The Rhode Island Coalition for the Homeless brings to our attention a report from the National Low Income Housing Coalition which shows the relative affordability of Rhode Island rental units continues to decline.
Rhode Islander Renters Face Record High Levels of Rental Unaffordability
National Study Shows Rhode Island Rentals Remain Unaffordable
Providence-A new national report released today shows that despite the economic recovery that is beginning to take hold nationally, affordable rental housing remains out of reach for average Rhode Islanders. Rhode Island continues to have one of the highest rental costs in the country, coming in at number fourteen. Three other New England states, Massachusetts, Connecticut and New Hampshire, also remain in the top fifteen for unaffordablity. Hawaii had the highest rental costs in the country, Puerto Rico the lowest.
Additionally, the report highlights the growing housing cost burden shouldered by Rhode Islanders. Rhode Island was 2nd in the country, only behind Hawaii, with the highest percentage growth of the two-bedroom housing wage with a 68% increase from 2000-2011. This growth indicates the increase in what someone needs to earn to be able to afford a two-bedroom apartment at the Fair Market Rent (FMR).
The report, Out of Reach 2011, was released by the National Low Income Housing Coalition (NLIHC), a Washington, DC-based housing advocacy group. The report provides the Housing Wage and related data for every state, metropolitan area and county in the country. This year’s data demonstrates that the impact of the recession has only worsened an already severe housing crisis with the persistence of high rates of unemployment and under-employment making it more difficult for families to secure decent housing. The report highlights that low-income renters continue to face a large array of housing challenges and that prevailing incomes and wages are simply not enough to allow a family to afford a decent home in their community.
Out of Reach is a side-by-side comparison of wages and rents in every county, Metropolitan Area (MSAs/HMFAs), combined nonmetropolitan area and state in the United States. For each jurisdiction, the report calculates the amount of money a household must earn in order to afford a rental unit at a range of sizes (0, 1, 2, 3, and 4 bedrooms) at the area’s Fair Market Rent (FMR), based on the generally accepted affordability standard of paying no more than 30% of income for housing costs. From these calculations the hourly wage a worker must earn to afford the FMR for a two-bedroom home is derived. This figure is the Housing Wage.
According to the report:
- In Rhode Island, the Fair Market Rent (FMR) for a two-bedroom apartment is $996 (Up from last year’s figure of $983). In order to afford this level of rent and utilities, without paying more than 30% of income on housing, a household must earn $3,321 monthly or $39,853 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $19.16 (Last year it was $18.90).
- In Rhode Island, a minimum wage worker earns an hourly wage of $7.40. In order to afford the FMR for a two-bedroom apartment, a minimum wage earner must work 104 hours per week, 52 weeks per year. Or, a household must include 2.6 minimum wage earner(s) working 40 hours per week year-round in order to make the two bedroom FMR affordable.
The report states, “In this environment, more than ever, Out of Reach underscores the fundamental mismatch between the wages people earn and the price of decent housing within our communities. The recession has indeed caused greater housing hardship, but in fact, the failure of this country’s housing system to produce sufficient affordable housing is itself at the root of the crisis.”
The release of the report raises serious concerns for the affordable housing community as it comes at a time when the foreclosure and unemployment crisis continues to hit Rhode Islanders particularly hard. A recent HousingWorksRI study found that Rhode Island’s foreclosure rate ranks in the top ten in the country and is the highest in New England. Additionally, Rhode Island has one of the highest unemployment rates in the nation. Advocates have seen first-hand how the unemployment and foreclosure crisis have exacerbated the barriers low income renters have encountered in their search for safe, quality, affordable housing.
For the first time since the Great Depression, more than half of all American renters lived in unaffordable housing in 2009. A recent Rhode Island Housing report found that, here in Rhode Island, 50% of renters spend more than 30% of their income on rent.
“This report verifies what we are seeing day to day here in our state,” stated Brenda Clement, Executive Director for Housing Action Coalition of RI. “Despite the national trumpeting of a recovery, what we see on the frontlines is more and more Rhode Island families struggling to remain in their home or find an adequate, safe and affordable place to live.”
Despite the growing need, housing assistance programs are at risk by proposed budget cuts at the federal level and locally in states and cities and towns around the country. Advocates state that given the current environment, the Housing Wage in the Out of Reach 2011 report underscores the fundamental mismatch between the wages people earn and the cost of safe, quality affordable housing in our communities.
The report highlights, for homeless prevention and affordable housing advocates, the need for policymakers to invest in strategies that will ensure a long-term supply of affordable
housing in Rhode Island. This year at the State House affordable housing advocates are
working to ensure that the Neighborhood Opportunities Program (NOP) is adequately funded and that legislators establish a dedicated funding stream for affordable housing.
Rhode Island is one of only nine states in the country without a dedicated stream of funding for affordable housing.
NOP is the state’s most critical program for ending homelessness and developing affordable housing. NOP is the only state funded program that subsidizes the cost of affordable rental housing for very low-income families and individuals with disabilities. The program provides funds to cover the difference between the rental cost affordable to very low-income Rhode Islanders (generally 30% of their income) and the actual operating cost to owners.
Advocates contend that funding NOP is particularly important this year as our state continues to recover from the foreclosure, employment and economic crisis. They argue that a cut in the funding will only worsen the affordable housing and homeless crisis the state faces.
Jim Ryczek, Executive Director of the Rhode Island Coalition for the Homeless added, “This report reminds us why the state programs that support affordable housing and homeless prevention are so critical. Now, more than ever, we need our elected officials to act boldly to prevent more Rhode Island residents from slipping into homelessness.”
“The Out of Reach Report 2011 reminds us that the most vulnerable renters, those with special needs and the very lowest incomes, are at the greatest risk,” commented Michelle Brophy, Director of New England Program-Corporation for Supportive Housing. “That is where we, as a state, need to direct our resources and energy.”
Established in 2001, the Neighborhood Opportunities Program is a unique state-funded program that subsidizes the cost of affordable rental homes in Rhode Island. Since its inception NOP has funded the acquisition, new construction, and/or rehabilitation of 1188 housing units in 28 Rhode Island cities and towns.
This includes the production of family housing, permanent supportive housing, and homeownership opportunities. These housing units are located at sites that contain a total of 2525 affordable housing units.
NOP has also contributed $44 million in gap funding for the development and operation of 1188 units. This investment has leveraged $418.3 million, or $10 for every dollar invested by the State of Rhode Island.
“For the past ten years NOP funding has allowed the CDCs (Community Development Corporations) and other affordable housing developers to provide high quality, affordable housing to residents of our state,” explained Chris Hannifan, Executive Director of the Housing Network, the state’s association of CDCs. “NOP is a crucial component that ensures the continuum of affordable housing that is needed in our state.”
The full report is available from the National Low Income Housing Coalition