RI’s Most Foreclosed Communities
Friday, September 28, 2012
More than 7,500 Rhode Island homes were lost in foreclosure between January 2009 and June of this year, with 14 communities seeing at least 100 properties taken over by banks during that time span, according to HousingWorks RI, an affordable housing advocacy coalition.
The group is set to unveil its annual fact book this afternoon, providing community-by-community breakdowns of housing costs, foreclosure totals and annual household incomes across the state.
And while foreclosure numbers appear to have dipped slightly, advocates say the state is still facing a severe affordable housing shortage.
“We can’t overstate the importance of having an adequate supply of affordable homes for Rhode Islanders,” said Nellie Gorbea, executive director of HousingWorks RI. “Until the shortage of affordable housing is addressed, Rhode Island will continue to be vulnerable to instabilities in the housing market, including foreclosures.”
Over Half of Recent Foreclosures Stem From Housing Bubble
According to the fact book, well over half of the homes lost in foreclosure since 2009 were purchased during the housing bubble between 2000 and 2006. During that time span, the report states, home prices appreciated at the steepest rate in the state history, from $135,976 to $282,900. In 2009, 63 percent of foreclosed homes were purchased during that time period. In the first six months of this year, 50 percent of the 896 homes lost were bought during those six years.
“The run up in prices in the early part of the last decade resulted in housing expenses that were unsustainable for many homeowners and we’re still seeing the resulting high rates of foreclosure today,” Gorbea said.
To no surprise, many of the larger communities top the list of most foreclosures over the past three years, with nearly a quarter of all homes lost (1,866) coming from the capital city. For the first time, this year’s fact book also highlights the disparities between Providence’s wealthy East Side and the rest of the city.
For example, on the East Side, where the average home price is $426,000, just eight homes were lost in foreclosure between January and June of this year. Across the rest of the city, the average home price is just $100,000 and 186 homes were foreclosed upon during the first six months of the year.
Elected Officials Concerned
According to Corey Allard, a leading foreclosure prevention attorney in the state, foreclosure numbers are decreasing thanks to a ruling last year that forced banks to come to the table and negotiate with underwater homeowners. Allard said he still sees many situations where mortgage assignments include forgeries, fraud, and typos leading to invalid auctions and said this is an issue elected officials still have to address.
“Our elected officials should be thinking about holding services accountable for the truth of the documents recorded in the city/towns and for working in good faith with homeowners in the modification process,” he said.
The ongoing foreclosure crisis is one reason the Providence City Council this week agreed to establish a seven-member commission dedicated to addressing community development, including housing issues. According to veteran Councilman Luis Aponte, a commission devoted to examining and recommending policies and ordinances will help Providence reach its housing and planning goals.
“Providence needs clear direction and long-term vision on matters relating to housing and community development,” Aponte said. “We have many nonprofit organizations doing terrific community development and affordable housing projects, but we lack a cohesive plan.”
But Providence isn’t the only community that has suffered from hundreds of foreclosures in recent years. Warwick, Pawtucket, Cranston and Woonsocket all saw at least 443 homes lost since the beginning of 2009.
In Warwick, Mayor Scott Avedisian said his administration is committed to working with several organizations to address foreclosure prevention. Avedisian pointed out that the vast majority of foreclosures in his community are resold within approximately 90 days.
“The City has worked with HousingWorks RI on a number of initiatives to examine people’s situations and to find ways to help them restructure,” Avedisian said. “The City has also been working with Rhode Island Housing and its Hardest Hit Fund. There have been meetings and outreach efforts in order to help people who find themselves in potential foreclosure situations.”
A Government Program That Works
For Gorbea, the state’s continuing battle with foreclosures only underscores the need for voters to approve the 25 million bond question in November. Gorbea said a similar $50 million affordable housing bond approved in 2006 helped fund over 1,300 affordable homes in 30 communities across the state. More than half of the bond funds went toward the rehabilitation of foreclosed and abandoned properties.
“This is a government program that works,” Gorbea said. “We have the evidence.”
Gorbea said she is “cautiously optimistic” that voters will support the bond because she believes Rhode Islanders have seen firsthand what the foreclosure crisis has done to communities across the state. She said the key is convincing voters that more affordable housing is directly tied to educational outcomes and public health.
“Given budgetary concerns, our leaders must make evidence-based decisions on how to spend public dollars wisely,” Gorbea said. “Long-term affordable housing is infrastructure that enhances other public investments in health and education, while strengthening our economy.”
Editor's Note: The original version of this list accidentally omitted Burrillville. An edit has been made.
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