State of Affordable Housing “A Grade Above Deplorable” in RI

Wednesday, March 13, 2013

 

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In light of a recent report, lawmakers renew call for greater focus on plight of state's renters and middle class.

When the National Low Income Housing Coalition released its annual Out of Reach report earlier this, detailing the current conditions of the rental housing market across the country, the findings for Rhode Island were far from positive.

In addition to being the state with the 17th-highest rental costs in the country, the report concluded that affordable renting housing remains out of reach for average Rhode Islanders and investment in new affordable housing is “insufficient to meet the demand.”

But while the report itself reached glaring conclusions, the results it found aren’t news.

At least not to a group of General Assembly members who have advocated for years that the state must do more to ease the cost burden its renters have to bear.

One such measure is a bill that will be introduced this afternoon to strengthen tenants’ rights in the event of a bank foreclosure of a multi-family home. Another is a renewed push for restoration of the the Rhode Island Neighborhood Opportunities Program (NOP), which provides subsidized rental payments for low-income households.

But are those ideas enough?

Lawmakers say they’re worth a chance, particularly given the way things currently are in the Ocean State.

“I don’t want to say it’s deplorable but maybe it’s a grade above that in the sense that we have so many Rhode Islanders who are making less and less money but rents are going up and up and up,” Senator Elizabeth Crowley said of the current state of affordable housing in RI. “And because of that, we certainly know that people are not being able to afford their apartments and they’re becoming more and more homeless. And these are working people, it’s the working poor.”

“Last I looked at the numbers of families that are housing costs-burdened, typically whether you’re paying more than 30 percent of your income for housing-related costs, is about 50 percent of renters in the state,” Rep Jay O’Grady said. “I think in Providence, that number is somewhere around 60 percent (and) it’s not just related to Providence. The numbers are pretty high, higher than you think in Newport, Bristol County and Kent County. The rental cost burden in this state, I think, is greater than people appreciate.”

Still Out of Reach

Monday’s report on affordable housing couldn’t have been timed much better.

On the same day that Rhode Island Governor Lincoln Chafee and U.S. Senator Jack Reed were celebrating the opening of an affordable housing unit in Providence that is expected to hold 83 homes for an estimated 200 residents, lawmakers were quick to say more must be done to help the state’s residents better keep up with the rising costs of rent.

According to the report, the fair market rent for a two-bedroom apartment in the state rose $21 to $945 over the last year, meaning the average household in the state would have to earn $37,813 annually to be able to afford the rent based on the generally-accepted principal that housing costs should be 30 percent of a person’s income.

Extrapolating that out, that means the average minimum wage worker would have to work 94 hours per week, 52 weeks per year or live in a household with an average of 2.3 minimum wage earners working 40 hours per week year-round to “keep up.”

Those numbers are all worse than they were a year ago, a trend Crowley says can be seen just by looking at the effect it’s having on the state’s middle class.

“What’s happening is in order to be considered middle income, you’ve got to be making $80,000-$90,000,” she said. “Just to afford a four-room apartment with two or three children, you should be making at least $40,000 a year. many of those people are not doing that, they’re not meeting that criteria for the amount that we’re charging for rent and I’m not saying that the landlord are necessarily wrong about that but what is wrong is most people, their full-time jobs are not making enough.”

Crowley says that when workers can’t keep up with rising costs, they’re forced to make “strong choices.”

“They’re asking ‘Do we pay the rent?,’ ” she said. “Do we feed our children? Are we going to have the heat? Are we going to have electricity? Those are the actual facts and we’re talking about working people, middle class people.”

An Effort to Turn Things Around

Part of the problem, O’Grady said, is that the housing crisis of the last few years led to a rash of foreclosures, particularly as properties being bought up by businessmen looking to “flip” them for a profit failed to sell and were abandoned.

O’Grady said he believes that flooded the market with individuals looking to rent and dropped the number of houses available, driving the price up.

It’s one of the main reasons he’s backed the “just cause” bill that firm up tenants’ rights during the foreclosure process.

O’Grady is one of five Representatives, and four senators, supporting the legislation, which will be presented during a news conference at the State House this afternoon.

“Right now, when a multi-family house gets foreclosed on, the banks are in the practice of boarding the house and evicting all the tenants so that has the dual effect of taking units out of the market and then pushing more people into the market at the same time so it both decreases supply and increases demand,” he said. “So what the just cause bill does is says that in the event that that event transpires, and a bank is foreclosing on a multi-family, non owner-occupied house, they would not be allowed to evict tenants but for just cause.”

O’Grady says that as long as tenants are paying their rent and meeting “every other obligation under the landlord-tenant act,” banks would have to keep them in place, similar to the process when a building is sold to a new owner.

O’Grady thinks this law, and a renewal of the NOP program would go a long way toward addressing the state’s housing issue. In addition, he believes the state should come up with a permanent affording housing source, instead of the current process of pitching an idea to voters every few years.

“The voters were wise enough to endorse the bond referendum on November’s ballot for $25 million as they were back in 2006 for the bond referendum at that point but beyond those bond proceeds that seem to come up every few election cycles, there is no permanent source of state funding,” he said.

Either way, Crowley says, something must be done. Fast.

“Everybody’s saying the economy is getting better and perhaps that’s so,” she said. “But if you were to go knocking door-to-door in my neighborhood, and I’m not talking about the neighborhoods where these are not working people, I’m talking just ordinary Joe citizens, you’ll find that they’re having a problem making ends meet because the cost of health care is going up, food is going up, and if we don’t try to help, people can’t catch up.”
 

 
 

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