News & Event
The 2018 RI Kids Count Factbook, released on Monday, is fascinating. It provides a window into the lives of Rhode Island’s children, and it also offers some peripheral data that contextualizes how the state’s youngest residents are raised.
A portion of the Factbook involves housing security and the economic well-being of the family unit. According to the Factbook, in 2017, the average rent for a two-bedroom apartment in Rhode Island was $1,385 — a $100 increase over the previous year. In order to live without a cost burden — when more than 30 percent of a family’s income is spent on housing — a worker must earn $26.63 an hour, at forty hours a week, to be able to afford that monthly rent. Last year’s minimum wage in Rhode Island was $9.60.
Some towns, to be sure, are more affordable than others. Foster, Glocester, Exeter, Richmond, West Greenwich and — believe it or not — Little Compton all average $944 per month in rent for a two-bedroom apartment. Topping the list in monthly rent is Jamestown at $1,932 per month for a two-bedroom apartment — a cost surely driven by seasonal rental rates. Providence comes in at $1,357 per month.
Perhaps the starkest data show how unattainable certain communities are to low-income families. If a poverty-level family (bringing in $20,420 per year) wants to live in Barrington for the schools, for example, they would have to fork over a whopping 92 percent of their income to rent and 100 percent of their income to a mortgage.
The whole Factbook, with stats on the health, safety, education and community of Rhode Island children, is worth a read. Click here for more.
Courtesy of Rhode Island Monthly
“We need our state elected officials to demonstrate bold leadership by investing more state resources in affordable housing, not less, to ensure that all Rhode Islanders have a safe, decent place they can afford to call home,” said Melina Lodge, executive director of the Housing Network of RI. The Housing Network is the professional association of the state’s non-profit housing developers.
Courtesy of Providence Journal
Posted on March 28, 2019, at 10:59 a.m. ET
It’s hard to remember the last time affordable rents received consistent national attention, but the tide is finally turning. In recent months, prominent presidential contenders — Kamala Harris, Cory Booker, and Elizabeth Warren — have proposed ambitious solutions, and are speaking substantively about the issue on the campaign trail. They shouldn’t be alone in this: According to the numbers, all 2020 presidential hopefuls would be wise to make it a top-tier priority.
The vast majority of the public — a full 85% — believe that ensuring everyone has a safe, decent, affordable place to live should be a “top national priority,” according to a recent national poll commissioned by the Opportunity Starts at Home campaign. This view is strong across the political spectrum — from 95% of Democrats to 87% of independents and 73% of Republicans. Eight in ten people also say that both the President and Congress should “take major action” to make housing more affordable for low-income households.
Those aren’t the only eye-opening figures. The poll showed 60% say housing affordability is a serious problem where they live, which is up an astounding 21 points since 2016 — and that includes majorities in cities, suburbs, and rural areas. And 61% of people reported having to make at least one sacrifice in the past three years because they were struggling with housing costs, such as cutting back on learning activities for their child, nutritious food, or health care.
Those people aren’t imagining things: The affordability crisis has indeed reached historic heights, and the data is shocking. Since 1960, renters’ incomes have increased by only 5% while rents have risen 61%. Out of over 3,000 counties in the nation, there are only 22 where a full-time worker earning minimum wage can afford a modest one-bedroom rental, and there are no counties where they can afford a modest two-bedroom. Nationally, there are only 37 available and affordable homes for every 100 extremely low-income renter households. When it comes to being able to pay your rent in America, hard work simply isn’t enough anymore.
People are feeling the squeeze, and they are expecting solutions. Eighty-two percent of the public thinks it’s important for elected leaders to address housing affordability, and 83% agree that elected officials aren’t paying enough attention to the cost of housing and the need for more affordable housing. And 76% said they are more likely to vote for candidates who have detailed plans for making housing more affordable.
Strong majorities, on a bipartisan basis, support concrete policy solutions, such as expanding funding for rental assistance, ensuring assisted families with young children can live in safe neighborhoods with good schools and job prospects, giving renters a tax break like homeowners currently get, expanding investments in housing development programs, and providing emergency crisis assistance to the lowest income households to help cover rent.
Opportunity Starts at Home has published a playbook for policymakers who want to work on this. The campaign has called for a major expansion of rental assistance through vouchers or a tax credit and substantial investments in the national Housing Trust Fund to increase the supply of housing affordable to the lowest-income people. It has also proposed creating a National Housing Stabilization Fund that would provide emergency financial assistance to ensure housing stability and prevent homelessness for poor households experiencing an unexpected economic hardship, such as a job loss or medical issues.
All 2020 presidential hopefuls should prioritize housing affordability and, if they have not done so already, develop a serious plan to solve the problem. The public, without question, is giving them an unprecedented mandate for action. And in addition to being good politics, it’s also smart policy. When people have stable affordable homes, they’re healthier; they’re more likely to escape poverty and climb the income ladder; they can more readily access areas with greater career opportunities, which, in turn, helps drive economic growth; they’re less hungry; and their kids perform better in school.
At a time when Republicans and Democrats can’t agree on much of anything, the issue of housing affordability can be a much-needed unifier. People from all walks of life are increasingly concerned about the lack of housing they can afford; they know it most negatively impacts low-income people; they see how it spills over into other areas of life; and they are looking for an energetic response from the federal government.
Mike Koprowski is the national director of the Opportunity Starts at Home campaign, chaired by the National Low Income Housing Coalition.
Courtesy of BuzzFeed News
Tuesday, July 17, 2018
GoLocalProv News Team
Providence is ranked as one of the worst cities in the country for first-time home buyers.
According to a recent study completed by WalletHub, Providence is ranked as the 8th worst midsize city for first time home buyers.
Overall, Providence is ranked 267th out of 300 ranked cities.
As GoLocal reported Saturday, on the East Side of Providence, in particular, home values are skyrocketing, with houses that only a few years ago were worth $400,000 or $500,000 are now selling for a million dollars or more.
Houses go on the market and within a week there are more than a dozen offers meeting or exceeding the asking price — often by cash buyers.
Sally Lapides, President and CEO of Residential Properties, Ltd., says the combination of older people looking to downsize and Providence’s appeal as a city are fueling the boom. Buyers are more and more New York transplants or Boston commuters.
The issue is also helping to drive rents higher and higher.
“Buying a home for the first time is an exciting and important milestone for many Americans. Their purchases make up a sizable chunk of the market, too. In 2017, 38% of all U.S. single-family home purchases were made by first-time buyers,” said WalletHub.
Providence is ranked directly behind Corpus Christi, Texas and New Orleans, Louisiana, who rank 265th and 266th respectively.
Providence ranks ahead of Santa Ana, California and Houston, Texas, who rank 268th and 269th respectively.
Broken Arrow, Oklahoma is ranked as the best city for first time home buyers.
Berkeley, California is ranked as the worst city.
To determine the most favorable housing markets for first-time home buyers, WalletHub compared a sample of 300 U.S. cities (varying in size) across three key dimensions: 1) Affordability, 2) Real-Estate Market and 3) Quality of Life.
They evaluated those dimensions using 27 relevant metrics. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for first-time home buyers.
Finally, they determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank the sample. Each city was categorized according to the following population-size guidelines:
Large cities: More than 300,000 people
Midsize cities: 150,000 to 300,000 people
Small cities: Fewer than 150,000 people
Affordability – Total Points: 33.33
Real-Estate Market – Total Points: 33.33
Quality of Life – Total Points: 33.33
Courtesy of GoLocal Prov
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
Tuesday, July 30, 2019
GoLocalProv Business Team
The implications of growing the American “renter economy” are playing out in Providence.
A new study ranks Providence poorly for rental affordability -- and the implications are significant for Rhode Islanders trying to build wealth.
“One reason this is such an important decision financially is that rental prices have soared over the years, jumping 2.7% in the past year alone. And with demand for affordable housing exceeding supply, more than one-quarter of all renters – 11 million people in total – spend more than 50 percent of their income on housing. They are classified as 'severely cost-burdened' by federal housing agencies as a result," according to WalletHub.
Providence's Apartment Complex
Rhode Island's policy has been to invest heavily in apartments -- higher-priced apartments like the recently opened River House which received more than $10 million in Rebuild incentives, tax breaks from the state and a tax stabilization agreement from the City of Providence. River House is just one of a number of high profile apartment projects to receive millions in incentives and carry rents at $1,500 to $3,000 a month.
Homeownership rates for younger Americans -- Gen-Xers, Millennials and below -- have dramatically fallen since the “Great Recession,” reports the Wall Street Journal.
“The median age of a home buyer is 46, the oldest since the National Association of Realtors began keeping records in 1981. Economists, policymakers and mortgage lenders expect the trend to extend to younger generations. The decline illustrates what for many Americans is the real legacy of the financial crisis,” reported the WSJ.
High Rental Costs in Providence Consume Income
Providence’s rental prices are among the most unaffordable — Providence ranks the 37th most unaffordable city on the list.
And a second study released this month by Zumper finds that a one-bedroom rental in Providence is now $1,430 on average — up two percent month over month.
And a two-bedroom is now $1,580 — up 3.9 percent year over year.
Providence rentals are more expensive than Philadelphia, Orlando, Dallas or even Austin. Further adding to Providence’s rental unaffordability — is the proximity to Boston.
According to Zumper, Boston is the 4th most expensive rental market in the U.S. with one-bedroom rents at $2,450 and two bedrooms rents at $2,840.
Boston workers are living in Providence and commuting to Boston. With Boston salaries, the commuters can rent at a higher price point driving the Providence costs up.
Much of Providence’s new rental product — projects like the recently opened River House - have rents at nearly $2,000 a month. Apartment.com lists rents for the property Studio – 1 Bed $1,895 – $2,240.
Renters Struggle to Build Wealth
The implication of the “renters economy” is the inability to save for a down payment, own a home and build equity.
“Lower homeownership for young adults means lower economic growth,” said Sam Khater, chief economist of mortgage-finance giant Freddie Mac. “That’s it in a nutshell.”
“Millennials aren’t making up for lost home equity in other investments. The median net worth for young families plunged by nearly a third from 2001 to 2016 after adjusting for inflation, according to the Federal Reserve,” reports the WSJ.
One of the factors for homeownership is the wealth of the parents. As an example, a three-bedroom house of the East Side of Providence on Sessions Street near Nathan Bishop Middle School and across from the Brown football stadium is price at $489,000.
A similar 4 bedroom home on Catherine Street in Elmhurst is priced at $359,000.
“Homeownership stability matters. Young adults with stable homeowner parents are most likely to be homeowners. This result is particularly concerning for black families, as the homeownership rate among black households headed by 45-to-64-year-olds (who are most likely to be parents of young adults ages 18 to 34) significantly dropped over the past 15 years,” reports the Urban Institute in a study titled, “Intergenerational Homeownership, The Impact of Parental Homeownership and Wealth on Young Adults.”
“Homeownership rates for young people are near their lowest levels in more than three decades of record-keeping. About 40% of young adults, ages 25 to 34, were homeowners in 2018, according to federal data analyzed by Freddie Mac. That is down from about 48% in 2001, when Gen X-ers were young adults. Some economists calculate the decline is actually even steeper,” reports the WSJ.
Courtesy of GoLocal Prov
Stay in the loop by subscribing to our newsletter!
Newsletter Sign Up
Newsletter Sign Up
One Empire Plaza
Providence, RI 02903
A project of HousingWorks RI