Expanding
Housing Supply

Providence’s Housing Trust Fund, administered by the Providence Redevelopment Agency (PRA), has played a critical role in supporting the construction of affordable housing in neighborhoods across the city. With investments from the American Rescue Plan Act (ARPA) and the 2021 Housing Bond, the trust fund has helped fill financing gaps for projects serving the residents who need housing most.

Much of this work was only made possible through the leadership and capacity of nonprofit housing developers and community development corporations (CDCs), whose deep roots in Providence neighborhoods have been essential to delivering housing where it’s needed most. Recognizing its importance, the City Council recently strengthened the fund by lowering the income eligibility threshold for rental housing from 120% of Area Median Income (AMI) to 80% AMI. This ensures that its resources reach lower-income families who are often left out of market-rate developments.

Building a Sustainable Funding Model. The Task Force recommends further strengthening the Housing Trust Fund by:

• Expanding gap funding to prevent shovel-ready projects from stalling due to financing shortfalls.
• Dedicating new revenue streams, such as impact fees, short-term rental taxes, and inclusionary zoning contributions, to provide long-term sustainability.
• Leveraging municipal bonds, as seen in Montgomery County, to create a revolving loan fund that directly finances city-led development.

This strategy could give Providence the ability to support more projects like the ones already funded in Elmwood, Olneyville, and the West End, areas where the need is urgent and the community remains strong. These are neighborhoods where a single affordable development can help keep families together, stem displacement, and restore opportunity.

For Providence, linking the Housing Trust Fund to the Public Land Bank and a Municipal Developer would create a more coordinated public development pipeline, aligning public land, public financing, and city-led construction to help fill gaps in the current housing landscape. This would not replace the essential role of CDCs and nonprofit developers, but strengthen the overall ecosystem by giving the city an additional tool to meet urgent housing needs. By working in tandem with trusted nonprofit partners, Providence can accelerate the pace of affordable housing production while maintaining its commitment to community-led development.

Providence’s affordability crisis cannot be solved without increasing the supply of housing that is affordable to working-class residents. Inclusionary zoning policies, which require a percentage of new development to be affordable, have helped cities increase affordable housing supply without relying solely on government funding. These policies ensure that new housing construction contributes to affordability rather than solely catering to high-income tenants.

The City of Providence has already committed to pursuing inclusionary zoning as part of its broader anti-displacement strategy. As stated in the Comprehensive Plan (pg 29), the city will “prioritize supplementary anti-displacement strategies such as inclusionary zoning, securing protections for those at risk of displacement, and proactively monitoring affordable units to ensure long-term residents of Providence are not displaced.”

Inclusionary zoning policies vary by city. Some programs are mandatory, requiring developers to set aside a percentage of new units as affordable, while others offer incentives in exchange for voluntary participation.25 Research has consistently shown that mandatory inclusionary zoning policies are more effective at creating affordable housing. Rhode Island state law sets a minimum requirement that 15% of new units in inclusionary zoning developments must be affordable for at least 30 years. However, cities have the flexibility to strengthen these policies to better serve their communities.

The Comprehensive Plan (pg 78) recognizes this, stating that the city should “adopt inclusionary zoning measures that are calibrated with tax and subsidy policy changes to enhance development feasibility.” 26 This approach ensures that inclusionary zoning is designed to be both effective and sustainable, creating affordable housing while maintaining a viable environment for responsible development.

To ensure the success of inclusionary zoning in Providence, the Task Force recommends that the City Council:

• Implement a strong inclusionary zoning ordinance that expands affordability requirements beyond the state minimum where feasible.
• Calibrate policies with tax and subsidy incentives to improve development feasibility while maximizing affordability.
• Ensure public land is prioritized for mixed-income housing developments that include deeply affordable units with long-term affordability guarantees.
• Regularly monitor and adjust inclusionary zoning policies to ensure they remain effective in addressing affordability needs and preventing displacement.

While inclusionary zoning must be carefully calibrated to ensure that development remains feasible, cities that pair affordability mandates with thoughtful tax policy or land use incentives have shown that it can be both effective and sustainable. Providence should monitor market conditions closely and adjust its inclusionary zoning requirements as needed to avoid deterring new construction while still prioritizing affordability. By combining public investment with private-sector development, Providence can ensure that new growth benefits the residents who have built its communities, rather than pricing them out.

In recent years, an increasing share of Providence’s tax-delinquent properties have been snapped up by large, out-of-state corporate investors through online tax lien sales. This process, once a tool for local governments to recoup unpaid taxes, has instead become a lucrative industry for institutional investors who use it to acquire properties at bargain prices, often at the expense of vulnerable homeowners.

Unlike individual buyers or community-based organizations, these investment firms treat delinquent properties as financial assets rather than homes, frequently flipping them for profit or renting them at inflated rates. Some firms even bundle liens into securities to be traded on financial markets, further distancing property ownership from local communities. This trend has led to increased evictions, displacement of long-term residents, and the further erosion of homeownership opportunities for working-class families.

The consequences of this corporatization are already visible. While BlackRock acquired six tax liens in Providence in 2024, the scale of bulk purchasing is even more concerning: 93 of 179 tax liens were acquired by just six entities, with 80 of those liens consolidated among them. In one particularly egregious case, two individuals registered at the same address secured 40 liens in a single sale. Based on trends from 2023, over 40% of these liens are likely to go unpaid, increasing the likelihood of foreclosure and eventual title acquisition by speculators.31a 31b

The mechanics of these sales exacerbate long-standing inequities. Elderly, Latino, and African-American homeowners —many of whom have already faced decades of undervaluation, over-taxation , and systemic barriers to wealth accumulation—are disproportionately vulnerable to dispossession via tax sales. Those without the means to pay off their arrears often struggle to navigate bureaucratic relief systems, and once a lien is sold, the process of redemption becomes even more complex. Meanwhile, online tax sales streamline access for institutional investors, allowing them to dominate auctions with minimal effort while pricing out prospective homeowners and smaller landlords who might otherwise use tax sales as an entry point into homeownership.

Providence’s online tax sale process, introduced in 2020, has only accelerated these trends. Unlike in-person auctions, where bidders must be physically present, online sales have lowered the barrier for out-of-state and multinational investors to acquire local property debt. With the click of a button, corporations can outbid local buyers, further consolidating property ownership in the hands of financial firms rather than families. Other cities, such as Boston and Washington, D.C., have recognized these dangers and implemented reforms to limit the ability of institutional investors to exploit tax sales for profit.

To address these concerns and realign the tax sale process with Providence’s broader housing justice goals, the Task Force recommends that the City Council:

• Ban online tax sales that disproportionately harm low-income homeowners by facilitating largescale corporate acquisitions of tax-delinquent properties.
• Limit the number of tax titles any single buyer may acquire at a given sale to prevent bulk purchasing by corporate investors that crowd out local buyers and first-time homeowners.
• Grant community development corporations (CDCs) a right of first refusal to purchase tax-delinquent properties before they are auctioned to speculative investors.

These reforms will curb the rapid consolidation of property by institutional investors, prevent displacement, and ensure that tax-delinquent properties remain a source of affordable housing rather than a tool for financial speculation. By restricting bulk acquisitions and eliminating online tax sales except in emergencies, Providence can prevent predatory investors from using the tax sale system to accelerate gentrification and further destabilize the city’s housing market.