiring from his career as CEO of Fellowship Health Resources. He said he intended only to stay for two or three years.
October 4, 2017 in Local Interest
Final Days to Register: 2017 Housing Fact Book Release
Date: Wednesday, October 11, 2017
Luncheon: 12:00pm - 1:30pm
Location: Rhode Island Convention Center, 1 Sabin Street, Providence RI
October 3, 2017 in Events, Local Interest
Rhode Island College: The Defamation Experience
Monday, October 30, 2017
5:00PM - Doors Open
6:00PM - Performance
SPONSORED BY: THE DIVISION OF COMMUNITY EQUITY AND DIVERSITY AND THE DIVISION OF STUDENT SUCCESS
THE PLAY * THE DELIBERATION * THE DISCUSSION
September 27, 2017 in Events, Local Interest
NLIHC: Sign Letters to Support Equitable Housing Recovery after Devastating Hurricanes
Help ensure that low income people and neighborhoods are treated fairly after Hurricanes Harvey, Irma, and Maria. A broad coalition of national, state, and local organizations is calling on Congress, FEMA, and HUD to ensure that the federal response to Hurricanes Harvey, Irma, and Maria is complete and equitable for everyone, especially families and individuals with the lowest incomes who are often the hardest hit by disasters and have the fewest resources to recover afterwards.
September 27, 2017 in Local Interest, National News
Roger Williams University: Social Justice Month Events
Thursday, Oct 19
Mary Tefft White Center
How Housing Works
4:00pm – 6:00pm
Sponsored by Housing Works RI and RWU Chief Diversity Officer
Keywords: socioeconomic status, race, jobs, housing, equity
Workshop with Brenda Clement, Director of Housing Works Rhode Island and Ame Lambert, RWU Chief Diversity Officer.
An overview of housing issues in Rhode Island and connections to the larger social justice agenda.
September 25, 2017 in Local Interest
Providence Journal: People on the move for the week of Sept. 17
Posted Sep 13, 2017 at 5:34 PM
Updated Sep 13, 2017 at 5:34 PM
Rhode Island LISC
Rhode Island Local Initiatives Support Corportation has welcomed two new employees. Jeremiah O’Grady, of Lincoln, joined LISC as program officer after spending more than 12 years at ONE Neighborhood Builders as real estate project manager and director of asset management and operations.
Liz Klinkenberg, of Warwick, was hired as communications director. She brings more than 15 years of public relations experience to her new position, including work for The Miami Herald and The Providence Journal.
The Providence American: Reed Announces $300k in Community Development Grants for NeighborWorks Affiliates
WASHINGTON, DC – In an effort to promote healthy, vibrant neighborhoods across Rhode Island, U.S. Senator Jack Reed today announced an additional $300,000 in federal funding for three Rhode Island-based affiliates of NeighborWorks America (NeighborWorks). These federal funds will help NeighborWorks Blackstone River Valley, ONE Neighborhood Builders, and West Elmwood Housing Development Corporation to provide affordable housing opportunities, generate job growth, and enhance economic stability for working families. Earlier this year, Senator Reed also helped to secure over $750,000 in federal funding for NeighborWorks affiliates in Rhode Island, bringing total NeighborWorks investment in the state to above $1 million for fiscal year 2017.
September 21, 2017 in Federal News, Local Interest
The Providence American: Providence Unveils PVD Gives Donation Station
PROVIDENCE, RI – Mayor Jorge O. Elorza today joined members of the City Council, public safety officials, and community leaders who have been named to the PVD Gives commission for the unveiling of the City’s first Donation Station at Kennedy Plaza. The retrofitted parking meter is one of ten stations that will be installed across the city to collect funds that will support local organizations that provide housing and services to those in need.
“PVD Gives and the new Donation Stations make it easier to give back,” said Mayor Jorge Elorza. “Our collective generosity can make all the difference in the lives of those striving to get back on their feet. I encourage visitors and residents to chip in and be part of the solution.”
September 21, 2017 in Local Interest
Providence Journal: Report: New England losing 65 acres of forestland per day
By Steve LeBlanc / Associated Press
Posted Sep 19, 2017 at 11:21 AM
Updated Sep 19, 2017 at 11:21 AM
BOSTON — New England has been losing forestland to development at a rate of 65 acres per day — a loss that comes at a time when public funding for preservation of open land, both state and federal, has also been on the decline in all six states.
That’s the conclusion of a report released Tuesday by the Harvard Forest, a research institute of Harvard University.
The study found public funding for land conservation in New England dropped by half between 2008 and 2014 to $62 million per year, slightly lower than 2004 levels.
By Mary MacDonald | April 27, 2018 6:30 am
R.I. Housing and Mortgage Finance Corp. is celebrating its 45th anniversary this year in a position of financial strength, says Executive Director Barbara Fields.
It has created programs to assist first-time homeowners, expanded its servicing of mortgages to include those generated by MaineHousing and emerged from the Great Recession with a surplus of financial assets.
But it is working against a backdrop of unaffordability. Half of all renters and 30 percent of homeowners in Rhode Island are housing-cost burdened, paying more than 30 percent of their take-home income on rent and utilities.
Fields has been executive director of the quasi-public agency since January 2015. She previously was the New England regional administrator for the U.S. Department of Housing and Urban Development and the director of the Local Initiatives Support Corp. in Providence.
What’s the best way for Rhode Island to increase access to affordable housing?
“Build, build, build,” she said.
How has the mission of R.I. Housing changed over the past 45 years? R.I. Housing was established by the General Assembly in 1973 as a public corporation of the state. We have an independent existence from the state, although they exercise a central control over our board. Our primary purpose was to encourage investment of private funds for the development of housing for low- and moderate-income persons, and to function as a source of capital for affordable-housing development. We were basically set up to be the state’s housing bank at a time when many other states were doing this. Today, there are 53 housing finance agencies [nationally].
Within Rhode Island, what is your share of home loan origination? Last year, we did 13 percent of the mortgages in the state. Origination … is only 15 percent of our business. Eighty-five percent of our business comes from working with 40 brokers and lenders and we consider them, obviously, critical and important partners. The No. 1 is [Coastway Community Bank]. They help bring us business. Housing is economic development. We help support local businesses. … Also, we were set up to bring private money in to help people get into home ownership. We go to Wall Street and float taxable and tax-exempt bonds, both for single-family and multifamily.
Since the [Great Recession], what has changed in our business is we also sell in the secondary market. We get a warehouse line of credit. We work with three or four banks. We purchase the mortgages and when we get enough, we bundle them and we sell them in the secondary market as securitized mortgages.
What’s the benefit of doing that? The interest rates have been extremely low. There are key Rhode Island officials … who got their first mortgages at RIHousing. [Former Auditor General] Ernie Almonte in 1982 or 1983 bought [his] first house. The rates were 15-16 percent and we could get you 12 [percent]. We forget. In a video on our website he stands in front of his first house. That speaks to what our major focus and mission is. People who are early in their career, buying a home and setting roots in the community. Last year was a banner year. We did almost 1,800 mortgages. The average age of someone who got a mortgage through RIHousing last year was 37.
Is there any focus this year for the organization? Rental apartments for working families, working individuals and a lot more seniors. We have a growing senior population. … [Recently], we got the first-ever Capital Magnet Fund. We got one of the largest in the country. It’s from the U.S. Department of Treasury. It’s $4.7 million and it will help us on a key focus. … We run a lot of federal programs on behalf of the state. One of them is the federal low-income housing tax credit. … There are two sets of credits. One is a deeper subsidy, called the 9 percent. It’s highly competitive. We’re doing as much as we possibly can with what we get. The other, which is a shallower subsidy [of 4 percent] that has to be used with our first mortgage, that is limited by the state’s bond capacity. We are not tapped out, and we would love to do more of those deals. And produce more rental housing and preserve housing that exists. [With] that Capital Magnet, we’ll be able to fill that hole, between the 4 percent and the 9 percent.
What is the profile of your mortgage borrower? The average household income for the homeowners we served last year was … about $66,000 to $67,000. That’s teachers who may be in for a few years, certified accountants, nursing assistants, construction workers. This is the heart and soul of what makes up our middle class. And the average sale price was just under $200,000. And I’m proud of the fact that 27 percent of our mortgages are reaching the minority community. We’re seeing rising prices, so some of that rise is good, it means our economy is getting better. … One of the challenges is … just having more housing built in the state.
You’ve touched on the lack of inventory in single-family homes. What is the solution? How do we get more inventory? Build, build, build.
How? There are different pieces. Some of them we’re beginning to explore: if there are zoning challenges and communities that aren’t interested. Personally, I’ve been going around the state for the past year. I’ve been in Barrington, Middletown, Cumberland, talking to mayors, city councilors and town councils. I would have to say, by and large, they are welcoming. Everyone at this point has a story to tell. It’s either my son won’t leave the house, [or] soon it will be my mother won’t leave the house. Or my sister-in-law’s godchild and her fiancé are looking for a house, and they can’t find it. Seniors are staying longer in their homes. They’re living longer and are in better health. That’s not freeing [housing] up.
If there is an understanding of what the issue is, why aren’t more towns creating zoning to allow more density? I think South Kingstown just did some [rezoning] along Route 1. As I say to the communities, think about your community. I’ve been out with two mayors now, I’m about to go with a third, [and I say] drive me around your city, your town, and tell me, where do you want development? Because it is likely to come, and wouldn’t you want to proactively direct it to those places? In South Kingstown, they started talking about some properties that they knew.
There is always going to be some NIMBY-ism [or “not in my backyard”], but we have not had that raised as a major issue. We’re now funding our second project in Barrington. … We have done one now in Shannock Village, in Charlestown. These are apartments for families, most earning between $30,000 and $50,000 a year. Anyone can apply. But mostly you get people from your community. When we run the numbers in these communities, usually you find 20 percent of current residents would be eligible. … The most important thing to understand is there isn’t one type of housing that we advocate for. We have high-rise buildings. We have single-family homes being built. We have duplexes. We have ground-floor retail and townhouses.
So, people may have a visual that pops into their head when they think of affordable housing. They don’t want it developed in their community because they think it’s going to be ugly? We’re smarter about how to build [today]. We think about housing as part of the community, and community is the economic life of the state. I’m a community-development person coming into housing, so I am always thinking about the connection. We always look when we are financing multifamily rental, where are the parks, where’s the bus line, where do you shop for groceries? What is it that makes a community?
People still assume millennials are living in the basement with their parents. But they’re out there buying now, they are the starter-home market. You have a variety of mortgage programs, including down-payment assistance. But they’re running into an inventory problem. Are the state’s demographics part of the problem? It’s a variety of factors. You have millennials who are now ready to buy. You have a tremendous change in the economy. We went from the second-worst unemployment rate in the country to one of the lowest. We did a 10-year study. Even if the population grows slowly, we projected it would grow at 5 percent [over 10 years]. Households will grow at 12-13 percent. People are waiting longer to marry. You have a lot of singles, or two people in a house without a child until later. So, people need more houses. People are divorcing. You have more households being created by all of these factors. Especially if you go back and see what was going on 30 years ago. The average size in public housing is smaller. Occasionally we will see a proposal come in with a four-bedroom unit or a five-bedroom unit. But we are building one, two and three [bedrooms].
There is some pushback in Providence that the new housing being constructed is primarily downtown housing not designed to accommodate families, who also need housing. Does Rhode Island need more small apartments? A healthy rental market has about a 6.5-7.5 percent rental vacancy rate, so you have turnover, you have empty units for people to come and look at. The nation is below that. Rhode Island dropped last year … to under 4 percent. And Providence is lower than the state. Providence is about 2 percent. So, we need rental apartments, as well as owner-occupied apartments. We’re in a niche, but it’s needed across the income ranges. Part of what’s increased the demand here also is people coming from the Boston area. This is an attractive place to live.
In Massachusetts, a state law called 40B seems to have more strength in getting affordable housing built in individual towns. (The law allows developers to bypass local zoning in towns or cities that have less than 10 percent of the housing stock available at affordable prices.) What is the challenge for Rhode Island’s affordable-housing requirement? FortyB has a lot more teeth. I would say, yes, we have a 10 percent law. … A [state] commission is looking at how to make it stronger.
Do you think it needs to be made stronger, to distribute affordable housing? Yes, I believe so. When you sit down and talk to a community about who would live in the housing you’re talking about, it becomes a very different story. Up here, it’s like numbers, ideas and images. Down here, it’s “Oh, it’s my best friend. It’s my brother-in-law.”
There are many Rhode Islanders who earn less than the state median, as well. I don’t care what your job is. No one makes in their first five years what they might later. We want to accommodate that. I’m sure Ernie Almonte’s salary is different today than it was 25 years ago, when we helped him buy his first house. But that was a good investment to make. It wasn’t a giveaway.
Some activist groups have recommended rent control in Providence, to dampen price escalation. Is rent control an option? My preference is to build. Supply is the approach now being done in Boston. If we can increase the supply, it helps to moderate the prices. We are also involved in several efforts to make sure we maintain the affordable units that we have, that work for people at the lowest income levels. We are very committed to preservation, whether it’s senior units or family housing. We need to preserve what we have. A lot of the housing we’re preserving is 30 years old.
Some community advocates in Providence think city incentives via tax-stabilization agreements should not be used on luxury housing. The Fane Organization tower could be the next argument over this. Should public incentives be used for luxury product? I would just say the TSA process needs to be predictable. No matter what program we run, people want predictability. In Providence, TSAs are needed so we have predictability. If you meet these requirements, you can come in.
Sen. Howard Metts, D-Providence, has raised the issue of discrimination against Section 8 tenants, that the people who hold the vouchers are having trouble finding apartments. He has proposed a law that would prevent landlords from using the source of income as a reason to block a lease. Is this an issue? Absolutely. Thirteen states have that law, including four New England states. We’re supportive of [his proposal].
Gov. Gina M. Raimondo has proposed a transfer to the state of $5 million from R.I. Housing in fiscal 2019. Can the state “scoop” your funds? The board will have to vote on it. We’re going to minimize the impact. It will have an impact, obviously, but we’re going to minimize it. This came up in January. We know the budget will be made by the end of June.
Why did you agree to do it? The governor controls the board and we’re part of the team. Someone talked to the chairman. It’s not an optimal situation. But we’re going to minimize it. We get rated by the bond-rating agencies and we’re talking with them. They will take a look at our rating. But we happen to be in a strong position.
According to your most recent annual audit, your loan-loss contribution fell dramatically in fiscal 2017. What is the story behind that? The market is doing better. People are doing better. We had tremendous losses during the recession, now we’re on a different path. We hope it continues.
The same audit indicated that the three-month delinquencies on R.I. Housing mortgages rose between 2016 and 2017. What is the reason for that? We had a slight uptick, but we are on top of it. We are below nationwide and below New England. We have new metrics we’re following and are working with our 40 brokers and lenders. We look at people’s credit scores and we look at their ratios. We meet, we want [the Federal Housing Administration] to purchase our mortgages, FHA and Fannie Mae. We have some flexibility. We instituted a credit score to raise it a little, to make sure we’re in line with the rest of the New England states.
Some people think homeownership shouldn’t necessarily be identified as a dream for everyone. That maybe we shouldn’t be encouraging homeownership. Do you have any thoughts on that? We should always have a range of housing options. … There are people who need a homeownership opportunity, they’ve saved for years. It may be a single-family, a townhouse, a condominium. We need rental opportunities. Seniors who owned a home who need a rental opportunity. Supportive opportunities, say veterans, where there are services on-site for them. And we also work on properties where we have the vouchers. Every community needs to think, at different points in people’s lives … there are different reasons why people choose types of housing.
Pleased by the favorable reception the Planning Board gave the Cherry Hill Lane affordable housing development on May 9, the members of the Block Island Housing Board turned toward implementing that project and others at their May 15 meeting.
“We were thrilled with the Planning Board's support, and look forward to their decision,” Housing Board Chair Cindy Pappas said. The five-home subdivision off Cooneymus Road has been the target of neighbors' objections throughout the permitting process.
Once the Planning Board issues a decision — expected at its June meeting — the next pending issue will be preparing Requests for Proposals for construction, Pappas told the Housing Board. She added that Town Manager Ed Roberge has volunteered to help, drawing on his expertise in developing RFPs.
An infrastructure RFP comes first, and will include the access road, drainage and septic systems, wells, water lines and other underground utilities.
“We know the road standards,” Pappas continued, referring to engineering protocols for the right of way that will serve the new homes and provide a throughway to abutting properties. The septic system design is done and awaiting approval by the state. Member John Spier advised including the final landscaping in the infrastructure RFP, to ensure that the first site work will not have to be redone at the end. Landscape design has been one of the sticking points with the abutting property owners.
Whether the new homes will use modular or stick-built construction is also yet to be determined. Pappas said she will follow up with a modular home builder in Connecticut, and Spier said he will keep in contact with the project's architect, Frank Karpowicz.
Consulting on Merck project
The Housing Board is working with island property owner Josie Merck on the sale of two existing homes, converting them to affordable housing units in the process. Kim Gaffett represented Merck at the meeting to discuss agreements and covenants that will apply to those homes. The homes will be occupied by the current tenants.
“It's well in Joe [Priestley]'s hands,” Gaffett said, referring to Merck's attorney; “he has all the templates.” Gaffett said some “site-specific” conditions may be added, such as limiting mowing of open space and agreements to share maintenance costs of a well and an access road.
Other provisions could establish precedents for future affordable housing projects on the island: Requiring a homeowners' association be created — even for a two-unit development — with a member of the Housing Board serving as an “arbitrator” between the owners, in Spier's phrase; and allowing the owners' children to inherit the property, with the original covenants and conditions continuing to apply.
“We will say the kids can inherit unless told otherwise,” said Gaffett.
Pappas replied that while the Housing Board hasn't taken a position on inheritance policies, “The point is to keep the house in the affordable pool in perpetuity.”
“That's what we're striving for,” Gaffett said. “We're still optimistic that the details will all work out.” Merck's proposal will go before the Planning Board in June.
The Housing Board commented briefly on two other housing matters. Spier said of a parcel recently acquired from the Ball-O'Brien families, “We'll decide what we want to do, and then find out what we can do.”
Pappas replied that she was “still hoping for a mix of homeownership and rental housing” on that parcel, which is adjacent to the E. Searles Ball rental apartments on West Side Road. Spier noted that “homeownership tends to produce a better neighborhood than just rental.”
Pappas also reported that Town Manager Roberge had recently convened a meeting to talk about housing. “Obviously, the town is very interested in housing issues,” she said, noting the vote at the Financial Town Meeting to issue bonds to construct housing for town employees on the Thomas property across High Street from the Block Island School.
However, the Thomas property is not an affordable housing project as described now, she said.
Courtesy of The Block Island Times
It’s generally understood that rising housing costs, and a shortage of new units, have contributed to an affordable housing crisis in the United States. New research by economists at Apartment List have found that inequality has also been rising, with those struggling to afford rent tending to pay a much greater share of their income than wealthier Americans.
Overall, the bottom 10 percent of the income distribution has seen the steepest rise in costs since 1980, while the top 25 percent of earners have actually see a decline in housing costs. Renters, at all income levels, are spending a great share of their income on rent than they did in 1980, while homeowners are paying a smaller fraction of their monthly paycheck for housing.
This phenomenon isn’t limited to pricy big cities or part of coastal California. Researcher Igor Popov found that housing for the bottom half of income distribution grew more than those on the top half in every single one of the top 100 metro areas across the U.S. In 45 of the 50 largest U.S. cities, income inequality grew.
One of the main drivers for this increasing disparity is the similarity in rent and housing costs along large stretches of the income divide. Put another way, lower- and middle-income Americans tend to have similar housing costs, despite varying paychecks, exacerbating the financial stress on low-income Americans and highlighting the human cost of our affordable housing shortage.
Apartment List researchers found that those in the lowest quartile of income make 27 percent of the median household, yet they still need to pay 79 percent of what the median household pays in rent. Despite making a fraction of the income, they still have a somewhat similar housing burden.
Two large trends are at play. In the rental market, an influx of high-end rental properties, feeding an increased population of high-end renters, has contributed to higher costs, especially in supply-constrained cities. The median renter pays 23 percent more than he or she did in 1980. At the same time, for homeowners, lower mortgage rates and the ability to refinance have countered the rise in prices, leading to a relative decrease in their monthly mortgage payment.
Again, this income is widespread. Median homeowner income is higher than that of the median renter in every one of the top 100 U.S. metros, and double that of renters in 55 markets. The advantage gained by homeowners, from mortgage-interest tax deductions to refinancing, is exacerbating the housing divide.
Housing affordability has emerged as a potent campaign issue among contenders for the Democratic nomination as part of a wider discussion about equity in the economy. According to Popov, author of the study, as rising housing costs take up more of the monthly income of low income Americans, they have less capital to invest, save or take risks while those higher up the income ladder, due to lowering housing burdens, become that much more advantaged.
Courtesy of Curbed
(Note: Over the last few weeks WhatsUpNewp has been exploring affordable housing issues. Last Friday, HousingWorksRI released its annual Fact Book, providing a detailed look at how the state and its municipalities are addressing affordable housing issues. To view our stories and podcast in this series, visit Affordable Housing. Meanwhile, we’ll be continuing our affordable housing series in the upcoming weeks.)
Businesses and communities benefit when there’s adequate affordable housing for moderate- and low-income individuals and families, a message that affordable housing advocates believe will begin to get those who typically have ignored the issue, to begin taking it seriously.
“A policy window is opening,” said Dr. Tiffany Manuel, a housing advocate, speaking at the HousingWorksRI luncheon at which the organization unveiled its 2018 Housing Fact Book. “Nationally we have a moment. How do I make them care? Why it’s important. Why it makes us better.”
Her premise is to equate affordable housing with economic development.
It’s an approach that is well documented on various websites that not only show the jobs created by construction but the number of employees that would be served by an increase in affordable housing.
Manuel’s comments came on the day that HousingWorksRI unveiled findings that only reinforced Manuel’s characterization of the “severity of the housing crisis.”
According to HousingWorksRI households at or below the state’s median household income of $58,387 could only afford to buy single-family homes in two (Central Falls and Providence) of Rhode Island’s 39 municipalities.
Only six municipalities (up from five last year) have reached the mandated 10 percent of affordable housing, legislation that was adopted nearly three decades ago. Burrillville became the sixth community reaching the threshold, joining Central Falls, Newport, New Shoreham (Block Island), Providence, and Woonsocket.
The state law requires municipalities to “ensure a minimal number (10 percent) of quality, affordable homes are available to low- and moderate-income Rhode Islanders for a minimum of 30 years,” according to HousingWorks RI.
The lack of affordable housing is reflected upon the number of Rhode Islanders struggling to meet mortgage payments or rent.
“The continuous climb in the cost of housing and lack of new homes has left more than 145,000 Rhode Island households, or 35 percent of all households, cost-burdened, meaning they spend more than 30 percent of their income on housing costs,” according to the Fact Book. Some 44 percent of the 145,000 households that are cost burdened are considered “severely cost burdened,” spending more than 50 percent of their income on housing costs.
Some other of HousingWorks key findings:
Manuel emphasized the importance of federal, state, and municipalities of addressing affordable housing issues as a way of fueling the economy, good for businesses and communities. Here’s what some others say:
Courtesy of WhatsUpNewp
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