The City Council voted this evening to pass a change to the Code of Ordinances, giving authority to the Providence Redevelopment Agency (PRA) to borrow up to $20-Millon to capitalize the Providence Affordable Housing Trust Fund (Fund). The Council’s Committee on Ordinances, chaired by Majority Leader Jo-Ann Ryan (Ward 5), moved for full council approval of the amendment to the Code of Ordinances at their meeting on Tuesday, September 22, 2020.
“The City Council is making a historic and meaningful commitment to addressing the shortage of affordable housing,” stated Majority Leader Ryan. “The Fund was created by the City Council in 2019, in collaboration with its affordable housing partners, earmarking 10% of all TSA payments to provide the basis for the Fund. The $20 Million is anticipated to make up to 1,500 affordable homes possible in the next three years for Providence residents. The Fund is intended to provide critically needed gap financing to encourage the production, preservation, and protection of affordable housing. I want to thank Deputy Majority Leader Mary Kay Harris, my fellow committee members, our affordable housing partners, City finance teams, and Council colleagues past and present for their hard work on this important topic.”
“Affordable housing is a basic human right,” stated Deputy Majority Leader Mary Kay Harris (Ward 11). “I have been working on equity in housing for far too long, and this is the first major investment that I have seen made to address the issue in our City. I want to thank my Council colleagues for supporting this measure and their steadfast dedication to ensuring that we do all we can to address this pressing need. During the Fane Tower hearings, many residents spoke up and spoke loudly about the need for affordable housing, and I heard them. As we live through this pandemic, where so many are out of work, and where housing insecurity is coming into full focus, I am beyond proud that this body has acted and can take such a monumental step for our residents.”
The change to the Code of Ordinances approves the Providence Redevelopment Agency (PRA) to seek a bond of up to $20 Million to capitalize the Council’s Affordable Housing Trust Fund. The Fund, created in 2019, is an important City Council initiative that ensures that developers seeking tax relief are also investing in the City through their Tax Stabilization Agreements (TSAs). These agreements provide a structured tax phase-in for large scale development in the City and include specific clauses whereby the developer must invest into the Affordable Housing Trust Fund, the Parks and Recreation Trust Fund, and meet a host of other obligations. Ten percent of the TSA’s total estimated value must be deposited into The Fund, which is managed by the PRA.
City Council President Sabina Matos stated, “TSAs are an integral part of growing our City and our tax base. Yet, it is imperative that developers also invest in the community. When we created the Affordable Housing Trust Fund, we did so to ensure that our investors were putting skin in the game and that we were creating a dedicated funding stream to create much needed affordable housing units in Providence. By moving forward with this ordinance to allow capitalization of The Fund, we will be able to do just that. I want to thank Deputy Majority Leader Mary Kay Harris for her tenacity in shepherding this important legislation through the Council.”
The additional bond funding could allow for nearly 1,500 affordable housing units to be added to the City’s housing stock. The PRA will mandate that all rental units created through this program be rented at 80 percent or less than the area median income (AMI) and no more than 120 percent of the AMI for multi-family homes. This funding is intended to be used as gap dollars to help fulfill the needs of developers and our housing partners, like local Community Development Corporations, to achieve their goal of creating affordable housing units throughout Providence.
Executive Director Jennifer Hawkins of One Neighborhood Builders stated, “Housing stability is the greatest economic challenge our residents face. Now more than ever, we need to ensure families and residents, despite their income, have access to safe, quality housing they can afford. Affordable housing promotes neighborhood stability and enables families and residents to thrive.”
“We are excited to see the City taking such an important step to support the production of much-needed affordable housing in Providence,” said Carol Ventura, Executive Director of RIHousing. “Many funding programs are over-subscribed, leaving developers searching for additional funds to close the gap and move projects forward. This new funding stream will be critical to creating and preserving affordable homes, spurring economic activity and creating jobs.”
This change to the Code of Ordinances will dramatically impact the community and our ability as a City to ensure that affordable housing can be developed and that residents can live and work in Providence without being house burdened.