The median price of a single-family home in Rhode Island was $440,000 in February, an almost 15% increase from a year earlier. The high cost of housing leaves many people on the outside of home ownership, looking in, squeezing out those with less money. So what will it take for the state to make more progress, and how long? This week, Ian Donnis goes in-depth with Rhode Island Secretary of Housing Stefan Pryor.
Transcript:
This transcript has been edited for clarity
Ian Donnis: Welcome back to the Public’s Radio.
Stefan Pryor: Thank you, Ian.
Donnis: We know how lots of money has been allocated for new housing in Rhode Island, but it seems as if relatively little new construction is taking place. Is this money getting out and being put to use quickly enough?
Pryor: It is, and I’m glad you’re asking that. 1600 units have been financed out of the federal monies that have already been through the competitive process with developers who are ready to go and already 407 units are under construction. That’s 26 percent already getting built. Now, we know that we need to go from hundreds getting built to thousands and beyond, and we’ve got to move rapidly and it’s happening. Thankfully, there’s a team at Rhode Island Housing working with the team at the housing department that’s working hand in hand with developers. We’re even creating a new subsidiary of Rhode Island Housing that will be involved with what we call proactive development, really navigating the process with developers to help them move even faster. So stay tuned for more on that. And we’re doing new rounds of funding allocation. We actually had a meeting this morning at Rhode Island Housing where we allocated some more money, and looking forward to May and perhaps June, we’re going to allocate millions more dollars to ensure that we’re getting more units going.
Donnis: A goal has been cited of creating 24,000 new units as the number that’s really needed to put the state in a better position as far as housing. How long will it take to create that amount?
Pryor: That’s not an amount that we’re pinning ourselves on. I will tell you that it takes a while to build housing. It takes a while to build housing. One of the things to keep in mind is that even if we had all of the towns in Rhode Island meet its mandate of 10 percent affordable housing, as a lower threshold for how much housing we need, statewide it would be over 8,000 units that would need to be created and keep in mind, Ian, that it takesa hundred fifty thousand dollars, two hundred thousand, some would estimate three hundred thousand in subsidy per unit to produce that kind of housing. So a couple things to take away from that. First of all, the price tag is significant over the many years going forward. Fortunately, Governor McKee has stepped up, like really no generation of leadership has in recent memory. We have a proposal for the largest housing dedicated bond in Rhode Island history, a hundred million dollars.
Donnis: Let me stop you there because we’ve got a lot of ground to cover. Advocates want to see that housing bond increased from one hundred million to one hundred fifty million dollars. Are you going to ask the governor to do that?
Pryor: I’m pleased that we have the very sizable bond proposal that we do have. The dialogue with the General Assembly and with advocates continues out of that. If we were to have a historically sized bond, one of my points is that would be generous and that would re-infuse these programs that are already working and getting projects into construction. I’m also pointing out, as everyone would say, including Governor McKee, it’s not the end point. It’s not enough.
We’ve got to do more. And it’s not just about money, Ian. It is about generating more money and dedicating it to housing to carry out more affordable housing production. Affordable housing requires tax credits or subsidies or a combination in order to write down those rents, in order to write down those costs. But it also is necessary that we activate the housing market in ways that don’t necessarily cost money, but in a way that makes sure that our local planning and zoning and permitting processes are moving more efficiently, less of a zigzag process, that we’re getting more housing production at every income level at every price point built.
Donnis: Well speaking of that, you’re seeing pushback from local communities, and this is not unique to Rhode Island and Massachusetts is experiencing the same issue, but we see pushback from Narragansett, even East Providence, a community that has been more welcoming to new housing. Are you frustrated by that level of pushback and what will be necessary to overcome it?
Pryor: Well, of course I’m frustrated. I’m also not surprised. We all know, you know, Ian, that there is some resistance. There’s some reluctance. Some of that is based in some mythology that has developed that we just haven’t disabused everyone of. That we just haven’t proven the opposite of. What do I mean? That school expenses are going to automatically go up if we build housing for families and that the taxes will not be equal to those expenses. Well, in fact, if you do the math in some of our communities where there’s declining enrollment right here in Rhode Island, in these communities, the taxes may eclipse the expenses on a per pupil basis for new students who may be added to the school system. So one of the things our housing department is gearing up to do is have these conversations with municipalities equipped with the math and we’re branching out right now. We’re having 39 conversations in 39 places. We actually were just in East Providence. We were recently in Smithfield. We’re all over the state having conversations about what would it take to help you produce the kinds of housing that you do desire, that you do think you need in your city or town.
Donnis: Beyond those conversations, are other carrots and sticks necessary to encourage communities to welcome more new housing?
Pryor: I do think so, and Ian, there are some models in the country for it. I’m not saying that any one of them is a perfect match for Rhode Island, but in Colorado and in New York, they’re doing something new, which is that they’re helping municipalities set goals. And municipalities, if they opt in and set such goals, are eligible for increased millions, even tens of millions of dollars of funding for the purpose of infrastructure at the municipal level, other kinds of subsidies and investments for housing purposes. So in New York, in the downstate, the area that’s proximate to the big city, you are required to have 1 percent growth per year over three years. Upstate, where you’re less close to the infrastructure, etc., it’s a smaller percentage per year that’s required. You can actually accomplish the same in three years. It’s that kind of thing. And in Colorado, they’re setting a base number and they’re having increments of growth and they’re tying funding to it. So I think that we’re having these conversations first, first Ian. We’re not settling in on a particular method, but we are doing, we’re listening to municipalities. What do they want to accomplish? Would resources help them? And could they help to set the goals that would set us on the right path?
Donnis: My colleague Nina Sparling recently reported on how federal COVID aid enabled the state to more than double the number of shelter beds since 2020, and how advocates are concerned with that money drying up the state lacks a concrete plan for compensating for that funding. Does the state have a plan?
Pryor: It does. The state is very vigorously involved with the conversation around what new funding can be found for this purpose. Governor McKee, to his credit, has been working, really for months, on whether there may be funds that can be cobbled together from unspent COVID era funding pools, whether there can be short term solutions on that basis, whether there can be longer term investments, more durable investments of funding for the purpose of homelessness. So please stay tuned. But the governor is working on some resource solutions.
Donnis: What do you say to the criticism that your department, the Department of Housing, and the state’s long standing Rhode Island Housing Agency are duplicative agencies that are battling and covering the same turf?
Pryor: Actually, on the contrary, we’re working together. In a way, the state as a government and the quasi public agency, Rhode Island Housing, better than ever before. Governor McKee and the Senate were very wise to nominate in this particular case yours truly, but the secretary to become the chair, the secretary of the department, to be the chair of Rhode Island Housing, so I do hold both roles and help to synchronize. That doesn’t mean everything is done in a lockstep manner. It means that there can be healthy debate and there can be different functions based upon a divide and conquer approach. But I think we’re working together better than ever.
Donnis: You’ve been part of state government for a long time, serving first under former Governor Raimondo, so I’ve got to ask you about the Washington Bridge. This is not your portfolio, but this is obviously a huge issue for Rhode Island. Patrick Anderson in the Providence Journal reported this week on how there were warning signs almost 10 years ago about problems with the bridge, and those were mostly put to the side. What do you say to Rhode Islanders who believe that this raises serious questions about the competence of state government?
Pryor: Well, I’m not going to weigh in on that particular issue, the issue of the bridge itself, just because it really is way outside of what I do and what I’m charged with. I will say this, I do think that Rhode Island has some problems that have been accumulated over decades. This is not the only aspect of the question of this particular bridge, the Washington Bridge. But I will say that speaking of bridges and infrastructure in Rhode Island, we’ve allowed decades to go by with under investment. I give credit to Governor Raimondo and Governor Mckee for stepping up with the Rhode Works program with COVID-era further investments and making sure that we are remedying our problems and the same thing applies to housing. We’ve allowed for decades for our funding levels to erode so that the rest of the New England region, with the exception of New Hampshire, which is a different story. Everyone has been out spending us on housing, exercising more leadership. But the positive thing is now there is leadership being applied and, sticking to my domain in housing, there’s never been more leadership on the issue from the governor to the speaker. Speaker Shekarchi has been exemplary. The same is true for the Senate president, Dominick Ruggiero. They’re stepping up legislation to fix this problem.
Donnis: Some advocates are backing a public developer model as a way of expanding the amount of housing. Where do things stand with that? Do you support that?
Pryor: We are studying it. We’re studying rigorously. So we’ve brought in the New York University center that’s responsible for real estate studies, and they, the Furman Center, are carrying out a study looking at models that are precedents. Montgomery County, Maryland is often cited, but there are also other universities, excuse me, other locations around the country that have carried out public developer style models. And there’s also other parts of the world, say Finland or Singapore, that have carried out social housing work. So we’re studying them and determining, Ian, number one, how do they work, do they work in general, and are their methods applicable or which elements might be applicable to Rhode Island. So when we see the results of that, we’ll be able to analyze even better.
Donnis: We’ve seen a couple of cases of egregious living conditions enforced by some property owners. Does that show that stronger tenant protections are required in Rhode Island?
Pryor: It might be the case. Yes, I do think so.
Donnis: Finally, the Superman building. I believe you’ve said that additional money is needed to bring that project to fruition. How much money? Where does that stand? And how would that affect the quantity of so-called affordable units?
Pryor: TBD on how much money. What we do know is that interest rates for all projects in the United States, and we certainly are no exception, they’re up and they’re warping these project budgets. So, one of the things that’s happened is that the federal government under President Biden has offered favorable rate financing for such projects, especially ones that are close to transit hubs. Even through USDOT, the United States Department of Transportation. So we’re in dialogue with them and with other federal agencies about whether better rates could be available for loaned dollars for projects like Superman. So we’re working with the project developer to see how much of the challenge could that heal.
Donnis: Rhode Island Housing Secretary Stefan Pryor, thank you very much for joining us.
Pryor: Thank you for having me, Ian.
Some benchmarks for children in Rhode Island are positive, like the high rate of insurance coverage. But the state child-welfare agency, the Department of Children, Youths and Families, has been making a growing number of disclosures about the deaths and near-deaths of young children. A coalition says these figures underscore the need for action. You can read more about that in my TGIF column, posting around 4 this afternoon on what used be known as Twitter at IanDon and at thepublicsradio.org
That’s our show for this week. Our producer is James Baumgartner. I’m Ian Donnis and I’ll see you on the radio.