PROVIDENCE — Providence mayoral candidate Gonzalo Cuervo on Monday called for creating a municipal developer program to build new affordable housing in the city, and he called for capping rent increases at 4 percent annually for apartments that are 15 years or older.
“The rents are too high,” Cuervo said during a news conference on Baxter Street in South Providence. “I own rental property myself, and I realize property taxes go up and that’s painful, but rents have gone up at an obscene level compared to the increase in property taxes.”
Cuervo said he worked to develop a series of housing policy proposals with Reclaim Rhode Island, a progressive group founded by volunteers for Senator Bernie Sanders’ presidential campaign in Rhode Island. His housing plan includes a public developer, a rent stabilization program, a mandatory eviction diversion program, and proposed land use changes.
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“Housing affordability is one of biggest challenges facing our city right now,” Cuervo said. “More and more people want to live and invest here, but the problem is, demand exceeds supply. There are not enough new homes being built, and we know for years, private developers have failed to build enough housing for poor and working class people.”
In the past 40 years, Providence has issued an average of 135 building permits per year, with a peak of 765 in 1988, and it issued just 54 permits in 2021, according to a plan developed by Reclaim RI’s policy team for Cuervo.
Also, he noted that 73 percent of Providence households cannot afford the city’s median home price of $203,700, according to HousingWorks RI at Roger Williams University. Meanwhile, the average two-bedroom apartment in the city rents for about $1,800 a month while the median income hovers around $40,000 a year. Rents for apartments in the South Providence neighborhood have jumped from $900 just 18 months ago to $1,500 today.
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“This situation is unsustainable,” Cuervo said. “For too long, we have stood by and watched this crisis fester. The City of Providence has the resources and tools to take action. We can no longer wait for the state or the federal government to solve this crisis for us. My plan takes bold action to address our housing affordability crisis.”
He called for following the lead of the municipal housing developer program launched in Montgomery County, Maryland. “They are making bold steps forward,” he said. “Last year, they borrowed $50 million for their version of a housing trust, and they are already in the process of building 8,000 affordable and low-income units for the community.
Cuervo called for using federal American Rescue Plan Act funds and existing entities — such as the Providence Redevelopment Agency, the Providence Housing Authority, the Planning Department, and the city’s Affordable Housing Trust Fund — to have a public developer build housing across the city.
The public developer also would work with nonprofit affordable housing developers to replace inefficient, fossil-fueled housing with environmentally sustainable units powered by renewable energy, he said.
“We are not trying to create anything entirely new,” Cuervo said. “We are utilizing tools we have to make affordable housing a reality and end the affordable housing crisis hurting our families and friends.”
He noted a similar proposal came before the General Assembly this year. Senator Meghan E. Kallman, a Pawtucket Democrat, introduced the Create Homes Act, which would have created a state Department of Housing, tapping $300 million in federal funds to buy and build homes in response to the state’s housing crisis. While that bill did not become law, the state budget did include $10 million for a pilot program for publicly developed rental housing, he said.
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Cuervo also called a “rent stabilization” program. “Now, there has been a lot of efforts to push for rent stabilization,” he said. “Some people call it rent control.”
His proposal calls for limiting year-over-year rent increases to 4 percent for apartment units that are 15 years and older, with limited exemptions for newer rental properties. Units would be subject to the 4 percent cap unless they have been vacant for five years or more. Owner-occupied buildings would not be exempted, he said.
Cuervo is running in a Democratic primary against former state administration director Brett Smiley and Providence City Council member Nirva LaFortune, and no Republican candidates are in the race.
When asked for a response to Cuervo’s proposal, LaFortune said she supports rent stabilization.
“This is an opportunity for us to work with the state and organizations like DARE, an organization which has been working on legislation on this issue for years,” she said in a statement. “I would be interested to know where the 4 percent number came from as the cap for year-over-year rent increases. It seems to me that a flexible cap that is tethered to other market indicators would be a smarter approach.”
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Smiley’s campaign said he does not support rent control.
“Brett has been vocal about the lack of affordability of rents and wants to solve the problem by building more units, especially homes [that] families, not just students, can live in,” Smiley campaign spokesperson Emily Crowell said in a statement. “He also supports an aggressive increase in low and moderate-income housing throughout the city.”
But, she said, “Rent control has proven to be ineffective in other cities — there are too many people left out, landlords stop properly maintaining buildings, and it does nothing to control costs or the tax burden on property owners. In Providence, many landlords are local, long-term residents.”
Cuervo also called for creating a mediation program to work with tenants to solve problems before the eviction process begins. He said groups such as Direct Action for Rights and Equality have been pushing for such a program for years, and he wants to create a model “that doesn’t create an unwieldy bureaucracy.”
“Providence must create an eviction diversion program in which all landlords in the city must participate, with a particular emphasis on reducing evictions stemming from the nonpayment of rent,” the Reclaim RI policy document said. “As the leading cause of evictions locally and statewide, rent shortfalls and arrearages are relatively resolvable issues.”
Cuervo called for making land use changes that would let Providence grow without displacing people. For example, he proposed increasing residential density citywide to 10 dwelling units per acre with a 15-unit per-acre minimum near transit stops — an idea modeled on similar provisions in Massachusetts for transit-served communities.
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“This means upzoning the city,” he said. “This means ensuring we are legalizing accessory dwelling units. We hear a lot about accessory dwelling units — the granny flats, the apartments over garages, and that sort of thing. These units have existed and are being occupied now.”
The problem, he said, is that those units are being occupied in violation of zoning laws. “We need to legalize these units and make sure they are offered in a way that guarantees the safety and security of the inhabitants and the surrounding community,” he said.
Earlier this year, the General Assembly passed a law aimed at making it easier to construct accessory dwelling units, allowing those units to be counted towards low- and moderate-income housing requirements.
And Cuervo proposed reducing the number of off-street parking spots that developers must create, especially in areas served by mass transit, saying off-street parking minimum requirements should be replaced with parking maximum requirements.
The plans also calls for offering down payment assistance to city employees to incentivize first-time homeowner occupancy in Providence.
This story has been updated to add comments from other Democratic candidates running in the Providence mayoral primary.
Edward Fitzpatrick can be reached at edward.fitzpatrick@globe.com. Follow him on Twitter @FitzProv.