NEW REPORT: Investment in Low-Income Housing Boosts Jobs
Friday, June 10, 2011
A heavily voter-supported $50 million housing bond has rewarded that investment by creating 1,225 affordable homes in Rhode Island and supporting 6,100 jobs that generated nearly $300 million in wages.
The $50 million, four-year dedicated funding stream generated about $800 million in economic activity, according to the Building Homes Rhode Island (BHRI) Year Four Status Report on the bond’s performance
A Great Story
“This is a great story to tell,” said Nellie Gorbea, executive director of HousingWorks RI, the coalition that led the push for the bond’s passage in 2006. The referendum passed with 66 percent voter approval, with all of the state’s 39 cities and towns supporting its passage.
BHRI was established by the state’s Housing Resources Commission (HRC) to distribute Rhode Island’s affordable housing bond, and the 2010 allotment is the last of the bond funding. Its goal was to “make it possible for low and moderate-income families - many of whom represent critical occupations—to rent or buy a home in Rhode Island.”
A Boost to the Construction Industry
In April 2010, HousingWorks RI commissioned an econometric impact study that allowed the estimation of the multiplier, or “ripple,” effect of BHRI investments.
The study showed that construction activity supported by BHRI has accounted for 53 percent of the total value of residential construction permitted in Rhode Island from 2007 to 2010. In Rhode Island, construction and real estate industries have consistently accounted for about one-fifth of RI‘s gross state product, and one in every 10 jobs in the state belongs to one of these two industries.
“Roughly one-half of the 6,100 jobs we supported (which means jobs saved during the state’s current high unemployment crisis, versus jobs created) were in the construction industry,” said Gorbea. “There is economic stimulus in construction jobs.”
“The nice thing is that what you are left with is real,” Gorbea said. "The homes are there with families in them.”
Thirty Communities Benefited
In its four years, BHRI helped create 1,255 affordable homes in 30 Rhode Island communities, many of those still under construction. Since the first funds were distributed in July 2007, the $50 million has been awarded to affordable housing developers through a highly competitive process.
“BHRI developments have allowed the rehabilitation of neglected and foreclosed properties, and encouraged sustainable design and construction, strengthening Rhode Island’s green economy while revitalizing neighborhoods blighted by foreclosures,” the report said.
Working through the state Housing Resources Commission with Rhode Island Housing serving to administer the funds, BHRI allocated funds to approved developers.
“It was a leveraged and very efficient system,” said Gorbea, noting the participation of public, private and non-profit groups involved in vetting the proposals. “We were able to tap into existing programs and resources.”
New Bond for 2012?
An issue brief was distributed to the legislators at the State House yesterday. It features highlights of the program, and lists the specific 2010 projects funded by BHRI: 333 affordable apartments and 86 "affordable ownership" homes.
But now the original 2006 bond funds have been fully spent. With the bond funding gone, and another affordable housing funder, the Neighborhood Opportunities Program losing much of its funding, there has been a 97 percent cut in funds available for such projects in the state.
As of June 2011, no other funds have been committed by the state to continue funding affordable homes in Rhode Island. Rhode Island is now one of a handful of states in the country that will not have a dedicated funding stream for affordable housing.
Is there a new affordable housing bond on the agenda?
“We are looking at the possibilities for the future,” said Gorbea, whose coalition would doubtless be involved in any effort to support such an initiative. “But there are challenges given the current demands on the state’s finances.”
“The 2006 bond gave great returns on the investment, so we are giving serious consideration to a new bond in 2012,” she said. “But the needs are there. The need for construction sector jobs, and the need for affordable housing.”
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