Obstacles to Building Affordable Homes
There are many non-profit and for-profit developers in Rhode Island who know how to build quality long-term affordable homes, but they often face more obstacles to building than market-rate developments. Here’s what holding them back:
Rhode Island's High Cost of Land
Maybe you can afford the structure. What you can’t afford is the land it sits on. Rhode Island land is prohibitively expensive, far above the national average. A finished lot in the Ocean State is 45 percent of the total house price. Nationally, a finished lot costs just 34 percent of the total.
Slow Permitting that Eats Up Profitability
From idea to CO (certificate of occupancy), a developer in Rhode Island can expect to wait two to five years before seeing a return on his or her investment of time and money. Much of that time is spent waiting for permits and approvals. According to an economic study released in 2004 by then-Fleet Bank and Rhode Island Public Expenditures Council, “it takes 2 to 2 1/2 years for approval of a new development” in Rhode Island. And that’s just approval. Then you have to build.