More than half of Rhode Island’s lowest-income renters are at risk of homelessness

The US has a total shortage of 7 million rental homes, according to “The Gap,” an annual report by the National Low Income Housing Coalition. Low-income residents in every state are struggling.

A 92-year-old woman sits at her kitchen table after receiving a meal from Meals on Wheels of Rhode Island.David Goldman/Associated Press

PROVIDENCE — More than half of Rhode Island’s lowest-income renters are severely cost-burdened, spending more than half of their income on housing alone, and are at risk of homelessness, according to a newly released report.

On Thursday morning, the National Low Income Housing Coalition released their annual “The Gap” report, which looks at the shortage of affordable homes across the country. According to the report, the US has a total shortage of 7 million rental homes that are both affordable and available to extremely low-income renter households.

In 2021, the coalition reported that not a single state in the US had an adequate supply of affordable rental housing for the lowest-income renters.

“Even before the pandemic, seven out of 10 renters with the lowest incomes were at severe risk of housing instability,” said NLIHC President and CEO Diane Yentel at the time.

Rhode Island has just 51 affordable and available rental homes for every 100 extremely low-income (also known as ELI) households, who are those with incomes at or below the poverty level or 30 percent of the area median income (AMI).

The AMI for an ELI four-person household is $86,500. A rental home is considered affordable when total housing costs are no more than 30 percent of the household’s gross annual income earning 80 percent or less AMI. According to the report, an an overwhelming majority, about 74 percent, of extremely low-income households in the state are cost-burdened, which means their total housing costs are more than 30 percent of their gross annual income.

Most of Rhode Island’s housing stock pre-dates 1980, and advocates said Thursday that the “decades of underinvestment in housing development” is forcing the lowest-income renters to rent homes that are more expensive than they can afford.

“Rhode Island has been positioning itself for a serious housing inventory shortage over the last three decades,” said Melina Lodge, the executive director of the Housing Network of Rhode Island.

And the number of people in need is only growing.

There are 49,032 extremely low-income households in Rhode Island and a shortage of 24,050 affordable and available rental homes – which is an 11 percent increase in shortages compared to 2021. Last year, approximately 45,100, or 29 percent, of renter households were considered “extremely low income,” with a maximum annual income of $26,970 for a four-person household.

But a household would need an annual income of at least $46,885 to afford an average, two-bedroom rental at HUD’s Fair Market Rent, according to Coalition data that was pulled last year for its “Out of Reach” report. At the time, a minimum wage employee would have had to work at least 78 hours each week in order to afford an average, two-bedroom apartment; hourly workers would need to earn at least $22.54 an hour in order to afford such an apartment. Advocates say the growing need and dwindling housing stock means those numbers will likely skyrocket in the next “Out of Reach” report, being published this summer.

“The gap between housing costs and what our workforce can afford has been a persistent problem in Rhode Island for a long time,” said Brenda Clement, director of HousingWorks R.I. at Roger Williams University. “Of the more than 11,000 jobs represented by our state’s top 20 ‘high growth occupations,’ 72 percent of them do not pay employees enough to be able to afford to rent a two-bedroom apartment.”

“Closing this gap is critical for workforce retention and the economic growth in our state,” she said.

Rhode Island’s lowest-income renters were disproportionately impacted by the effects of the pandemic. There were federally mandated eviction moratoriums and protections in place, but those have since lifted.

Margaux Morisseau, who is the deputy director of the Rhode Island Coalition to End Homelessness, says longer-term federal investments are needed to combat the shortage of affordable homes.

“Our state’s rental vacancy rate is at an all-time low, causing market rents to rise out of control. People who were housing burdened are being priced out of their homes and ending up needing shelter,” said Morisseau. “Our shelters are full to capacity and because of the lack of affordable housing, people living in shelters have nowhere to move to.”

Morisseau said more approximately 1,318 people in Rhode Island are experiencing homelessness.

It’s not just Rhode Island struggling to fill gaps in affordable housing. Among the 50 largest metropolitan areas in the US, the supply ranges from 16 affordable and available rental homes for every 100 extremely low-income renter households in Las Vegas to 50 for every 100 in Providence.

Rhode Island’s small size — just over 1 million people — gives it an opportunity to solve homelessness and housing insecurity, advocates say.

Lodge, at the Housing Network, has again called for the state to dedicate at least $500 million of its $1.13 billion in American Rescue Plan Act (ARPA) funds to put toward housing and new development.

However, Governor Dan McKee has proposed a $250 million investment in housing and homelessness assistance using the recovery funds in his FY2023 budget this year. It’s the biggest chunk allocated from the ARPA funds, but only $90 million of that money will go toward “creating and preserving” about 1,500 units for households earning up to 80 percent of the area median income (which is about $69,200 for a four-person household).

About 10 percent of the state’s ARPA funds have been earmarked, but the remaining $1 billion is still up for grabs. But organizations, businesses, unions, and key stakeholders have proposed programs that would cost the state a whopping $7 billion.

The ARPA “funds offer a transformational opportunity to Rhode Island’s leaders to invest in the production of much needed new homes, provide funds to preserve and maintain our aging housing sock, and to improve access and housing stability to the most vulnerable,” said Lodge.