PROVIDENCE – If all goes well in November, Rhode Islanders will pass a $40 million Housing Opportunity Bond, which will play a crucial role in meeting the demands for new housing construction in the state, projected to be between 34,600 to 40,200 new housing units by 2025, according to a new study.

Details of the comprehensive study, conducted by HousingWorks RI and commissioned by Rhode Island Housing, were discussed at an embargoed briefing for the news media on April 5, in advance of its official release the next day.

Even with the investment of the new bond to alleviate the lack of housing in Rhode Island, the numbers are daunting:

• There will be a projected 12 percent to 13 percent increase in the number of households in Rhode Island in the next 10 years, driven by a growing population and a simultaneous decline in household size attributed to both lower birth rates and an aging population.

• Nearly all of the new households are projected to have incomes below 120 percent of the Area Median Income, which was $89,300 for a family of four in FY 2015. This is a result of the fact that the populations projected to grow also tend to have lower incomes – seniors, millennials just starting their careers and burdened by college debt, and persons of color.

• Housing affordability problems have expanded to become a “mainstream” affliction, with about 40 percent of all households in Rhode Island, some 164,740 households, found to be “cost burdened,” paying more than 30 percent of their income for housing. Almost half of those households, some 78,795, were found to be severely cost burdened, paying more than 50 percent of their income for housing. Not surprisingly, cost burdens grew at a faster rate for low-income elderly households.

• Reinforcing the reality that Rhode Island has struggled to recover from the housing and economic recession that began in 2007 is the fact the state has ranked last in the nation for the last five years in residential building permit activity. “The good news,” said Barbara Fields, the executive director of Rhode Island Housing at the briefing, attempting to put an optimistic frame on the numbers, “is that Rhode Island has nowhere to go but up.”

• In terms of the demands for new housing over the next 10 years, based on a 3 percent status quo population growth rate, it will require some 34,610 new units of housing to be constructed – estimated to include 25,267 rental units and 9,343 owner units. Under the stronger growth scenario, based on a 5 percent population growth rate, it will require some 40,231 new units of housing to be constructed – estimated to include 28,220 rental units and 12,011 owner units.

Translated, that would require, for the status quo growth, an average about 3,500 new units of housing a year to be built over the next 10 years; for the stronger growth scenario, that would be an average of about 4,000 new units of housing a year to be built over the next 10 years. Yet, over the last five years, new residential construction permits have hovered under 1,000 a year. That appears to be a significant gap.

Demographic changes will also serve as an strong influencer on future housing needs and the kinds of housing units that are built – both for seniors and millennials.

“For the millennials, for people who were born between 1981 and 1997,” explained Fields, “they are waiting longer to marry, they are waiting longer to have children, and they are burdened by student debt.”

When two-thirds of students who graduate from Rhode Island colleges and universities have significant student debt, she continued, “and the average size of that debt will be more than $32,000, this directly impacts on what they can afford to spend on housing.”

Addressing the gap
The new $40 million Housing Opportunity Bond will go a long way toward helping to address the gap, but housing advocates had hoped that Gov. Gina Raimondo’s budget would have included $100 million for the bond, given the dramatic housing needs for the state.

There is some hope that the R.I. Senate may increase the bond amount to $50 million, but even then, Rhode Island dramatically trails its neighbors in terms of investments in housing.

In FY 2016, Massachusetts spent $99.72 per capita on housing, Connecticut spent $76.88 per capita on housing, Vermont spent $52.49 per capita on housing, Maine spent $18.03 per capita on housing, while Rhode Island spent only $8.46 on housing.

Another significant gap is in the construction of affordable housing units in Rhode Island, which fell to 152 units a year from 2013 to 2015, due largely to funding cuts at the federal level, according to the HousingWorks RI study.

Another key factor is the age of existing housing stock: Rhode Island’s housing stock is the fourth oldest in the nation, with 33 percent built before 1939 and 43 percent built between 1940 and 1979. “Older housing is more likely to have lead paint or be in poor condition, which can lead to a range of health issues,” the report said.

One of those health conditions, the report continued, was the way that inadequate housing in Rhode Island can contain numerous asthma triggers. “More than 112,000 Rhode Islanders have asthma, and asthma-related emergency rooms visits in the state have averaged from 60 to 68 visits per 10,000 individuals per year,” a major health cost burden.

With lead poisoning, the report said that 8.5 percent of the children entering kindergarten in Rhode Island in the fall of 2015, or 935 children, had a history of elevated blood lead levels, putting the children at risk for severe health and behavioral consequences.

Clearly, in terms of the economics, healthy, safe, affordable housing becomes a critical factor in driving future prosperity in the state and creating a thriving economy.

What comes first, the job or the place to live?
At the briefing, the presentation began with an overview of the Governor’s and the R.I. General Assembly’s efforts: to attract new companies, to grow existing companies, to launch an unprecedented number of new economic development programs, with “a laser-like focus.”

The presentation listed many of the new programs, including: Rebuild Rhode Island Tax Credits, Anchor Institution Tax Credit, Small Business Assistance Program, Innovation Network Matching Grants, Qualified Jobs Incentive Tax Credits, Innovation Vouchers, and Industry Cluster Grants, among others.

It also listed the effort to grow Rhode Island’s talent pool under the Raimondo administration, to attract new workers under the Wavemaker Fellowship, Real Jobs Rhode Island, the P-Tech Program, and the Ocean State Grad Grant.

The reality, however, is that all those new workers, if successfully recruited to take jobs in Rhode Island, may find it difficult to find a place to live, given the housing shortage. [Although the housing market may not be as constrained as that in Greater Boston.]

In talking after the presentation with Richard Staples, the interim Director at HousingWorks RI, and Jessica Cigna, the research and policy director at HousingWorks RI, ConvergenceRI asked about the need to connect housing with economic development as a strategy.

“It’s about meds, eds and beds,” Cigna said.