Governor McKee Highlights 2023 Housing Accomplishments

Published on Friday, December 29, 2023

PROVIDENCE, RI – Governor Dan McKee today reported the year-end housing accomplishments achieved by the Rhode Island Department of Housing and its partners in 2023. This year, significant strides were made putting new federal resources to work, and we’re already seeing results. Progress in 2023 included production and preservation of affordable homes; making homeownership a reality for more Rhode Islanders; establishing new programs to support cities and towns in their efforts to advance and approve new development; addressing homelessness through prevention programs and expansions of emergency shelter options; and building out the new Department of Housing.

"Our administration continues to elevate our commitment to expand housing options for all Rhode Islanders,” said Governor Dan McKee. “Having a home is the foundation for stability and success. Our housing development programs are being implemented to get new development going in all parts of our state.”

Primary achievements in 2023 include early work to establish a new Department of Housing, allocating resources through the historic $250 million in funding devoted to housing, and advancing further investments through securing a new commitment of $101.5 million in the FY 2024 budget. The Department of Housing is now staffing up and looks forward to being at full capacity in new offices in early 2024. While the Department of Housing is newly eastblished, Rhode Island Housing and Mortgage Finance Corporation (RIHousing) celebrated its 50th anniversary of work and leadership. They launched several new programs in 2023 and stewarded a significant increase in resources.

Ongoing expansion of housing opportunities through the administration of $321.5 million in federal State Fiscal Recovery Funds that Governor McKee and the legislature directed to housing and homelessness programs in Rhode Island has been a key feature of progress in 2023. This includes funding for the production and preservation of affordable housing, homeless assistance programs and down payment assistance for homebuyers.

"This year, our Department got started on its work in earnest,” said Secretary of Housing Stefan Pryor, who serves as Chair of Rhode Island Housing. “Our housing challenges have accumulated for decades. Though we won’t solve our problems overnight, we are making progress every day. We have created new tools for municipalities and developers, and we have deployed federal dollars for housing development across our state. We have momentum to build upon as we enter the new year. Working with our partners, we will take even more steps forward in 2024 – and build the foundation for yet more progress into the future.”

“We’ve made great strides this year in increasing housing opportunities in Rhode Island,” said Carol Ventura, CEO of RIHousing. “Especially in the development of affordable housing, it’s been gratifying to see how many communities have had events celebrating the start and completion of new development. Every new development we finance and program we administer means more Rhode Islanders finding homes. This year marks 50 years since the General Assembly created RIHousing, and through our continued partnership with state leaders, developers, and community agencies, we’ll keep working to meet the housing needs of Rhode Islanders for decades to come.”

The establishment of the Rhode Island Department of Housing as a fully authorized cabinet-level department as of July, marks a significant milestone for Rhode Island. This move underscores a strategic shift toward prioritizing housing solutions. Creating a Department of Housing positions Rhode Island for success through coordination of State housing efforts. The state aims for better orchestration of programming and activities, as well as a more comprehensive approach that will address housing challenges effectively, increase home production, improve housing accessibility, and expand affordability across Rhode Island.

Housing Production

In recent years, Rhode Island has had one of the lowest housing production rates in the nation. Our state is now redoubling efforts in order to address this situation. New resources already discussed are making a tremendous impact. In 2023, Rhode Island saw an influx of new housing in the pipeline with 37 development projects approved by RIHousing, which will result in 2,252 units of housing. Seven of the developments are preservation projects for 527 affordable units and the rest are the new construction of 1,725 units, of which 1,374 will be affordable homes. Municipalities that will have new or preserved housing include Providence, Portsmouth, Woonsocket, Tiverton, Central Falls, East Providence, East Greenwich, Smithfield, Jamestown, Newport, Johnston, North Kingstown, Coventry, Middletown, Westerly, and Lincoln. Most of these developments will serve Rhode Islanders who make at or below 80% of the Area Median Income, which translates to a family of three making $73,750 annually in most parts of the state.

529 new homes, financed in part by RIHousing, became ready for occupancy in 2023, a spectrum of new, preserved, low-income and middle-income rental units as well as homeownership-specific homes. 11 municipalities had ribbons cut on completed developments this year: Providence, Bristol, Warren, Woonsocket, East Providence, North Providence, Warwick, Exeter, East Greenwich, Pawtucket, and Middletown. Additionally, there will be even more projects receiving funding in 2024. In November a third Consolidated Funding round was announced that will award more than $90 million for the development, preservation, and operation costs for affordable housing; over $65 million of those resources are State Fiscal Recovery Funds. The consolidated application allows interested development partners to apply to multiple funding sources at once. Applications are due by January 16, 2024.

In 2023, the Department of Housing received authorization for new tools and programs to improve available housing for Rhode Islanders, notably including a new state-level low-income housing tax credit (LIHTC). Until 2023, Rhode Island was one of only two Northeastern states without a state-level program to match and support investments from the federal LIHTC program. Around the nation, state LIHTC investments have successfully leveraged additional federal resources and closed financing gaps needed to finalize development proposals and get work started for new housing production. The new program provides tax credit financing to developers through a competitive process and is capped at $30 million annually. With this new tool in Rhode Island’s housing toolbox, our state has expanded its ability to produce new affordable homes.

An additional new tool for development is the Priority Projects Fund, established with $27 million in initial funding, this fund will support projects that are difficult to complete with conventional financing. The Priority Projects Fund will have a special emphasis on vulnerable Rhode Islanders such as lower income Rhode Islanders, older adults, people with disabilities, and veterans.

Housing is the largest expense in the average Rhode Island household budget, and the next most costly item is transportation. Pursuing housing development alongside bus, rail, and bike infrastructure assures cost efficiency in future new development. The Department of Housing is now developing a pilot program to support the development of affordable homes in areas well-served by public transit. Transit-Oriented Development (TOD) initiatives have proven an effective model for promoting new home construction and revitalizing downtowns, main streets, and town centers by creating compact, walkable, pedestrian-oriented communities centered around transit nodes that support vibrant, sustainable, and equitable development. Regulations for this new program are in development now. 

To support municipalities in getting potential projects approved, RIHousing in 2023 launched a Municipal Technical Assistance Program which will assist cities and towns as they bring their documentation and planning processes into conformance with newly passed legislation meant to streamline the development process. The technical assistance program includes the production of template resources and examples to boost cities and towns as they adjust to new standards. Further support for planning efforts at cities and towns will soon be available through the establishment of a $1.4 million municipal fellows program that will provide staff support in planning departments.

Beyond funding development proposals, this past year included an important step forward in bolstering state agency participation in the development process. We are establishing a Proactive Development Entity as a new tool for pursuing increased housing development. Being created as a subsidiary of RI Housing and with startup funding from the General Assembly, the Proactive Development Entity will help developers, public housing authorities, and other partners develop needed housing – providing our state with a new mechanism for improving our low home production rate. 

Additional new support for municipalities has been secured in the form of a $4.3 million investment in infrastructure related to housing development. For many cities and towns, saying yes to a housing development might require new sewer or electrical connections or the extension of a roadway. The Rhode Island Infrastructure Bank is administering this essential tool, which will eliminate some of the barriers to housing development throughout the state.

To support low-income renters, RIHousing has approved more than $8 million in funding from the Public Housing Authority Program to support substantial improvements and redevelopment in public housing properties in Pawtucket, Newport, and Narragansett.  

In 2023, the Department of Housing obligated $3 million to municipalities through the Community Development Block Grant (CDBG) program. CDBG funding plays a crucial role in supporting local communities by providing financial assistance for various development projects, including affordable housing and infrastructure improvements. These funds will serve as a vital resource to address the unique needs of specific communities, revitalizing neighborhoods, and improving the quality of life for residents across diverse regions.

Expanding Homeownership

The Department of Housing and RIHousing highlights for 2023 include expanding access to homeownership and addressing disparities in access to homeownership, which continues to be a focus of the Administration. The Statewide Down Payment Assistance (DPA) Grant program, launched in January 2023, used $30 million of federal State Fiscal Recovery Funds set aside for housing by Governor McKee and the General Assembly to offer $17,500 in down payment and closing cost assistance to first-time homebuyers via RIHousing. The DPA program closed in October 2023 to new applicants. As of November 2023, over 1,400 first-time buyers had utilized the grant. By the end of January 2024, approximately 1,650 individuals will have received assistance from the program.

To help demystify the homebuying process, RIHousing hosts a free monthly virtual Homebuyer Education class, plus an in-person class for Spanish speakers. Those receiving mortgages from RIHousing are required to take the class. As of November 2023, 3,665 potential Rhode Island homebuyers had participated in a virtual class, with an additional 39 attendees for the Spanish class. For those who can’t make the live classes, virtual on-demand courses are offered through eHomeAmerica, where participants can do the class at their own pace. As of November 2023, 1,825 people had completed the English version, 119 had done the Spanish version, and 123 had finished the 203k course for individuals wanting a Renovation Mortgage. The total number of prospective homebuyers who complete a Homebuyer Education class by the end of 2023 will be more than 5,700 – up from 2,785 in 2022.

Addressing Homelessness

This past year’s increase in unsheltered homelessness impacted the entire nation, and Rhode Island was no exception. The Department of Housing continued or expanded many programs designed to assist those experiencing homelessness and prevent Rhode Islanders from becoming homeless, including cost effective and proven solutions.

To prevent homelessness from occurring, the Department of Housing is funding legal services for Rhode Islanders as a support program offering legal counsel, aid, and housing navigation resources to individuals at risk of eviction. By investing in homelessness prevention and shelter diversion, the state will reduce the number of people entering the shelter system and reduce future costs. Evidence from various studies strongly indicates that eviction is not just a condition of poverty but is a cause of it -- evictions cause job loss, negatively affect health, and introduce a substantial new barrier to securing housing in the future. This understanding underscores the significance of making legal services available to address the immediate legal needs of individuals facing housing insecurity, aiming to disrupt the cycle of eviction and its detrimental impacts on Rhode Islanders.

The Department of Housing is funding six different agencies for Housing Problem Solving (HPS) to provide counseling and creative housing-focused interventions. Housing Problem Solving services are aimed at preventing imminently homeless households from entering the shelter system (Homeless Prevention) and assisting households who are homeless to ensure a rapid move into permanent housing (Rapid Exit). The Department of Housing is making a substantial investment in flexible funding resources that can be used for costs like security deposits, moving expenses, transportation costs to maintain or secure employment, among others uses. The six agencies being funded are Crossroads RI, Amos House, Family Services of RI, Sojourner House, Tri-County Community Action, and Thrive Behavioral Health. These efforts are bolstered by Rhode Island Foundation’s investment of $160,000 to support flexible financial assistance and case management that prevents entry to the shelter system or enables rapid exit. The Foundation is also providing the public with an opportunity to support these efforts with donations via The Path Home Fund.

After a busy and successful 2023, the Department of Housing and RIHousing are well positioned to achieve even more in 2024 as Rhode Island works toward expanded housing opportunities and affordability for all.