Rhode Island’s Most Foreclosed Communities - 2011
Tuesday, September 20, 2011
Rhode Island is still very much in the midst of a housing crisis, with more than 9,000 foreclosures set to be initiated this year, state affordable housing advocates say.
As it stands now, the state saw 1,128 foreclosures completed in the first six months of 2011, with the vast majority coming from some of the most distressed communities. The four municipalities with the highest foreclosure numbers this year include Providence, Warwick, Pawtucket and Cranston. Combined, this group makes up for more than half of all foreclosures in the first half of the year.
The large number of foreclosures comes at a time when rent costs have skyrocketed by more than 50 percent over the course of the last decade, according to HousingWorks RI Executive Director Nellie Gorbea. HousingWorks RI today will release its 2011 Fact Book, which showcases the foreclosure crisis and escalating rents costs as examples of why the states needs to reinvest in affordable housing.
“Until the shortage of long-term affordable housing is addressed, Rhode Island will continue to be vulnerable to instabilities in the housing market, including foreclosures,” Gorbea said. “Yet funding for the development and operation of long-term affordable housing was not included in the State of Rhode Island fiscal year 2012 budget. This puts us at an economic disadvantage to our neighboring states which are consistently investing in long-term affordable housing.”
Hardest Hit Communities
In 2006, voters supported a $50 million housing bond that resulted in the development of 1,255 long-term affordable homes for Rhode Islanders in 30 communities across the state. Now Gorbea is hoping to get another bond on the ballot in 2012 in an attempt to slow down another wave of foreclosures.
Gorbea says the additional funds are desperately needed. Despite far exceeding the expectations from the 2006 housing bond, the state’s poorest communities continue to struggle with vacant homes and rising rents.
In 2011 alone, the Providence has spent more than $112,000 boarding up vacant homes, according to city spokesman David Ortiz. The city has already experienced 277 foreclosures for the year, including 166 multi-family homes.
In the city, the hardest hit neighborhoods have been Reservoir, the West End, South Elmwood, Silver Lake and Mount Pleasant, Rhode Island Housing spokesperson Faye Zuckerman said.
“Overall foreclosure numbers are about 30% lower than their 2010 highs,” Zuckerman said. “As for the nature of the reasons, it has been folks experiencing financial hardships due to employment, whether fully unemployed or under-employed. This has especially exacerbated the situation for those who were already or nearly overextended. This has been the situation for about the last two years or so when the first wave of foreclosures from primarily unsafe loans changed to the second wave due to the economic crisis.”
Warwick: Most Single-Family Foreclosures
But the capital city isn’t the only community still suffering from the foreclosure crisis. According the act Book, a household earning the state’s median household income of $54,119 would only be able to afford a median-priced single-family home in just nine of Rhode Island’s 39 cities and towns in the second quarter of 2011.
In Warwick, 113 single-family homes have been foreclosed on in 2011, by far the most in the state, according to the report. Gorbea said that unlike Providence, foreclosures in the state’s second largest city are spread relatively evenly across the city and that the homes are usually purchased at a faster rate.
Warwick has had very few multi-family (5) and condo (12) foreclosures in 2011.
The latest foreclosure figures show that the monthly average of residential foreclosure deeds filed during January through June 2011 (188 per month) is outpacing the 2010 monthly average in Rhode Island (157 per month.)
And with those numbers on the rise, housing advocates say it’s important for homeowners and renters to understand their options. According to Rhode Island Housing, the Smithfield Senior Center (6 p.m.) and Red Bridge Neighborhood Association in East Providence (6:30 p.m.) will each hold informative meetings about foreclosures next Tuesday evening
At the same time, Attorney General Peter Kilmartin is calling attention to potential scam artists that prey on the state’s most vulnerable citizens. He is warning residents not fall for loan modification scams.
“With such a surge in foreclosure proceedings, we want to ensure that Rhode Island homeowners are aware of the legitimate resources available to help them,” said Attorney General Kilmartin. “For most Rhode Island families, their home is their most important asset. When faced with foreclosure, many consumers are scared and don’t know where to turn. It is so important for consumers to educate themselves so that they do not fall victim to loan modification scam artists trying to make a quick buck.”
In the end, the best way for the state to avoid any of the problems that come with foreclosure is to look at affordable housing as investment in economic development.
While Massachusetts has approximately $285 million in its current state operating and capital budgets for housing programs and Connecticut is investing $130 million in housing this fiscal year, Rhode Island’s affordable housing funding has essentially dried up.
Gorbea said the numbers don’t lie. The $50 million bond in 2006 generated about $800 million in total economic activity. Construction activity supported by the bond accounted for 53 percent of the total estimated cost of residential construction permitted in Rhode Island from 2007 to 2010. And at a time of record-high unemployment numbers, the bond supported 6,100 jobs in the state.
She said she hopes the Fact Book will make it clear how much the state needs to continue to invest in housing.
“Clearly Rhode Island needs to do more to promote economic growth through the development of long-term affordable housing,” Gorbea said. “We hope the information contained in the 2011 Fact Book will prompt policymakers to develop solutions that will help more Rhode Islanders obtain quality affordable homes.”
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.
Enjoy this post? Share it with others.
Commenting is not available in this channel entry.