[Rhode Island is using COVID stimulus money to become a public
housing developer — a monumental first step towards building a just
housing delivery system.]
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TACKLING THE HOUSING CRISIS WITH PUBLIC POWER  
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Ricardo Gomez
August 16, 2022
The Lever
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_ Rhode Island is using COVID stimulus money to become a public
housing developer — a monumental first step towards building a just
housing delivery system. _

Rhode Island is using COVID stimulus money to become a public housing
developer — a monumental first step towards building a just housing
delivery system., AP Photo/Rich Pedroncelli

 

In June, Rhode Island passed a $10 million pilot program
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that will use COVID-19 stimulus money to build mixed-income public
housing. By acting as a public developer itself, Rhode Island would be
the only state to acquire its own land and build housing directly,
cutting out profit-gouging developers — a model approach for the
rest of the country amid a housing crisis
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only grown more dire since the start of the pandemic.

The state’s pilot housing program is already shaking things up at
the local level. On Monday, Providence mayoral candidate Gonzalo
Cuervo added a municipal public developer plan to his housing policy
platform [[link removed]] as Reclaim RI
— the progressive organizing group that backed the state’s pilot
program — endorsed
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his campaign. Cuervo also adopted a rent stabilization plan that would
institute a four percent cap on year-over-year rent increases.

In a housing landscape dominated by private equity
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federal divestment
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and the failure of “public-private” programs, the fight for public
housing at the state level is increasingly urgent.

In Rhode Island alone, 1 in 3
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renters cannot keep up with rent. A recent report
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by the National Low Income Housing Coalition estimated that more than
60 percent of renter households in the U.S. are struggling to afford
basic living expenses after paying rent and utilities. Rather than
letting markets drive housing development outcomes, the public
developer model creates a foundation for a housing system not driven
by profits.

The pilot program is just one part of the state’s Create Homes Act
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which would use $300 million in American Rescue Plan Act (ARPA) funds
to create a new state housing department, realigning public spending
with public good. Designed to confront the housing crisis head-on, the
new department would have two central capacities: building housing and
acquiring land for public ownership.

State Sen. Meghan Kallman (D), who introduced the Create Homes Act,
told _The Lever_ that the bill “is designed to equip the state to do
everything that it could possibly need to do in support of a robust,
just, multi-income, well-planned, well-connected housing vision.”

Public Development For Public Housing

Public housing is popular
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and some states — Colorado
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California
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Hawaii
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and Maryland
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— recently passed legislation to build more of it.

The Low-Income Housing Tax Credit (LIHTC) program has been the
nation's main program for creating “affordable housing.” However,
LIHTC produces fewer units than it did 20 years ago, while costing the
public 66 percent more. Plus, 81 percent
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of LIHTC units are owned by for-profit entities, and with scant
federal oversight, recent investigations
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have shown how the program is rife with corruption, siphoning away
millions to private industry players, while banks and investors take
tax deductions.

What would set Rhode Island’s new public developer model
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apart is that it puts land planning, acquisition, and the actual
building of housing units into the public’s hands at the state
level. This removes the need for outside financing, as required by
LIHTC, and also circumvents the restrictions of the 1998 Faircloth
Amendment
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which capped the expansion of federal public housing. By creating a
direct relationship between the public’s needs and the allocation of
land for housing, the effort would circumvent the typical public
housing approach of draining public resources for private profits as
with LIHTC.

As the left-wing think tank People’s Policy Project argued in a 2018
report
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“a local administration which can build its own housing can never be
held hostage by developers expecting an unreasonable profit margin
again.” The report also noted that a public development model
affords the state more “autonomy and bargaining power” in future
housing decisions.

Kallman sees the pilot program as just the start of a holistic
approach outlined by the Create Homes Act. Kallman told _The Lever_,
“We have been historically hamstrung by a number of things including
disinvestment and zoning laws, which are handled primarily at the
municipal level.”

Importantly, using ARPA money takes a federal windfall to create
housing infrastructure without relying too heavily on municipal bond
markets. Historian of economic and racial inequality Destin Jenkins
found
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that public projects have been stymied by debt arrangements that are
shaped by the interests of bondholders.

In his book _The Bonds of Inequality_
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Jenkins writes, “The deterioration of public housing projects was
taken as proof of the failures of socially oriented public policies
rather than as a consequence of a structural arrangement that, from
the beginning, privileged the claims of bondholders.”

In order to get the public developer program off the ground, Rhode
Island would create a land bank
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a versatile tool for coordinating the conversion of real estate and
public land into the urgent goal of housing. All public and
quasi-public bodies in Rhode Island would have to conduct a review of
the real estate they own by the end of 2022. If those entities own
land that does not have a planned use within the next 10 years, then
they could be obligated "to enter into a negotiation with the
department for the transfer of the parcel to the land bank."

The housing department could then use its own staff or hire its own
contractors to carry out the construction of new housing units. These
two capacities — land development and contracting capacity — are
central pillars of a housing plan that could efficiently and quickly
create public housing.

Housing created by private developers has largely focused
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on [[link removed]]
building luxury
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and high-end apartments, prioritizing housing supply for profits
rather than social need.

In April, the owner of Rhode Island’s tallest building — locally
called the “Superman Building” — reached an agreement
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with state and city officials to redevelop
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the building to create more housing. Using $41 million in state and
local financing, High Rock Development plans to build 80 percent of
the housing into luxury, market-rate units.

Direct Action for Rights and Equality (DARE), a local organizing
group, is leading a campaign
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to protest High Rock Development’s profiteering. DARE organizes
tenants and is working on a campaign
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stabilization and housing for all.

A spokesperson for Tenant Network RI, a grassroots organizing group
that has helped form tenant unions
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Lever_ that as more tenants have come together with local organizers
to advocate for public policy measures like rent control, so too have
landlord lobbying groups like the Rhode Island Coalition of Housing
Providers
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and Narragansett 2100 [[link removed]] arguing against
government action to address housing issues.

“The way we see it is… everyday people who don't have property,
who don't own a business, or own their home, need to be organized to
defend our interests,” the spokesperson said_, _“There's been a
[housing] crisis this entire time, [however] crisis in itself is not
enough to force the powers that be in the establishment to back down
and give people things.”

For policies backed by progressive groups to be successful, ongoing
support must come from everyday people organized together, said the
Tenant Network spokesperson.

“While there's been some grassroots level organization, good
political organization, and good electoral work, there has not been
enough pressure and organization from everyday residents and renters
from below, to create these conditions,” the spokesperson told _The
Lever_. Looking at the recent developments with the pilot program,
they said that “new public housing will create communities where
working class people can live and work and play and it'll actually
strengthen those communities to continue to build new connections.”

Housing “To Live, Work, And Play”

Kallman said that the newly passed pilot program ought to be thought
about within the context of the bill as a whole, with the housing plan
moving “the needle on a bunch of interconnected issues.” Pointing
to the bill’s inclusion of labor standards and attention to transit,
she noted that the state housing department would consider housing as
part of a broader set of social conditions to improve the strength of
Rhode Island’s public systems.

The $10 million for a pilot program is just a fraction of the $300
million initially proposed for the Create Homes Act. However, the bill
was introduced with just a month of session left and the pilot program
passed with quick support from more moderate Democratic leadership, so
there may be support for expanding the program next year.

According to Jordan Goyette, political director for Reclaim RI, the
pilot program is expected to generate 150 to 200 units of low-income
public housing for people in the state.

Goyette also stressed that the bill will be central to making the
economy work for people at a time when the pandemic and inflation are
making things difficult. “Especially when we've seen recessions hit
us, and you know the [Federal Reserve] just raised interest rates,
basically asking for a recession, we've seen meaningful construction
die off,” Goyette told _The Lever_.

“This legislation will temper or even effectively make the
construction industry recession-proof by kicking off prevailing wage
requirements, having strong labor standards for the prevention of wage
theft, and having strong apprenticeship standards,” added Goyette.
“This will really be a boon to the working local economy.”

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IF YOU LIKE THIS STORY, PLEASE SUPPORT __OUR__ WORK._
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* Building Public Housing in Rhode Island; Housing; Rhode Island;
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