Despite efforts, affordable homes continue to remain out of reach for many Rhode Islanders“The Out of Reach report continuously shows that the disconnect between the housing wage and the cost of housing is too real for many Rhode Islanders,” said Brenda Clement, Director of HousingWorks RI.
Published on July 14, 2021
The following is a press release and not an Uprise RI-written news story.
National Low Income Housing Coalition released the 2021 Out of Reach report today, which shows that affordable rental homes continue to remain out of reach for average Rhode Islanders. The “Housing Wage” in the Ocean State remains one of the highest in the country, coming in at number seventeen. Regionally, Connecticut (10th), Massachusetts (3rd), and Vermont (16th) maintained their ranking of the most expensive two-bedroom housing wage over the past year. Maine (25th to 24th), New Hampshire (15th to 13th), and Rhode Island (19th to 17th) saw an increase in ranking. All New England states continue to remain in the top twenty-five for unaffordability.
This year, Out of Reach is being released 16 months into a devastating pandemic, which has created enormous suffering. In addition to the lives lost, COVID-19 also created an economic crisis that pushed millions of low-wage workers out of work. The public health crisis is not over, but as the country begins to imagine life after COVID, it is imperative that we also address the profound economic fallout for the lowest-income and most marginalized members of our communities. Prior to the pandemic, more than 7.6 million extremely low-income renters were already spending more than half of their limited incomes on housing costs, sacrificing other necessities to do so. After a year of job losses, furloughs, and limited hours, many of these households are even worse off in spite of federal relief efforts including stimulus funds and extended unemployment.
During these unprecedented times, Rhode Island has seen a landmark year for housing at the State House. With proposals supported by Governor Daniel McKee and House and Senate leadership, this year the Rhode Island General Assembly passed legislation creating a dedicated funding stream for affordable housing, prohibiting housing discrimination based on source of income, and establishing the first of its kind pilot program to bring 125 vouchers to provide supportive housing to chronically homeless individuals. Additionally, Rhode Island voters approved a $65 million Housing Opportunity Bond in March to build and rehabilitate affordable homes and revitalize communities. These important investments and renter protections move us in the right direction towards our housing goals. But as the Out of Reach report indicates, we have far to go to truly meet the need.
The National Low Income Housing Coalition (NLIHC) is a Washington, DC-based housing advocacy group. Brenda Clement, Director of HousingWorks RI at Roger Williams University, who completed a nine-year term on the NLIHC board, with three as chair, observed:
“The Out of Reach report continuously shows that the disconnect between the housing wage and the cost of housing is too real for many Rhode Islanders. Year after year we similarly see the challenge of securing safe, affordable housing presented in the Housing Fact Book. According to the 2020 Housing Fact Book, a Rhode Island household earning the state’s median renter household income of $34,255 could not affordably rent in any city or town. In order to afford the two-bedroom Fair Market Rent for Rhode Island in Out of Reach, a household must earn $46,885 annually. Although this figure is a step up from the state’s median renter household income, it only provides Rhode Island renters one municipality (Burrillville) where they can afford to rent, further emphasizing the struggle to find affordable rental housing.”
According to the Out of Reach report:
- In Rhode Island, the Fair Market Rent (FMR) for a two-bedroom apartment is $1,172 (up from $1,101 in 2020). In order to afford this level of rent and utilities – without paying more than 30 percent of income on housing – a household must earn $3,907 monthly or $46,885 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly Housing Wage of $22.54 per hour (up from $21.16 in 2020).
- In Rhode Island, a minimum wage worker earns an hourly wage of $11.50 (up from $10.50 in 2020). In order to afford the FMR for a two-bedroom rental home, a minimum wage earner must work 78 hours per week.
- In Rhode Island, 39 percent of Rhode Islanders are renting with a total of 160,997 renter households. The estimated average wage for a renter is $14.24 (an increase from $14.21 in 2020), which is more than $8 less than the wage needed to afford a modest 2-bedroom apartment.
For these lowest income households, choices often have to be made as noted by Caitlin Frumerie, LCSW, Executive Director of The Rhode Island Coalition to End Homelessness:
“Last night we had approximately 1,281+ Rhode Islanders experiencing homelessness, a shocking 485 (including 34 families with children) of whom were sleeping outside or in their cars. This is the legacy of our community’s underfunding of affordable housing in Rhode Island for decades. A legacy that will only become bleaker as the tsunami of evictions washes onto our shores after the eviction moratorium ends at the end of this month. We are grateful that the Governor and General Assembly have taken notice of these inequities and passed a budget that includes a modest dedicated funding stream for affordable housing, in addition to the Building Homes Rhode Island Bond. However, given the herculean size of the crisis, a herculean and expedient solution is needed. We need to substantially invest in affordable housing for low- and no-income Rhode Islanders. We can no longer accept this housing crisis as irreparable—we must do better for the people of Rhode Island.”
The report reaches several key conclusions:
- Low-wage workers struggle to afford their homes in both good and bad economic times
- Wage growth has been slow for the lowest-wage workers for decades. Results from the Current Population Survey indicate that, between 1979 and 2019, inflation-adjusted hourly wages grew just 6.5 percent for the lowest-wage (at the 10th percentile) workers and 8.8 percent for median-wage workers.
- Decent rental housing is unaffordable for most low-wage workers
- While wages have been stagnant or slow to rise, rents continue to climb. In 45 states and the District of Columbia, median gross rents increased faster than median renter household income between 2001 and 2018 (Mazzara, 2019). In no state, metropolitan area, or county in the United States can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week. In only seven percent of all U.S. counties (218 counties out of more than 3,000 nationwide, not including Puerto Rico) can a full-time minimum wage worker afford a one-bedroom rental home at fair market rent.
- Housing unaffordability for low-wage workers disproportionately impacts people of color
- The unaffordability of the rental market disproportionately harms Black and Latino households, because they are more likely at all income levels to be renters. In 2019, 28 percent of white households were renters, compared with 58 percent of Black households and 54 percent of Latino households (Census, 2020). Historical and ongoing discrimination has limited opportunities for homeownership for people of color, and a large racial wealth gap makes it more difficult for people of color to become homeowners. Additionally, renters of color are at greater risk of eviction and need rapid assistance to erase rent arrearages and stay housed. Rhode Island’s emergency rental assistance program, Rent Relief RI, has approved about seven percent of applications submitted to date, and continues to make improvements to release funds quickly to support landlords and tenants statewide.
- Shortage of affordable rental homes for low-income households is not new
- Prior to the pandemic there were only 37 affordable and available rental homes for every 100 renter households with extremely low incomes (NLIHC, 2021b), and every state and nearly every county in the U.S. lacked an adequate supply. As a result of this shortage, 85 percent of extremely low-income renters could not afford their rent, and 70 percent were spending more than half of their incomes on housing costs. According to NLIHC’s The Gap report, released in March of this year, Rhode Island has a deficit of 21,678 affordable and available rental units at or below extremely low income, and 19,684 at or below 50 percent AMI.
The report recognizes the need for states and communities to invest in in strategies to increase the long-term supply of affordable homes. The Housing Network of Rhode Island (HNRI) is the professional association of the state’s non-profit housing developers. HNRI Executive Director Melina Lodge remarked:
“Every Rhode Islander should be able to afford a safe, decent and healthy home, but the Out of Reach report demonstrates that this is not the case. What it shows is that an affordable home is totally out of reach for at least 40 percent of Rhode Island households. It’s an important reminder why federal and state programs that support affordable development and preservation are so critical. The recent passage of a dedicated funding stream for affordable housing in the state budget is a significant advancement, and we’re thankful to Governor McKee and the General Assembly for their leadership. Now, with extraordinary federal resources available to support our state’s economic recovery from COVID, we hope that decision-makers will use funds to promote housing stability, invest in affordable housing development, and support healthy homes and infrastructure.”
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