Under new law, communities, developers given affordable housing options
STATE HOUSE – As a result of newly-enacted law, communities and developers now have several options for conforming to municipal ordinances regarding the construction of affordable housing units in a community.
Prior to the governor’s signature recently of legislation approved by the General Assembly, any community zoning ordinance that required the inclusion of affordable housing as part of a development called for no less than 10 percent of the total units built to be affordable housing, and required that those units remain affordable for at last 30 years from initial occupancy.
The new law, which is now in effect, will allow several different paths to achieve the 10 percent affordable housing goals set for Rhode Island communities – that the housing be built on-site, that the units be provided through off-site construction of rehabilitation, that land is donated to the community suitable for development of the required number of units, or that developers pay a fee-in-lieu of construction to the community.
Any such fee paid to a community by a developer choosing that option will be based on a per-unit basis and may be used for new developments, purchasing property and/or homes, rehabilitating properties or any other manner that creates additional low- or moderate-income housing.
The legislation signed by the governor, 2014-H 7632Aaa by Rep. K. Joseph Shekarchi (D-Dist. 23, Warwick) and 2014-S 2086A by Sen. David E. Bates (R-Dist. 32, Barrington, Bristol, East Providence), requires a municipality accepting fee-in-lieu payments to depositing that money into restricted accounts to be allocated and spent only for the creation and development of affordable housing within the municipality, to serve individuals or families at or below 80 percent of the area median income. Municipalities would maintain local affordable housing boards to oversee the funds, and to allocate funds within two years, or they would be able to transfer the funds to the Housing Resources Commission or Rhode Island Housing for the purpose of developing affordable units in the particular community.
Also established by the new law is a per-unit fee for affordable single family and condominium units as the difference between the maximum affordable sales price for a family of four earning 80 percent of the area median income and the average cost of developing a single unit of affordable housing (which is to be determined annually based on the average per-unit development cost of homes financed by Rhode Island Housing over the previous three years).
The Rhode Island Comprehensive Housing Production and Rehabilitation Act of 2004 and Rhode Island Low and Moderate Income Housing Act require that 10 percent of each municipality’s housing stock be “affordable.” A total of 29 communities are covered by the act; 10 are exempt due to their percentage of rental housing and/or current affordable housing inventory.
To date, only one community (New Shoreham) has achieved 100 percent of its 5-year affordable housing goal. Several communities are rated as having shown excellent or good progress (30 to 99 percent of the goal), while the majority of communities have shown adequate progress, no significant progress or, in the case of five communities, no progress at all.
Communities need to make more progress in that direction, said the two sponsors, who said they believe providing the kinds of options that have now become law will encourage communities to move faster and make more progress in this area.