Historic credit, housing bond key to region’s health

This legislative session, as with those in the recent past, has been consumed by debates about how to improve Rhode Island’s economy and unemployment rate. Discussions of pension reform, budget cuts and the state’s role in aiding municipalities with their own budget woes fill daily headlines. With all this, an important sector of the economy has remained relatively sidelined over the last several months – housing.
Housing programs have not been getting the full attention they need from the General Assembly despite housing starts being a key economic indicator and construction of long-term affordable housing having proved itself to be successful in creating jobs and supporting Rhode Island’s economy. Programs that have been essential to this success are the historic- preservation-investment tax credit, Building Homes Rhode Island and the Neighborhood Opportunities Program.
Let’s look first to reinstating Rhode Island’s Historic Preservation Investment Tax Credit. House Speaker Gordon D. Fox showed great vision when he introduced legislation in 2001 to incentivize the redevelopment and reuse of historic properties as a way to “improve property values and foster civic beauty.” The program worked.
The Historic Preservation Tax Credit was a key catalyst in building both market rate and long-term affordable housing (as well as commercial spaces) out of unused, historic structures. Economic analysis of the program also showed that the tax credit created jobs and increased property-tax revenue for local municipalities.
Despite such success, concerns regarding the budgetary cost of the program led to its suspension in 2008. Talks, endorsed by a coalition led by Grow Smart Rhode Island, are now under way to reinstate the program with tighter investment guidelines that address previous years’ concerns. Reinstating the Historic Preservation Investment Tax Credit is key to increasing local tax revenue by bringing abandoned properties back to the market, providing housing and supporting jobs in the construction sector.
An important strategy in the construction and rehabilitation of long-term affordable housing is the state’s Building Homes Rhode Island program. Economic analysis by HousingWorksRI showed that the $50 million bond that funded the program was multiplied nearly 16 times throughout the state’s economy, generating close to $800 million in total economic activity. Construction activity supported by the program accounted for nearly 60 percent of the total estimated cost of residential construction permitted in Rhode Island from 2007 through 2010. The highly efficient state program resulted in the development of more than 1,300 long-term affordable homes, the majority rental. The funds from the housing bond passed in 2006 have been fully spent, but Gov. Lincoln D. Chafee included a $25 million housing bond in his fiscal 2013 budget. The General Assembly should move this measure forward to voters in November to ensure the state can maintain the momentum of Building Homes Rhode Island.
In addition to the development of long-term-affordable housing, Rhode Island needs consistent funding for the operation of these homes. The Neighborhood Opportunities Program has helped to fund the operation costs of long-term affordable rental homes to our lowest income residents. Both Senate President M. Teresa Paiva Weed and Speaker Fox have in the past championed the program and with good reason. The program was designed to fund the difference between the rental cost of affordable housing to low-wage workers in Rhode Island and the cost to landlords of operating the rental units. With Building Homes Rhode Island helping to fund development costs, and the NOP helping to fund operating costs, the two programs have worked together to provide a full continuum of housing options for Rhode Islanders. At a time of increasing need due to the state’s foreclosure crisis and the economic recession, the NOP is a lifeline to our low-wage earners – who important sectors of our economy rely on.
As business and community leaders, we understand the persistent budgetary and economic concerns facing our state, but the consequences of housing that’s not affordable to our residents threaten our economic recovery.
Long-term-affordable homes are a critical investment for Rhode Island. Safe, affordable homes are a necessary platform for other important societal outcomes in the areas of health, education and public safety.
The current economic downturn provides the state with a window of opportunity to obtain properties at lower cost than in the past, return these properties to the tax rolls, help revitalize neighborhoods and ensure that the state gets a high return on its investment. &#8226


Arnold “Buff” Chace Jr. is the president and CEO of developer Cornish Associates; Laurie White is the president of the Greater Providence Chamber of Commerce.

No posts to display