Rhode Island’s FY2021 Budget Affirms Governor’s Commitment to Addressing the State’s Housing Crisis

Rhode Island Governor Gina Raimondo’s (D) FY2021 budget plan, released on January 16, prioritizes the development and preservation of affordable homes in the state. The governor’s budget includes a housing bond, and for the first time in the state’s history, a dedicated revenue source to increase the supply of affordable homes. Rhode Island housing advocates, including the Rhode Island Coalition for the Homeless, an NLIHC state partner, applauded the governor’s commitment to ensuring that every Rhode Islander has a safe, decent, accessible, and affordable home.

Rhode Island is the only state in the Northeast without a dedicated funding stream for affordable housing. The governor’s $10.2 billion budget includes an estimated $7.9 million annually of permanent funding for the construction of affordable housing, paid for by a modest increase in the real estate conveyance tax on properties valued at more than $500,000. State officials estimate that the new tax would generate enough money to create 250 affordable homes for low- and moderate-income Rhode Islanders each year.

The governor’s proposed budget includes several other initiatives to address Rhode Island’s housing shortage and affordability gap. In addition to the new tax, a $25 million housing bond would be created for the development and rehabilitation of affordable housing.

The governor also proposed new housing incentives for municipalities to build more affordable housing and the elimination of a “duplicative” tax on investors who purchase and then sell affordable housing developments. The proposed budget establishes an interagency coordinating council and codifies the Rhode Island Office of Housing Community Development to improve statewide coordination of affordable housing initiatives. Finally, the governor included an additional $1.4 million in her proposed budget for an initiative launched last year to help municipalities identify potential development sites.

Rhode Island lawmakers will evaluate Governor Raimondo’s budget in the upcoming months, with the final budget deal signed into law in June, a typical practice. The Rhode Island Coalition for the Homeless and other housing advocates will continue to work with local legislators and community partners to implement these solutions to the state’s affordable housing shortage.

“Rhode Island has a housing affordability crisis which directly contributes to the fact that, on any given night, 1,055 of our neighbors will experience homelessness," said Kristina Contreras Fox, policy analyst for the Rhode Island Coalition for the Homeless. “At the current rate, Rhode Island will end family homelessness in 2025 and individual homelessness in 2050. For years, we've watched our New England neighbors make significant investments in affordable housing to the benefit of entire communities. With Governor Raimondo's budget proposal, Rhode Island is at last catching up. We applaud her leadership in making affordable housing a priority so we can truly help our fellow Rhode Islanders in need. Safe, secure, affordable housing is the cornerstone to ending homelessness.”

To learn more about the Rhode Island Coalition for the Homeless, contact Policy Analyst Kristina Contreras Fox at [email protected] or 401-721-5685 ext. 46.