PROVIDENCE, R.I. (WPRI) — The McKee administration on Friday announced a budget amendment calling for a new low-income tax credit for developers and steering nearly $30 million toward a package of housing initiatives aimed at creating more units across the state.
The new plan was unveiled as an amendment to Gov. Dan McKee’s current $13.7 billion tax-and-spending proposal currently being considered by the General Assembly. Housing Secretary Stefan Pryor said the additional funding for housing is necessary in part because the state has ranked last in the nation when it comes to building permits, a key indicator of housing growth.
“We do need to invest more to yield a better result in housing production overall and as to the building of more affordable housing in particular,” he told reporters during a briefing. “To do so requires great effort. It requires the better organizational structure within government to carry out the work and it requires more resources.”
The budget amendment includes a new low-income tax credit capped at $30 million each year for developers who build projects with units tied to federal low-income standards. Pryor said they estimate the tax credit — which would start showing up as an annual expense in the state budget as early as fiscal year 2024-2025 — would help produce three-to-four new affordable housing projects each year.
But the secretary couldn’t immediately lay out specifics for how many low-income units would be required for each project, saying that it’s tied to a series of federal requirements that would vary depending on what was included in the development.
By establishing the tax credit, Pryor said it would bring the state in line with its regional peers and allow Rhode Island to leverage matching federal funds that are “left on the table” each year.
“This is a very important new element in our set of tools,” Pryor said. “We need this tool in our toolbox in order to emerge from the challenging scenario we’re in and begin to make significant and visible progress.”
In addition to the tax-credit proposal, Pryor outlined a $29 million investment into a package of other programs. The funding would come from a bucket of federal COVID-relief money known as State Fiscal Recovery Funds, or SFRF.
- $4.3 million for projects through the R.I. Infrastructure Bank for public infrastructure projects tied to housing developments
- $4.9 million in grants for transit-oriented developments, which are projects built near bus, rail, and bike infrastructure
- $17 million in competitive grants for a “priority projects fund,” which would go toward “permanent supportive housing for vulnerable Rhode Islanders or housing for special populations such as seniors, veterans, or people with disabilities.”
- $1.4 million to help fund municipal housing fellows, who would provide staffing support for housing at the local level
- $500,000 reallocation to preserve affordable housing units
The proposal will go next to the General Assembly, where it will be considered along with the rest of the governor’s budget. The R.I. House is expected to unveil its adjustments to the proposal in the coming weeks.
Eli Sherman (firstname.lastname@example.org) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.