Unions, public housing agencies want to see state build affordable units

A proposal for the state to build publicly owned social housing is drawing support from public housing authorities and trade unions.

"The for-profit private sector did not solve this housing crisis when interest rates were low and they are going to build even less now that rates are on the rise," the Rhode Island AFL-CIO stated in written testimony last week. "The nonprofit community development corporation [CDC] sector does important and necessary work building affordable units using tax credits but cannot build enough to solve the crisis on its own."

House Bill 6168, introduced by Rep. June Speakman, D-Bristol, seeks to address Rhode Island's housing crisis through what's sometimes called the "Montgomery County model" or the "public developer model."

It would create a $50-million revolving fund and direct the state's department of housing to "formulate a program for the development of housing units where a portion of the housing units are set aside from housing projects to ensure affordability," and to work with public housing authorities and other public agencies to build those housing units.

A related bill, House Bill 5978, lays out the nuts and bolts of how that would work. Also introduced by Speakman, it would create a land bank for certain unused government properties, and provide additional education funding as an incentive for communities that build affordable housing.

Supporters call for investment in public housing

"Publicly developed housing will be a boon to the state's economy, particularly if we enter another recession. that public investment should pay workers good wages because it's the right thing to do and because it will act as a stimulus during a recession," Reclaim Rhode Island, the progressive group pushing the state to adopt the public developer model, said in written testimony ahead of a House Finance Committee hearing on Wednesday.

"Too much of the state's occurring affordable housing — housing that is relatively affordable but unsubsidized by any government program — is in deplorable condition, rife with lead, leaks, and rodents," the group wrote. "Much is also at risk of being flipped by speculators and turned into housing for higher-income people."

Additional support for House Bill 6168 came from the RI SEIU State Council, the International Union of Painters and Allied Trades, the Rhode Island Building & Construction Trades Council, as well as several housing authorities — the Providence Housing Authority, Newport Housing Authority, Pawtucket Housing Authority and Coventry Housing Authority.

Peter Asen, deputy director of development and governmental affairs for the Providence Housing Authority, wrote that the agency is "currently working to build our capacity as an agency for development of new units of housing and redevelopment of existing housing, to help address the shortage of affordable housing across our state."

The Providence Housing Authority already owns and operates more than 2,600 low-income apartments, he noted, and is "currently working with a consultant who has assisted other PHAs across the country on development initiatives."

Community Development Corporations seek a piece of the pie

The bills received some pushback from One Neighborhood Builders and the Housing Network of Rhode Island, which both stated that community development corporations should be eligible for the funds.

"Nonprofit developers are currently responsible for the overwhelming majority of the affordable housing development across the state and have numerous projects in their pipeline that could benefit from this new resource," wrote Jennifer Hawkins of One Neighborhood Builders.

Both organizations stated that they liked certain aspects of the bills, such as the way they would reduce barriers to development.

House Bill 5978, however, "proposes a swatch of structural and policy changes that would have a range of implications on the way affordable housing is developed in Rhode Island," wrote Melina Lodge, the executive director of the Housing Network of Rhode Island. "At this point in the juncture, it is unclear what consequences, positive or negative, such changes would have on improving the production of housing."

Lodge suggested that the proposal needed more vetting, and said expanding the state's ability to "acquire property and facilitate development through a public bidding process" would be a "more appropriate role ... than being in the business of developing and owning residential property."

How would it work?

An estimated 750 units of housing would be created in the first cycle of a $50-million revolving fund, according to an analysis by Paul Williams of the Center for Public Enterprise.

House Bill 6168 would authorize the Department of Housing to issue 20-year bonds in order to create that fund.

Within each housing development, 20% of units would be designated as "affordable housing" for households earning 50% or less of the area media income. Another 10% would be affordable for households earning 80% or less of the area median income.

The remaining apartments would be rented at market prices, which would help to subsidize the "affordable" units, and also ensure that residents are not segregated or ghettoized, supporters say.

Under House Bill 5978, all public bodies would be required to inventory the real estate that they're not currently using.

If a public body has no plans to use a piece of real estate within the next 10 years, they would be required "to enter into a negotiation with the department for the transfer for the parcel to the land bank." If a sale price can't be agreed on, the bill states, a panel of real estate appraisers would be consulted.

The legislation lists 22 types of real estate that would be exempt, including any that are located in flood zones, in the capitol district in Providence or at the John O. Pastore Center in Cranston.

Completed housing projects, if sold, could only be offered to first-time homebuyers who plan to live there full-time.

The bill would also strip authority from communities that have not met the state's 10% affordable housing goal by July 1, 2026. Any affordable housing projects planned in those communities would no longer need the municipality's approval, and instead would seek approval from the Department of Housing.

Additionally, the bill would direct the Department of Housing to "administer a program for the protection and improvement of existing multifamily housing" and authorize the department to purchase multifamily residences "to ensure that previously operational, but currently closed multifamily housing units are brought back to the market and that endangered multifamily housing units are not closed or lost."

That could include properties that are in receivership, bankruptcy or foreclosure, or have building code or fire code violations, the bill states. It could also include "properties in high market rent areas where consolidation of multiple units into a single unit are threatened."

Ahead of Wednesday's hearing, supporters said that state intervention in the housing crisis was desperately needed.

"I have seen families with young children go through the whole winter with their kitchen stove as the only source of heat," wrote tenant organizer Shana Crandell. "I have known a family whose pet chinchilla was eaten by rats the size of possums. ... The private rental market will never solve the housing crisis. It cannot, because its aim is profit and not the well-being of people."

This article originally appeared on The Providence Journal: Public housing agencies want to see RI build its own affordable units