Report: R.I. households expected to grow, creating more housing demand

A NEW REPORT ON housing from HousingWorks RI commissioned by Rhode Island Housing showed that housing costs generally outpace income in Rhode Island. / COURTESY HOUSINGWORKS RI
A NEW REPORT ON housing from HousingWorks RI commissioned by Rhode Island Housing showed that housing costs generally outpace income in Rhode Island. / COURTESY HOUSINGWORKS RI

(Updated 1:42 p.m.)
PROVIDENCE – A new Rhode Island Housing report said that the number of households in the state will increase by 12 to 13 percent over the next decade, creating additional demand for housing.
The report, “Projecting Future Housing Needs in Rhode Island,” was released Wednesday; HousingWorks RI at Roger Williams University was commissioned by Rhode Island Housing to do the report, which said the population is starting to increase after steadily declining from 2006 to 2010.
“Rhode Island is still recovering from the housing and economic crash that dramatically reshaped the state’s economy and housing market,” it states.
The report is projecting an increase in population between 3.3 and 4.5 percent by 2025. It said if current trends in birth, deaths and migration rates continue, population should increase 3.3 percent, and if the economy improves, it could grow up to 5 percent.
The new households, however, are projected to have incomes below 120 percent of the area median income, which is $73,500 for a family of four; the new household growth is expected to be driven by those who tend to have lower incomes, such as seniors and millennials just starting their careers.
To accommodate future growth, more housing will be needed, between 34,600 and 40,200 new units by 2015, depending on how fast the economy expands, the report said. The state currently has 462,930 housing units.
It said demand for multi-unit housing will increase, as more than 80 percent of new households will seek housing in multifamily properties such as townhouses, duplexes, apartments and condominiums. More than 30,000 of the projected new housing units will be needed in multifamily properties, it said.
It said in the past decade, there were just 13,400 building permits issued statewide, and of that number, only 3,255 were for multi-family units.
It found that housing costs are outpacing income, and said that to own a home, an income of $63,192 is needed, and to rent, $46,160. It said the average private sector wage is $48,568.
It said 40 percent of households are cost-burdened, representing the highest in New England, meaning they pay more than they can afford for housing costs.
Meanwhile, it said average rent prices increased in 2015 from 2014 levels by 6.7 percent for studio apartments, 5.1 percent for one-bedroom apartments, 5.6 percent for two-bedroom apartments and 6.6 percent for three-bedroom; it said these are the steepest single-year rent increases since 2004.

The study also showed that those ages 45 to 64 currently make up the largest portion of the population at 28 percent, followed by 25 to 44 year olds at 25 percent.

It said millennials, people born between 1981 and 1997 (ages 18 to 34) are waiting longer to marry and have children, are burdened by student debt and have fewer children once they have them.

Meanwhile, it said seniors 65 and older are downsizing, and living longer.
The report said focus groups were held with four growing Rhode Island demographic groups – low income, millennials, Latinos and seniors, those age 55 and older in 2015. They were asked if they were satisfied with their current housing, about their housing dreams and the barriers to reaching those dreams, and suggestions for changes in policy. All said the state needs more options for affordable housing.
Highlights of the focus groups:

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  • Renters voiced concerns about the upkeep of their apartments, and complained they had to call landlords repeatedly about problems.
  • Public transportation was criticized for being inadequate.
  • Seniors talked about the difficulty in meeting home-related expenses each year on fixed incomes. They singled out high property taxes.
  • Millenials see rent as high and growing more expensive each year.
  • Millenials like the East Side of Providence for its nightlife, shopping and transportation, but say the most desirable neighborhoods are not affordable.
  • Space is a concern among millenials; the apartments that three or four people must live in in order to afford the rent lead to cramped quarters, they said.
  • Latinos reflected on inappropriate behavior from landlords, such as accessing their apartments without permission and home repair needs going unaddressed. They also said the areas outside their apartments are unsafe for their children to play.
  • Latinos said public officials do not care about the poor conditions tenants live in, citing problems ranging from cockroaches, mice and mold to moisture in apartments.
  • Residents in subsidized housing said the housing has desirable conveniences, such as being located in areas where it is not necessary to have a car because shopping and schools are nearby, but also some undesirable aspects. One resident talked about someone being shot in the hallway.

The report concluded with ways to solve the housing dilemma, such as supporting a $40 million housing opportunity bond, providing rental assistance to cost-burdened renters, raising incomes for working Rhode Islanders, and developing a long-term strategy for meeting the state’s housing needs, among other suggestions. The state also could reduce regulatory barriers to development and provide municipalities with incentives to encourage development of a mix of housing opportunities in urban and village centers, the report said.

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