Half of RI Renters Spend Over 30% of Income on Rent
Wednesday, May 22, 2013
HousingWorks RI report issued this week shows half of RI renters spend over 30% of their income on housing - to the detriment of the state economy.
"Policymakers need to see that these high housing costs have a direct impact on the economy," said Jessica Cigna, Research and Policy Associate at HousingWorks RI. Cigna was named last fall to the Providence Commission on Housing and Community Development, established by the Providence City Council to study and make recommendations regarding best practices, policies, and legislation to enhance and improve community development efforts in Providence.
According to the HousingWorks RI report, renters who are cost burdened by housing expenses "cannot fully participate in the local economy". National research finds that when low-income families have high rental costs, they spend 74 percent less on health care expenses, 52 percent less on clothing, and 24 percent less on food than families with affordable housing.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAffordable Housing Funding Concerns
"We need a holistic approach to housing funding, that includes both capital costs, and operating costs," said Cigna. "Rhode Island voters approved a $25 million bond in 2012 for the state's capital program, which addresses construction needs. However, operating costs -- for example, in the way of rental subsidies, which are a common budget appropriation in other states, were not part of the Governor's FY14 budget, nor have they been for several years now."
Cigna cited in particular the decrease -- to zeroing out -- of the Neighborhood Opportunities Program (NOP), which provided rental assistance to families in need, as an example of diminishing means of assistance to help families in need.
"The General Assembly authorized $5 million in initial funding for NOP during the 2001 legislative session. NOP funding remained level until FY2006 when state funding increased to $7.5 million. This was before the passage of the first housing bond in 2006," said Cigna.
Cigna continued, "By FY2008, NOP funding had been reduced to $2.5 million and remained at that level in FY2009 and FY2010. The Governor's budget for FY2011 provided no funding for NOP and instead moved the responsibility over to Rhode Island Housing.
However, Rhode Island Housing admitted the extra burden to support rental assistance was problematic.
'Rhode Island Housing has always used any extra funds for housing programs. Most of this goes toward programs to prevent homelessness directly or to provide rental subsidies for families," said Amy Rainone with Rhode Island Housing. "With the requirement that Rhode Island Housing fund NOP, we have had to reduce funding for other programs. Unfortunately, this comes at a time when federal housing programs are also being severely cut. This has resulted in severe drops in our discretionary and operating funds."
Rainone continued, "Sequestration alone will reduce overall housing funds in Rhode Island by $15 million, much of which comes through Rhode Island Housing. Among the sequestration impacts are a loss of 525 housing vouchers. It may also mean the closing of a shelter next year. It is also severely restricting the production of new affordable homes."
Olneyville Housing Corporation's Shea Echoes Need for Rental Support
Olneyville Housing Corporation Executive Director Frank Shea, who recently oversaw the completion of Olney Village, a development providing 40 new affordable homes and three new community amenities in the Manton Ave. area of Olneyville in Providence, indicated that affordable rental units were needed -- and critical -- for the community.
"Homeownership, while laudable, is not necessarily for everyone," said Shea. "Affordable rental units are an important part of addressing the wide range of housing needs out there. And it's important that we keep rental properties up and maintained. They contribute to the tax base, which many people don't realize. We've seen rental units taken offline, much to the detriment of the community."
Shea acknowledged that resources were scarce to support operating costs, however. "We're unfortunately resource-poor here in Rhode Island. Per capita, Connecticut and Massachusetts spend much more."
The report issued by HousingWorks showed that Massachusetts' FY13 state budget appropriated $134 in operating dollars, in addition to over $80 million in capital construction awards.
In the same budget year, the State of Connecticut supported $52.9 million in operating costs, in addition to $70 million in capital construction.
"We've tended to do things one way here [in Rhode Island], and that's provide capital funding. However, providing operating support would enable us to be creative in our delivery methods, to address the pressing needs for affordable rental opportunities, which is vital to the health of families and neighborhoods," said Shea.
Related Articles
- State of Affordable Housing “A Grade Above Deplorable” in RI
- RI Rentals Among Most Unaffordable in US
- Reed: RI Getting $15.1 Million for Affordable Housing
- Advocates to Spend Thousands on Affordable Housing Bond Question
