State awarded $3.8 million federal grant to promote affordable housing development

House Speaker K. Joseph Shekarchi, speaks at the podium in the Rhode Island State House Library on Wednesday, July 3, 2024. His remarks came as Rhode Island was awarded a $3.8 million federal grant to create more affordable housing units in Bristol and Washington counties. Seated front row from left to right: U.S. Rep. Seth Magaziner; U.S. Rep. Gabe Amo; U.S. Sen. Sheldon Whitehouse; and U.S. Housing and Urban Development Assistant Secretary Kimberly McClain. Back row: RIHousing Executive Director Carol Ventura; Rhode Island Housing Secretary Stefan Pryor; and State Senate Finance Chairman Lou DiPalma, a Middletown Democrat.(Christopher Shea/Rhode Island Current)

State leaders looking to lift Rhode Island from its poor national ranking in housing production have enacted reforms to cut red tape and jumpstart construction. But pockets of resistance continue.

To wit: the town of Narragansett in Washington County, where local officials passed an ordinance banning multi-family units in high-density areas in May. The measure defied a 2023 state law that allows any construction on a substandard lot without the need for lot area variance.

“If no action is taken, the new state law has the potential to authorize significant increases in density of the highest density zones in town, thus affecting the character of these neighborhoods and potentially overtaxing public utilities,” Community Development Director Michael DeLuca wrote to the Town Council.

It’s that kind of perception state and federal officials hope to change via a $3.8 million grant from the U.S. Department of Housing and Urban Development (HUD). Much of that funding will be focused on supporting the development of more affordable housing in Bristol and Washington counties.

The funding, part of the agency’s Pathways to Removing Obstacles to Housing (or PRO Housing) program, was announced in late June , but officially awarded by HUD Assistant Secretary Kimberly McClain during a stop at the State House Library Wednesday, July 3.

“Affordable housing is housing we can all live in,” McClain said at the ceremony attended by state leaders and members of Rhode Island’s congressional delegation. “It’s not just Section 8.” McClain was referring to the federal housing voucher program for low-income families, older adults and people with disabilities.

The state had applied for a total of $9.6 million in its application submitted to HUD last November.

Just how the state plans to allocate the $3.8 million is still being determined, though outgoing Housing Secretary Stefan Pryor did confirm at least one target at Wednesday’s grant announcement: the state’s Health Equity Zone (HEZ) initiative, which are locally-run programs where residents work together to improve public health outcomes in their neighborhoods.

“What I will say is that it centers on HEZs,” Pryor said.

Housing needs overlap health and wellbeing, acknowledged Executive Office of Health and Human Services Assistant Secretary Ana Novais in an interview after the grant announcement.

“Everything is connected,” Novais said. “When housing came up with their application, naturally the path for HEZs went toward housing.”

‘Areas of opportunity’

The state’s application sought to spend $2.75 million to extend its Health Equity Zone Housing pilot to Bristol and Washington counties. Funding would support training and technical assistance to advance the expansion of affordable and permanent supportive housing in an effort to reduce poverty and inequity.

There are three Health Equity Zones in the state’s targeted areas: two in Bristol County ( Bristol and Warren ) and one in Washington County ( Hopkinton ).

Both counties represent “areas of opportunity,” the application to HUD stated, noting that Barrington and Mount Hope high schools in Bristol County and Exeter-West Greenwich, North Kingstown, South Kingstown, and Westerly high schools in Washington County are among the top 15 high schools in the state.

“These Counties also represent regions of significant employment and economic development, presently and in the near future,” the application added, citing the Quonset Development Corporation and University of Rhode Island as “significant economic and employment engines.”

The application to HUD noted that Bristol and Washington counties were “both identified by HUD as the priority geographies that have an acute need for housing.”

HUD’s PRO program aims to identify and remove barriers to affordable housing production, along with lower housing costs. Funding, McClain said, is given to communities actively addressing local housing barriers. She took note of Rhode Island’s progress over the past few years to spur more housing production through regulatory reform, housing tax credits, development financing, and housing bonds.

“You are setting the stage for new construction and housing opportunities and increasing housing production,” McClain said. “It is no secret that we’re facing a housing crisis in this country — for more than a decade the housing supply has not kept pace with the demand.”

That has certainly been the case for Rhode Island. A 2016 report commissioned by Rhode Island Housing found that the state needed to construct between 34,610 to 40,230 housing units over the next decade to keep up with the pace of demand. Only 18,000 new units were constructed as of February 2024, WPRI-12 reported .

The state ranked 38th in the nation in per capita net housing production, according to a 2023 report commissioned by the Rhode Island Foundation. The report also found Rhode Island was second to last among New England states when it came to per capita state spending on housing. Only New Hampshire ranked lower.

State law sets a goal for each municipality to have at least 10% of its housing stock considered affordable based on median income and housing costs. But only five of Rhode Island’s 39 communities actually meet this threshold, including Exeter in Washington County and East Providence in Bristol County.

The state’s grant application noted barriers that have led to production stalling include high construction and land acquisition costs, and inconsistent permitting processes. The housing department also wrote that negative perceptions can be the root of those other barriers.

“This often happens due to a lack of understanding of the potential net benefits for property values, the local tax base, and the potential methods of mitigating impacts such as traffic and school expenses,” the application read.

Negative perceptions, the application added, can lead to developer disinterest in investing time and money to try and develop any kind of new housing.

Acting Narragansett Town Planner Jill Sabo referred comment on the multi-family ordinance to Town Manager James Tierney, who did not immediately respond to a request. Sabo said the town is in the midst of conducting a housing livability survey — which is expected to be completed in September.

“We’re working on our end,” she said.

House Speaker K. Joseph Shekarchi, a Warwick Democrat, did not mention any municipalities by name in remarks he gave during Wednesday’s grant announcement.

“This is an excellent opportunity for municipalities to fully evaluate their housing policies and utilize this grant funding to develop affordable housing for all,” Shekarchi told Rhode Island Current.

“Many communities are working to increase housing production, while others need to step up,” he said.

Shekarchi said it is critical that local, state and federal leaders continue to collaborate to solve the state’s housing shortage.

“When we stop working together, guess what happens?” he said at the grant announcement. “Not much.”

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