Business leaders and housing advocates today unveil a plan to build 5,000 affordable-housing units across the state in five years.

01:00 AM EST on Thursday, March 30, 2006

BY RANDAL EDGAR
Journal Staff Writer

Today at the State House, a coalition of business leaders, housing advocates and social-service providers will rally in support of a bill that would provide $75 million to build affordable housing.

The bill, calling for a bond referendum this November, would more than double annual state spending on affordable housing construction. If approved by voters, it would provide subsidies for developers, grants for communities and employers and startup money for a housing and conservation trust fund.

Bold a step as it is, the bill is just one of dozens of recommendations in a new state plan -- Rhode Island's first -- for addressing its shortage of affordable housing.

Prepared by a consultant with help from state officials, local planners and housing advocates, the plan calls for strategies that include smaller house lots, incentives for developers and benchmarks to encourage communities to meet the goals in their local affordable housing plans. It also argues for a public-awareness campaign and a strong effort to preserve existing affordable units.

But backers say the most important step begins today, in the fight to get the bond package passed.

"If we don't have the $75-million bond, the plan is a piece of paper," said Susan Baxter, chairwoman of the Housing Resources Commission, which approved a draft of the plan in January. "Obviously, we hope that the citizens of Rhode Island will understand the need."

The bond package would provide a little more than half the money called for by the five-year plan.

In total it calls for $141 million -- enough to provide at least a $50,000 state subsidy for 2,821 affordable housing units.

That number, when combined with an estimated 1,300 affordable units that can be built with current programs and another 879 projected to be built by for-profit developers using smaller-lot zoning incentives, adds up to roughly 5,000 new affordable units by the end of 2010.

If the goal is realized, Rhode Island will have made up a quarter of its affordable housing gap -- the difference between the existing supply of subsidized, income-restricted housing and the amount that would exist if all communities met the state goal that 10 percent of their housing be affordable.

"That's a real stretch for us, because we're looking to produce 5,000 units in five years," said Susan Boddington, a deputy director at the Rhode Island Housing & Mortgage Finance Corporation. "Currently we're producing about 1,300" every five years.

Most of the money in the bond bill -- $65 million -- would provide subsidies to help nonprofit developers build affordable housing, as well as grants for infrastructure improvements needed to build affordable housing and matching grants for employers that create housing-assistance programs for employees.

Another $10 million would go to the state Housing and Conservation Trust Fund, providing startup money for what advocates have long hoped would become a permanent source of financing for affordable housing and open space.

Sponsored by Sen. John Tassoni, D-Smithfield, and Representatives Thomas Slater, D-Providence, and Brian Patrick Kennedy, D-Hopkinton, the bond bill has been endorsed by HousingWorksRI, a coalition of more than 100 businesses, housing advocates and social-service agencies. In a news release yesterday, the group pointed to the crux of the problem: while housing prices have doubled in the past five years, construction is at a 20-year low.

"It's very important for us to get this off the ground," Tassoni said. "Hopefully the leadership will see the light and see the importance of this, on both sides, and let the people vote on it."

One place where the bill hasn't won support, so far, is at the governor's office. Jeff Neal, a spokesman for Governor Carcieri, said the governor recognizes the importance of the housing issue but is trying to address other needs in his proposed budget.

"There were a number of competing priorities and there's only so much debt that the state can take on," Neal said. "But he is certainly willing to talk to the General Assembly about this issue."

The state plan, scheduled for public hearings on April 18 and 19 before the State Planning Council, also calls for legislation that would:

Establish performance indicators for 34 communities that haven't reached the 10-percent goal.

Require five communities, Cranston, North Providence, Pawtucket, Warwick and West Warwick, that are now exempt from the 10-percent goal because of their high numbers of rental units, to draft plans showing how they will meet it.

Limit property taxes on affordable units.

Exempt affordable units from impact fees and building permit caps.

The plan also calls on state agencies such as Rhode Island Housing and Statewide Planning to develop a map showing areas suitable for higher-density development, and to work with communities on compact development strategies.

While the plan has won endorsements from the Housing Resources Commission and the state Technical Committee, it has also taken some criticism.

W. Michael Sullivan, director of the Department of Environmental Management, outlined concerns about greater densities and their impact in communities that don't have public sewage systems in a memo to Kevin Flynn, associate director for planning at the Department of Administration. Flynn said those concerns are being addressed.

Others have questioned assumptions underlying the plan, required by a revised Low and Moderate Income Housing Act that lawmakers passed in 2004. Its goals, for example, are based on the state's 10-percent goal, set when the affordable-housing law was first adopted in 1991.

Housing advocates agree the 10-percent goal understates the need for affordable housing, considered closer to 30 percent when all the households spending more than a third of their gross income on housing are counted.

Some, such as B. Michael Rauh, a member of the State Planning Council, have said that whatever the real need is, the plan should state it.

"It's based on an arbitrary number that someone got from somewhere," he said at a recent council meeting. "It would seem to me that if we believed in our heart of hearts that the number should be bigger, then the plan shouldn't rationalize" 10 percent.

Others argued that whether the need is stated at 10 percent or three times that is irrelevant, because either way, it's not going to be met in five years.

"It gets you a quarter of the way to 10 percent," Flynn said, responding to Rauh's comments.

The plan also calls for the state to encourage, but not require, five communities now above the 10-percent mark to continue adding to their affordable housing stock, even though those communities -- Central Falls, East Providence, Newport, Providence and Woonsocket -- have some of the greatest needs.

Of the 4,866 new affordable units called for by the end of 2010, 80 percent would be rental units, reflecting the statewide need, Boddington said.

And though the five communities above 10 percent would not have to add to their affordable housing stock, the state plan does call for them to prepare local plans to address their needs, she said.

redgar@projo.com / (401) 277-7418