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New Data Shows Who Can and Can’t Afford to Live in Providence

Monday, August 19, 2013

 

Who can - and who can't - afford rents and homeownership in Providence is the focus of a recent report of the National Housing Conference. GoLocal asked local experts for their take on the implications.

How affordable is it to live in Providence these days? If you're a software programmer, a civil engineer, or a registered nurse, you might not have much trouble with renting an apartment in the city, or buying a home.

However, a recent report shows that if you're a bank teller, child care worker, or retail salesperson trying to live in Providence, whether it be looking to own a home -- or simply renting -- the current climate could make it difficult, if not impossible, to do so.  

The National Housing Conference and Center for Housing Policy recently published its recent "Paycheck to Paycheck" data for the first quarter of 2013 which shows graphs that compare wages and housing costs in 207 metro areas across the nation, showing median incomes for 76 occupations against median home prices and the income needed to afford them -- as well as fair market rents and the income necessary.  

Of the 76 occupations looked at by the National Housing Conference, 20 occupations fell below the income threshold needed to afford a one bedroom rental in Providence; 30 below the income needed to afford a two bedroom rental, and 46 below the level listed for homeownership. 30 occupations were above all levels.

See examples of occupations that fall short of income thresholds -- and what those levels are -- in the slideshow BELOW.    

"This information further supports a problem that's been in Rhode Island for a long time," said Linda Katz with the Economic Progress Institute. "25% of RI renters spend more than 50% of their income on housing related expenses."

Nicole Lagace, Interim Director of HousingWorks RI, noted that high housing costs presented an issue not only to residents but the state as a whole.

"High housing cost burdens put Rhode Island at a distinct competitive disadvantage in attracting and retaining workers," Lagace told GoLocal.

Looking at the Data

The database available on the National Housing Conference website allows visitors to search job parameters in urban markets to see how affordable housing might, or might not, be.

The National Housing Conference states that ways to use the data for any urban area are to "assess whether housing is affordable in your metro area for workers in different occupations, compare the housing affordability of different metro areas for a specific occupation, see the big picture of housing affordability for low- and moderate-income workers nationally, complement analyses of combined housing and transportation cost burdens by documenting overall metro area housing affordability, and use our Paycheck to Paycheck instructions as a template to examine wages and housing costs in neighborhoods in your community."

"We want the city to be able to have a diverse mix of folks by income. What this doesn't tell us is where these folks are in fact living. I don't think per say that these people who aren't meeting these levels [for renting and homeownership] live outside of Providence. I would imagine that other urban areas, like Pawtucket, face a similar scenario," said Katz.

"This report shows why we see people doubled-up in housing, as well as homelessness among working folks. If you're a young person, and have roommates, maybe that's OK. If you're a single parent in your 30, that's another story."

Katz continued, "We need subsidies in place for people to rent apartments on Providence, but we also need strategies for people to gain more skills to move up wage ladder."

Laura Hart with the Department of Labor said that in total, there are currently 14,000 RI residents earning between $7.00 and 7.99 an hour. "There are an estimated 6,000 earning less than the minimum, half of which earn under $3.00/hour - likely wait staff," said Hart.  

"As for minimum wage, the Governor supported the last two efforts to raise the minimum wage in RI. From a workforce development point of view, we have consistently invested in efforts to train workers for projected job growth in high-demand AND high-wage areas," she continued.  

However, Lagace with HousingWorks RI said that addressing minimum wage was just "one facet of the issue."

"Even if workers earned twice Rhode Island's minimum wage, they would not be able to afford the average two-bedroom rent in the state," said Lagace.

Bigger Picture of Housing and Jobs Needs

"HousingWorks RI's analysis has consistently shown an affordability gap between earnings and housing costs throughout Rhode Island, that result in severe housing cost burdens, particularly for renter households," Lagace told GoLocal.  "Some of our most recent analysis revealed that workers in Rhode Island’s top three occupation groups earn less than the hourly wage needed to afford the average 2-bedroom rent in Rhode Island."

Lagace notes that policymakers "must consider high housing cost burdens when developing policies to promote economic growth."

"Typically, states have a two-pronged approach to funding affordable housing that involves investing in the development and ongoing operation of these homes.  Rhode Island has a $25 million housing bond to help fund the development of affordable housing, and the General Assembly appropriated $750,000 for rental subsidies in the FY2014 budget," said Lagace -- noting examples of Rhode Island's neighboring states as a direct comparison.  

"Both Connecticut and Massachusetts recognize that affordable housing is essential for a stronger economy and invest more than twice as much, per capita, on affordable housing than Rhode Island," she said.  

Suppy and Demand

Aaron Renn, a self-described, "urban analyst" who writes about state and local affairs and policy at his website The Urbanophile, GoLocalProv, as well as other outlets, noted that the data presented in the report points to a number of larger reaching issues.  

"There are places that are extremely expensive, and some that are on the other end, "said Renn. "I don't think that the East Side will ever be that economically diverse. I think this holds true to places like Cranston and Warwick.

"I think a diversity of housing options is important. I don't think that addressing the minimum wage is the issue per say," he continued. "Why does it have to be once a dishwasher, always a dishwasher? We need to get people qualified over time and continue to support education, we need to eliminate disincentives to advancement.  I think the problem is we don't have a lot of jobs. Period. We need higher skilled jobs, and economic development for a lifetime of low-wage labor."

Renn noted however that he thought that suppressed housing supply also played a factor. "Restrictions on housing development doesn't help, as that can push housing prices up."

Looking at the big picture, Renn said that there were a number of factors to look at in terms of affordable housing -- and easy answers might not be so simple to come by.

"There's not a magic setting on the dial," said Renn. "And there's no such thing as a free lunch. Different parts of the country have different value sets. In Rhode Island, we need to come to terms with costs."
 

Prev Next

Prov. Median Home Price

Accoring to the National Housing Conference data, the median home price in Providence for the first quarter of 2013 was $168,000.

This is up $3,000 from the median price of $165,000 for the first quater of 2013. 

Based on this amount, the annual income needed for homeownership in Providence is $44,975.  

Prev Next

Prov. Fair Market Rents

The National Housing Conference numbers show that the 2012 fair market rents in Providence are $762 for a one-bedroom rental, and $930 for a two-bedroom rental.  

Based on those rents, the National Housing Conference reports that that annual income of $30,480 is needed for a one-bedroom in Providence, and $37,200 for two-bedroom.  

Prev Next

Who can't afford rent (1)

The data compiled by the National Housing Conference looking at 76 occupation groups found that the incomes in Providence for 20 occupations fell below the threshold needed to rent a one bedroom apartment.

Included in this list were bank tellers, hairdresser, home health aide, retail salespersons, and security gaurds among others.

Check the complete list here.

Prev Next

Who can't afford rent (2)

The data compiled by the National Housing Conference looking at 76 occupation groups found that the incomes in Providence for 30 occupations fell below the threshold needed to rent a one bedroom apartment.

Included in this list were construction laborer, delivery truck driver, dental assistant, receptionist, and telemarketers, among other.s

Check the complete list here.

Prev Next

Who can't afford a home

Of the 76 professions looked at in the report, over half -- 46 -- fell below the income threshold needed for homeownership.  

This included administrative assistants, equipment operators, firefighters, loan officers, and nurses (LPNs).  

Prev Next

Who can afford a home

Accountants, elementary school teachers, paralegals, physical therapists, and police officers were listed among the 30 professions that showed income levels that could afford the median homeownership amount of $168,000 in Providence.  

 
 

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Comments:

anthony sionni

It doesent help that these councilman voted to raise your property taxes, Solomon,Salvatore,Igliozzi,Principe,Correia,Jennings,Narducci,Hassett and Yurdin!

Vote in 2014 Anthony Sionni for Prov. City Council Ward 14, NO NEW TAXES!

Gary Arnold

Can anyone even understand that there are not enough jobs available never mind jobs that have skills and pay well in RI.
Our leadership is devoid of understanding we have to build a business infrastructure to build good jobs that will again allow people to invest in anything in RI. We are still a welfare state depending on the government handouts, healthcare and low end jobs.
Elect new individual thinking politicians, not the UNIONIZED Democrats that plague the state now.

a y

There are many things the state, the city and the federal government can do to make housing more affordable. They shouldn't be raising taxes or reducing deductions. Luckily this article refers to average rents and average sale prices. There are many units available for more and for less.

tom brady

People from third world countries seem to thrive in PVD!

Howard Miller

get real Kate who in the right mind would not sacrifice all not to live in the same city with Buddy

JOJO MONKEY

If you can't afford to live in Providence the Taveras administration will hook you up and get the suckers who work and pay property taxes to pay for it all!...all you have to do is sign the democrat voter card and the world is yours. BIENVENIDO A PROVIDENCE!

JOJO MONKEY

PS..IF YOU ELECT TAVERAS GOVERNOR EVERY CITY AND TOWN IN THIS STATE WILL RESEMBLE PROVIDENCE. IMAGINE EAST GREENWICH AND BARRINGTON WITH SECTION 8 HOUSING,CHECK CASHING STORE FRONTS,ALDI MARKETS, DOLLAR TREES,FREE CELL PHONE TABLES ON EVERY CORNER..ETC.ETC.

joe pregiato

Why are there only private sector jobs in the survey? It seems like half the people in Providence who are lucky enough to have a job work for the government, and get paid by our taxes.




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