Publicly Driven Development and Ownership of Housing: A Feasibility Study for Rhode Island

This report examines both longstanding and newly emerging models of publicly driven development and ownership within the U.S. and internationally. The goal is to understand the feasibility of these approaches in Rhode Island. The state is experiencing a significant housing shortage, especially in multifamily rental housing that is affordable to low- and very low-income households, and ranks among the lowest in the U.S. for housing production. While public development was at one point a major source of affordable housing in the U.S., these efforts have been gradually limited and defunded over the last 50 years in favor of publicly subsidized private development. The state is now considering publicly driven development and ownership of affordable housing. We present findings from an intensive, six-month study to inform their policy decisions.

Rhode Island is experiencing a significant housing shortage, especially in multifamily rental housing that is affordable to low- and very low-income households. The state also ranks among the lowest in the U.S. for housing production. One proposal for addressing these issues is to create or utilize a government entity to play the role of affordable housing developer and owner. While public development was at one point a major source of affordable housing in the U.S., these efforts have been gradually limited and defunded over the last 50 years. Instead, publicly subsidized private development has become the common affordable housing development model, centered around the use of the Low Income Housing Tax Credit. In this model, federal, state, and local governments provide different forms of development financing, among other financial and regulatory tools, to maintain oversight rather than a direct ownership stake in a property. This report provides insights into the feasibility of public development and ownership models as a means of delivering affordable housing in Rhode Island through 1) case studies of both longstanding and emerging models of public development within the U.S. and internationally; 2) analysis of the Rhode Island development context; and 3) a review of financing and regulatory mechanisms that could facilitate public development in Rhode Island. Appendices provide more detailed descriptions of each of the case studies and of the financial analysis.