HousingWorksRI says affordable homes limited for the average Rhode Islander

PROVIDENCE – Affording a home in Rhode Island is little easier today than it was last year, according to HousingWorksRI's annual report released Tuesday.

A household earning the state’s median annual income of $55,701 can afford a single-family home in 12 of the state’s 39 communities. Last year, HousingWorks deemed 11 communities affordable.

“Both the unprecedented run-up in housing prices in the first half of the decade and the foreclosure crisis in the second half have made finding a quality, affordable home difficult for many Rhode Islanders,” said the coalition of businesses and community groups. “Homes in Rhode Island appear on the surface to be more affordable, but the reality for many Rhode Islanders is that a tighter credit market and stricter down-payment requirements make owning a home unattainable.”

The 12 communities considered affordable were Burrillville, Coventry, Cranston, East Providence, Gloucester, Johnston, North Providence, Pawtucket, Providence (excluding the East Side), Warwick, West Warwick and Woonsocket.

The average yearly household income needed to afford a home rose in 20 communities and declined in 19 others this year compared to 2009. Block Island maintained its title as the most expensive community to purchase a house with a household needing an annual income of $233,346. Jamestown came in second at $118,657 and Barrington third at $99,065.

On the other end of the spectrum, Central Falls stayed the most affordable community, with a household requiring a yearly income of $22,031. Providence – excluding the East Side – was second with a household needing a $39,714 annual income.

HousingWorks said the lack of more affordable homes threatened to stall economic development. The organization noted that many professions – including custodians, retail workers, salespeople and waiters – typically bring home less than $25,000 a year.

“The consequences of housing that’s not affordable to our residents can be disastrous for our economy,” said the coalition. “Recent research by the Federal Reserve Bank of Boston suggests that Rhode Island may be losing qualified labor due to high housing costs which, in turn, slows growth in local employment.”

Besides single-family homes, HousingWorks studied rental costs. It said that the household income needed by a renter of an average two-bedroom apartment fell in 16 of the 26 communities studied. (The coalition said it lacked the information required to review the state's remaining communities.)

“The rental market is also squeezing the monthly budget of many residents,” said HousingWorksRI. “Rents significantly increased during housing-bubble years, but they have not decreased now that housing prices have come down.”

To make housing more affordable, HousingWorks pointed to green building techniques. The installation of solar panels, geothermal systems and high-grade insulation would both reduce long-term costs for homeowners and create local jobs.

“With the proper alignment of federal, state, and private resources and smart investments, Rhode Island can simultaneously make affordable, sustainable housing options available to working families, create jobs, and grow the state’s economy,” HousingWorks said.