Housing Department’s late submission led to outdated numbers on affordable housing

PROVIDENCE —  A Senate Fiscal Office report released last month suggested the Rhode Island Department of Housing was sitting on $90 million in unspent federal pandemic relief funds meant for affordable housing.

That raised alarms because all funds obtained through the American Rescue Plan Act (ARPA) must be spent by the federal government’s deadline at the end of 2026 or sent back to Washington, D.C.

But on Thursday afternoon, Housing Secretary Stefan Pryor reassured a state panel that the Rhode Island Department of Housing is on track to commit all of its $321.5 million in pandemic relief funds toward new projects by the end of the year. The challenge will be ensuring the money is all spent, he told 15 members of the Special Legislative Commission to Study Housing Affordability.

At least, the challenge is not Rhode Island’s alone.

“That is more challenging for every jurisdiction across the country,” Pryor said.

Pryor said 98% of the $321.5 million has either been expended, committed to specific projects, or is in the process of being awarded through a request for proposals.

Expenditures include the construction of 1,600 new homes, giving down-payment assistance to 1,500 first-time home-buyers, and increasing the state’s emergency shelter capacity for the winter — along with administrative work.

“Expenditures in a housing development context are not necessarily exclusively associated with ribbon-cutting,” he said.

That leaves $5.4 million unspent, according to data provided by the Housing Department. 

The Senate Fiscal Office report stated more than $90 million of ARPA money was unspent as of Dec. 15, 2023, when the report went to press. The big discrepancy is because the Senate report did not have updated information and even indicated that the Housing Department did not respond to its requests for information.

The Senate Fiscal Office had asked the Department of Housing for the data on Oct. 5  with a two-week deadline, Senate spokesperson Greg Paré said Friday.

Housing Department spokesperson Patti Doyle said Thursday evening that figures were submitted to the Senate Fiscal Office on Dec. 16. Paré said the date was Dec. 26.

“The governor said repeatedly that not one penny is going back to the federal government on that funding,” Commissioner Brenda Clement said.

Local goal-setting

Pryor said large-scale projects are progressing, just slowly. On average, he said construction takes between 26-34 months to complete because of unanticipated site conditions, increasing costs, and approvals at the local level.

So how can the state spur new construction? Better coordination with Rhode Island’s 39 municipalities.

The state mandates that affordable housing constitutes no less than 10% of the total units in a given development. Pryor told his fellow commissioners most municipalities are satisfied with only meeting that minimum because there’s no reward.

“Many jurisdictions that have a higher concentration of affordable housing may wish to build more,” Pryor said. “But there’s almost a disincentive — the system says you seem to say you have satisfied the requirement.”

Pryor proposed to have his department meet with local leaders and set goals that could better incentivize their municipalities to create more affordable housing — something he said the city of Minneapolis did with community groups as part of developing its 2040 Comprehensive Plan.

“They got it done,” he said. 

But that process took around two years and saw a lot of controversy. It’s a process Rhode Island Foundation CEO David Cicilline said the public would reject. “There are going to be pitchforks and rightly so,” he said. 

Cicilline instead suggested the state use existing frameworks to start construction.

ONE Neighborhood Builders CEO Jennifer Hawkins supported Pryor’s idea, saying a housing production increase across the state will require time and attention since each municipality has different needs.

“It’s like we’re chewing gum and walking at the same time,” Hawkins said.

The commission has 20 members, including Pryor. Not present Thursday were House Minority Leader Mike Chippendale, Pawtucket Central Falls Development Executive Director Linda Weisinger, and Central Falls Housing Authority Director Bridgett Duquette.

Correction: A previous version of this story GrowSmart RI Director Scott Wolf was not present at the meeting. He arrived after roll call. Also, an earlier version said incorrectly that the Housing Department submitted numbers to the Senate Fiscal Office a day late. The data was at least eight weeks late.