Councilman David Salvatore’s Call for the Creation of a Dedicated Revenue Stream to Fund Affordable Housing in FY21 Budget Passed by Council
Councilman David A. Salvatore (Ward 14) introduced a resolution tonight’s City Council meeting that would allocate 50 percent of all retained real estate conveyance taxes to the Providence Affordable Housing Trust Fund and was passed by the Council.
“The City realizes nearly $2 Million in revenue from the state’s real estate conveyance tax every year and has not used any of those funds to help solve our housing crisis,” stated Councilman David A. Salvatore. “Providence is on the edge of falling deeper into a housing crisis which we may never be able recover from – unless we act now.
The 2019 Housing Fact Book, produced by HousingWorksRI, shares startling statistics on what it truly costs to live in the City of Providence. Salvatore noted that households making less than $100,000 a year cannot afford to buy a home in Providence’s East Side neighborhoods, limiting which communities families can reside in. The Fact Book also provides detailed information about housing affordability in other neighborhoods of Providence, revealing that households need more than $60,000 annually to afford a home in the capital city.
“These numbers are even more frightening when you realize that the median household income in Providence is around $40,000 a year. It’s time that we put our money where our mouth is,” said Councilman Salvatore.
For every $500 of value on real estate sold within the state of Rhode Island, a $2.30 conveyance tax is imposed upon the seller, of which $1.10 is retained by the municipality in which the property was sold. For example, if a home is valued at $100,000, the municipality collects $460 in conveyance tax, and would retain $220. Councilman Salvatore is proposing that Mayor Elorza allocate 50 percent of the City’s portion of the conveyance tax to the Providence Affordable Housing Trust Fund.
The Providence Affordable Housing Trust Fund provides funding for the construction, development or financing of affordable housing for families earning less than 120% of the area median income. At the request of Councilman Salvatore, the City’s Internal Auditor communicated to the City Council that during the fiscal years 2010-2019 Providence has retained over $16 Million through the state’s real estate conveyance tax.
Councilman Salvatore continued, “This is not rocket science – we have an affordable housing crisis in the City of Providence – but those of us in power just talk about it. We need to actually do something about it. My proposal is an actionable item that we can take as a City to help our neighbors and prospective residents. Affordable housing is a human right and it’s an integral part in ensuring safe, resilient, healthy, and dynamic neighborhoods.”
Salvatore will continue fighting for ways to invest in affordable housing and is preparing legislation that will codify this resolution into law, ensuring that there is another guaranteed dedicated funding source for the Providence Affordable Housing Trust.
To learn more about the HousingWorksRI Fact Book: READ MORE