REPORT: RI’s Housing Program Has Produced "Relatively Few Units at a High Cost"

REPORT: RI’s Housing Program Has Produced "Relatively Few Units at a High Cost"

The Rhode Island Public Expenditure Council (RIPEC) on Thursday released a report focused on the structural inefficiencies in Rhode Island’s affordable housing investments and policies.

 

While the state has moved away from decades of underfunding housing development, recent record-level investments have relied on a high-cost, high-subsidy model. RIPEC states  “that this approach has served relatively few Rhode Islanders and has made no meaningful impact on the state’s overall housing challenges.”

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This comes at a time when rents in Providence continue to rocket upwards, and the median price of a single-family house jumped 10.2% year-over-year to $529,000.

 

“Rhode Island authorized over $644 million toward housing since 2021, including substantial new and increased taxes, yet we are struggling to convert this record investment into the production volume needed to meaningfully close our affordable housing gap,” said RIPEC President & CEO Michael DiBiase. “Our research shows that the state relies on an overly complex strategy with policy incentives that fail to maximize housing production.”

 

The report found that it would take nearly $6 billion in state funding to bridge Rhode Island’s housing gap, as development costs top $500,000 per unit, and state subsidies approach $300,000 per unit.

 

“This is an inefficient and unsustainable path that requires a strategic shift to ensure a real return for taxpayers and an increase in housing production,” added DiBiase.

 

This is RIPEC's second major report on the efficiency of the state's housing spending.

 

Key Findings of the Report Are:

 

• Rhode Island invested $644.1 million in housing between 2021 and 2025 from multiple sources, with direct production and preservation accounting for $467 .0 million (72.5 percent).
• In April 2026, $52.2 million from the 2024 bond and other state sources financed 200 newly constructed units (184 affordable, 16 market-rate).
• These units average a total development cost of $512,377 each, with the state subsidizing 51.0 percent ($283,782 per unit).
• This average total development cost was found to be 49.5 percent higher than the average cost of construction in the private market, based on a recent survey of new multifamily properties for sale in Rhode Island.
• Of the 200 newly constructed units, 92.0 percent are restricted to affordable income levels (below 80 percent AMI), with zero units targeted for middle-income households (80-120 percent AMI).
• The 2024 and proposed 2026 Housing Bonds are projected to yield just 642 net new rental units, satisfying only 28.5 percent of the Housing 2030 production goal.
• A projected cumulative state investment of $522.0 million since 2021 is expected to yield 2,207 affordable units, which addresses only 9.6 percent of Rhode Island's total affordable housing deficit of 23,222 units.

 

“Given the extraordinary spending to date and the need for more units, RIPEC recommends that the General Assembly dedicate at least half of the proposed 2026 housing bond to middle-income housing,” DiBiase said. “We should not continue to ask taxpayers to fund a model that fails to benefit the vast majority of Rhode Islanders. Instead, we must fundamentally improve production efficiency and build middle-income and market-rate housing to increase supply and provide relief to families across the entire state.”

 

Policy Recommendations

RIPEC recommends policymakers:

• Mandate at least half of future bonds for middle-income housing

• Realign state policy to maximize total unit production

• Leverage alternative mechanisms to deliver housing affordability

• Streamline state housing governance and programs - reduce the redundancy between Rhode Island Housing and the Secretary of Housing's functions.