Innovation Ecosystem

Speaking the hard truths about housing

More money is needed to make homelessness rare, brief, and nonrecurring

Photo courtesy of Jennifer Hawkins

Jennifer Hawkins, the president/CEO of ONE Neighborhood Builders.

By Jennifer Hawkins
Posted 11/27/23
Jennifer Hawkins explains why the development of affordable housing requires patience, fortitude, better financing and a willingness to challenge the status quo.
When will Rhode Island find a way to celebrate the enormous talent and vision of its women leaders such as Jennifer Hawkins, whose leadership has helped to transform the city’s landscape? What are the opportunities to expand on the public budget participation in voting on health projects in city neighborhoods, pioneered this past year? Would it be appropriate for the city of Providence to highlight the work done by ONE Neighborhood Builders with new signage celebrating the community development corporation’s successes? When will the General Assembly act on OHIC’s proposal to raise Medicaid rates for providers by $45 million?
The impressive list of ONE Neighborhood Builders successful innovative approaches to the community development could easily become a case study of what can be done to improve the health and quality of life in urban neighborhoods.
There are the numerous affordable housing projects, including the five small net-zero homes known as Sheridan Square; the launch of a wire mesh WiFi system to help heal the digital divide in Olneyville; serving as the convener of the Central Providence health equity zones; the linking of childcare centers with place-based affordable housing; the launch of a community small loan program to support local businesses; and the use of eight pre-fab homes on Bowdoin Street, a site that had been ravaged by a fatal fire in 2018. Are you listening, Brown? Or Harvard? Or Hampshire College?

PROVIDENCE – Financing affordable housing is complex. I recently shared some observations on the “nuts and bolts” of affordable housing development at the R.I. House of Representatives’ Special Commission to Study Housing Affordability.

I’ve been surprised that people have reached out to learn more, or to thank me for the fairly legible explanation of Low Income Housing Tax Credits and how this crucial source of financing is leveraged to develop rental housing.

My punchline: Rhode Island’s recent land use reforms and the general enthusiasm for loosening restrictive zoning for multi-family development is laudable, and so we must complement these advancements with consistent investment in affordable housing development that is commensurate with the verifiable need.

Pulling back the curtain    
During the presentation, I summarized the myriad of capital sources it takes to develop affordable housing, and I pulled the curtain back on why there’s such a protracted timeline.

For example, Center City Apartments – the $57-million, 144-unit development ONE Neighborhood Builders is developing with Crossroads, Family Service of Rhode Island, and Foster Forward – will include 21 different sources and, assuming the best-case scenario, will break ground 33 months after first obtaining site control of the land.

While there is room for shrinking the “capital stack” and consequently, the development timeline, turning dirt into high-quality affordable housing takes time; and most certainly more time than market-rate housing that is not constrained by federal compliance necessities. 

The $250 million investment of federal pandemic recovery funds in affordable housing was indeed historic, and Rhode Island has been prudent and impactful with its use of these dollars.

It should be noted that just $161.5 million was designated for housing production and preservation. The remaining funds went to down payment assistance for homebuyers, emergency homeless response, and other initiatives – important, worthy, and life-changing programs,  but not affordable housing development.

It is predicted that all the housing production and preservation funds [$161.5 million] will be fully obligated by the middle of 2024. A question many observers are asking is: How much development capital will be available after the middle of 2024 to complete projects that are in the pipeline? 

Rolling the dice on risk
Builders require predictability to take on risk. Risk comes in the form of buying property and paying for the legal, architectural, and engineering work necessary to obtain municipal land-use approvals. That risk is muted when affordable housing capital [debt, equity, and grants] is accessible to bridge the gap between what it costs to build and operate an apartment community and what low-income households can afford to pay in rent.

If housing capital is widely known to be extraordinarily difficult to obtain, builders won’t take on the risk; they will either build elsewhere or build something different.

Here’s a point I did not share during my comments to the Commission: For a long time, the only folks wacky enough to take on that risk were mission-based community development organizations.

For decades ONE Neighborhood Builders and my colleagues – all of whom are members of the Housing Network of Rhode Island – were generally the only builders developing affordable housing for low-income families.

It’s heartening to see for-profit affordable housing developers now working in Rhode Island, but there’s no secret as to why that is: Rhode Island has mitigated their risk through increasing the availability of affordable housing capital [and now too, making zoning less convoluted].

Rhode Island has made tremendous progress these past few years. There is now widespread understanding that housing is the most salient social determinant of health.

With the infusion of affordable housing capital, builders are ramping up development projects. And, with the establishment of the Department of Housing, Rhode Island will have the capacity to implement a coherent statewide effort to make homelessness rare, brief, and nonrecurring.

In the housing development world, it is widely agreed that stasis is going backwards.

Jennifer Hawkins is the president and CEO of ONE Neighborhood Builders.

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