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NEW: 2014 HousingWorks RI Fact Book Shows Housing Costs, Foreclosures Up

Friday, October 03, 2014

GoLocalProv News Team

HousingWorksRI released its 2014 Fact Book today, showing that spending on housing outpaced incomes for homeowners on all income levels in the state from 2000 to 2012.

“Rhode Island’s housing market has changed dramatically during the last decade. From the surging home prices in 2003 to when the bubble burst in 2007 to the lingering effects of the foreclosure crisis today, we wanted to see what this has meant for housing affordability for Rhode Islanders at different income levels,” said Nicole Lagace, Director of HWRI. “Documented throughout our analysis are persistent housing cost burdens for homeowners and renters alike, despite marked highs and lows in home and rent prices over the last decade.”

The release marks the 10th annual Housing Fact Book released by HousingWorks, which is now a program in the Division of University Outreach and Engagement at Roger Williams University. The analysis looks back at trends in housing affordability in the state since 2000.

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Methodology

HWRI divided Rhode Island homeowner households into five equally sized income groups, and isolated the changes in household income and spending on housing costs for the lowest income, middle income and highest income homeowners.

“We found that spending on housing outpaced incomes for homeowners at all income levels from 2000 to 2012,” said Jessica Cigna, Research and Policy Director for HWRI. “But more troubling was that Rhode Island’s lowest and middle income homeowners saw a decline in their incomes. It’s no surprise then to see that since 2000 the percent of cost burdened households has grown by 14 percent for the lowest income homeowners, and by 53 percent for middle income homeowners.”

Conducting a similar analysis for RI's rental market, HWRI found that spending on housing grew for all renter households in Rhode Island between 2000 and 2012. According to their analysis, low income renter households saw a 20 percent increase in spending on housing at the same time their incomes decreased by 4 percent. Middle income renters had a 17 percent increase in spending on housing and a 3 percent decline in their incomes.

In addition, HWRI measured the decreased purchasing power of cost burdened homeowner and renter households from the three lowest income groups in Rhode Island, and found that high housing cost burdens decrease the purchasing power of over 130,000 RI households by $927 million annually.

“Imagine if that money was diversified through the state’s economy rather than being tied up in high housing costs. What would that mean for local businesses,” said Lagace. “Certainly, the decreased purchasing power that results from housing cost burdens must be considered as we discuss ways to strengthen the middle class and grow the state’s economy.”

Foreclosures

The Fact Book showed Q2 foreclosures up 5 percent in the first half of 2014 compared to the prior year. For just at the second quarter, foreclosure deed filings declined from 412 in 2013 to 377 in 2014.

Twenty-one communities had an increase in foreclosure deed filings in the first half of 2014 when compared to 2013. Thirteen communities and the East Side of Providence reported decreases, and 5 Five communities saw no change at all.

Related Slideshow: The Most Affordable Communities for Renters

In the below slides, communities are ranked from most affordable to least affordable. Affordability is determined based on the ratio of the median income in a community the average rent for a two-bedroom apartment. Find out where your community ranks.

About the ranking: Data was provided by the Providence Apartment Association. Median income figures are taken from the U.S. Census Bureau’s American Community Survey, which provides a five-year sample of incomes between 2007 and 2011. Rents are taken from survey data collected by Rhode Island Housing. Because of the insufficiency of rental data, the following 11 communities are not in the ranking: Exeter, Foster, Glocester, Hopkinton, Jamestown, Little Compton, New Shoreham, Richmond, Scituate, Smithfield, and West Greenwich.

Note: Since median incomes were only available for Providence as a whole, and not able to be broken out separately for the East Side, the apartment rental data for the East Side is included with the rest of the city. The data for the rents in the East Side and the rest of the city was merged using a weighted algorithm based on the approximate geographic range, putting one sixth of apartments on the East Side and rest in the city.

Barrington

Rank: 1

Median Resident Income: $98,612

Average Two Bedroom Rent: $1,154

Percent of Income Spent on Rent: 14%

East Greenwich

Rank: 2

Median Resident Income: $96,591

Average Two Bedroom Rent: $1,335

Percent of Income Spent on Rent: 17%

North Smithfield

Rank: 3

Median Resident Income: $79,005

Average Two Bedroom Rent: $1,151

Percent of Income Spent on Rent: 17%

Cumberland

Rank: 4

Median Resident Income: $72,689

Average Two Bedroom Rent: $1,107

Percent of Income Spent on Rent: 18%

Lincoln

Rank: 5

Median Resident Income: $74,136

Average Two Bedroom Rent: $1,133

Percent of Income Spent on Rent: 18%

North Kingstown

Rank: 6

Median Resident Income: $78,369

Average Two Bedroom Rent: $1,271

Percent of Income Spent on Rent: 19%

Burrillville

Rank: 7

Median Resident Income: $68,898

Average Two Bedroom Rent: $1,138

Percent of Income Spent on Rent: 20%

Coventry

Rank: 8

Median Resident Income: $67,016

Average Two Bedroom Rent: $1,128

Percent of Income Spent on Rent: 20%

South Kingstown

Rank: 9

Median Resident Income: $74,147

Average Two Bedroom Rent: $1,274

Percent of Income Spent on Rent: 21%

Bristol

Rank: 10

Median Resident Income: $64,405

Average Two Bedroom Rent: $1,135

Percent of Income Spent on Rent: 21%

Portsmouth

Rank: 11

Median Resident Income: $76,500

Average Two Bedroom Rent: $1,391

Percent of Income Spent on Rent: 22%

Charlestown

Rank: 12

Median Resident Income: $69,271

Average Two Bedroom Rent: $1,271

Percent of Income Spent on Rent: 22%

Middletown

Rank: 13

Median Resident Income: $71,901

Average Two Bedroom Rent: $1,322

Percent of Income Spent on Rent: 22%

Westerly

Rank: 14

Median Resident Income: $60,432

Average Two Bedroom Rent: $1,123

Percent of Income Spent on Rent: 22%

Tiverton

Rank: 15

Median Resident Income: $63,767

Average Two Bedroom Rent: $1,216

Percent of Income Spent on Rent: 23%

Narragansett

Rank: 16

Median Resident Income: $64,031

Average Two Bedroom Rent: $1,235

Percent of Income Spent on Rent: 23%

Cranston

Rank: 17

Median Resident Income: $58,442

Average Two Bedroom Rent: $1,157

Percent of Income Spent on Rent: 24%

Warren

Rank: 18

Median Resident Income: $53,284

Average Two Bedroom Rent: $1,057

Percent of Income Spent on Rent: 24%

West Warwick

Rank: 19

Median Resident Income: $50,006

Average Two Bedroom Rent: $1,096

Percent of Income Spent on Rent: 26%

Warwick

Rank: 20

Median Resident Income: $59,973

Average Two Bedroom Rent: $1,315

Percent of Income Spent on Rent: 26%

Johnston

Rank: 21

Median Resident Income: $54,880

Average Two Bedroom Rent: $1,213

Percent of Income Spent on Rent: 27%

North Providence

Rank: 22

Median Resident Income: $50,211

Average Two Bedroom Rent: $1,114

Percent of Income Spent on Rent: 27%

Newport

Rank: 23

Median Resident Income: $58,080

Average Two Bedroom Rent: $1,371

Percent of Income Spent on Rent: 28%

East Providence

Rank: 24

Median Resident Income: $49,408

Average Two Bedroom Rent: $1,197

Percent of Income Spent on Rent: 29%

Pawtucket

Rank: 25

Median Resident Income: $39,628

Average Two Bedroom Rent: $1,026

Percent of Income Spent on Rent: 31%

Woonsocket

Rank: 26

Median Resident Income: $39,329

Average Two Bedroom Rent: $1,021

Percent of Income Spent on Rent: 31%

Central Falls

Rank: 27

Median Resident Income: $32,759

Average Two Bedroom Rent: $863

Percent of Income Spent on Rent: 32%

Providence

Rank: 28

Median Resident Income: $38,922

Average Two Bedroom Rent: $1,126

Percent of Income Spent on Rent: 35%

Statewide Average

Median Resident Income: $55,975

Average Two Bedroom Rent: $1,176

Percent of Income Spent on Rent: 25%

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