With projections of a need for 35,000 additional affordable housing units over the next decade, voters are being asked to approve a $50 million bond issue next week that will fund building 800 housing units, while rehabilitating numerous others.

affordable-housing4Voters, since 2006, have approved bonds that have resulted in building nearly 2,000 housing units, still leaving the state well short of what’s projected as future needs.

Rhode Island Housing, in a report it issued in April, projected population growth in Rhode Island at about 3 percent over the next decade, while actual household size is expected to reduce. Scott Wolf, executive director of Grow Smart, said that reduction is from about 2.7 to 2.5 persons per household. Putting a calculator to those numbers, results in what Rhode Island Housing is projecting, a need for 35,000 additional affordable housing units.

The housing units are a combination of single family homes and apartments, with a strong concentration on apartments, Wolf said.

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What will the bond actually fund?

  • Some $40 million of the bond will be used to build 800 single and multi-family housing units, with a concentration on apartments.
  • Some $10 million will be used to address what the proponents describe as “blighted and foreclosed properties,” removing “eyesores and sparking revitalization in neighborhoods and communities across Rhode Island.”
  • According to advocates bond passage will leverage another $160 million in federal and private investment.
  • Projections are that projects resulting from bond passage will create 1,700 construction jobs.

 

Why is the bond important?

  • Wolf said that affordable housing is available to those individuals and families that earn up to 80 percent of the state’s median income, which means wage earners of $40,000 to $50,000 will qualify for affordable housing. “A lot of this housing,” Wolf said, “is for working people.”
  • According to the bond’s proponents there will be a need for 35,000 additional affordable housing units over the next decade, with an increasing population and decreasing household size.
  • “Half of Rhode Island renters, 33 percent of home owners with a mortgage, and 20 percent of home owners without a mortgage are considered cost burdened, meaning after paying housing costs there’s little money left over to pay for basic living needs,” proponents said on their website.
  • Rhode Island has not kept pace with its neighbors, investing little in affordable housing and homelessness programs. According to the bond proponents, Rhode Island is spending only about $8 per capita, while in Massachusetts it’s $99 per capita, and in Connecticut $76 per capita.
  • There’s also the 1,700 construction jobs that proponents project will be added by projects under the bond, and the $160 million they project will be received in federal funds and private investment if the bond passes.

 

Who is the opposition, and what are they saying?

  • The only opposition that has been vocal is The Rhode Island Center for Freedom and Prosperity, which is opposing this and all other bond issues, with the exception of ethics (which it support) and Tiverton Casino and Veterans Home (both of which it has taken no position). The Center’s argument is that the state cannot afford the additional debt. Mike Stenhouse, the Center’s executive director, was quoted in the Providence Journal article, saying “If we had a stronger economy with people making better incomes,” there wouldn’t be less need for affordable housing.
  • Additionally, three Republican state Senators opposed the bond in the legislature. The three were the only legislators – House and Senate – who opposed all the spending bonds. They are state Sen. Mark Gee, R-Dist. 35, representing East Greenwich, North Kingstown and South Kingstown; state Sen. Nicholas Kettle, R-Dist. 21, representing Coventry, Foster, Scituate and West Greenwich; and state Sen. Elaine Morgan, R-Dist. 34, representing Charlestown, Exeter, Hopkinton, Richmond and West Greenwich.

 

What is the actual cost?

  • According to the Secretary of State’s office, the actual cost of the total bond, with interest, is $80,150,687. That breaks down as $50 million for principal and $30,150,687 in interest. The interest rate is assumed to be 5 percent, paid in level payments over 20 years.

 

WhatsUpNewp and What’sUpRhode Island  are profiling each of the statewide referenda, in what promises to be a spirited election from the presidency to local public offices and local issues. ICYMI, here are previous stories that we’ve published –

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