Since the pandemic, homelessness in Rhode Island has risen significantly, making it clear that our investment in homelessness response is more important than ever. One-time State Fiscal Recovery Funds allowed us to make important progress: expanding emergency shelters, creating prevention and diversion programs, and providing critical support services. But those temporary funds have been expended. Without new, sustainable sources of funding, the progress we’ve made is at serious risk.
Recognizing the need to act, Gov. Dan McKee has proposed two revenue streams to more than double the state-funded resources for homelessness response, helping mitigate the gap that will exist once federal sources end. The proposals are more than fiscally responsible; they are morally necessary. All Rhode Islanders need a safe, secure place to sleep every night.
Revenue to support homelessness services
The first proposed funding stream would extend the existing 5% state hotel tax to whole-home short-term rentals ‒ which are currently exempt. This change, set to take effect on Jan. 1, 2026, would create a fairer lodging tax structure while generating critical revenue to support homelessness services ‒ all without placing new costs on year-round residents and bringing in $4.7 million annually for homelessness supports. In some communities, the loss of housing units to short-term rentals has exacerbated the housing crisis in Rhode Island, so it is logical that the revenue from closing this tax loophole would address homelessness fueled by a lack of housing.
The second proposal would modestly increase the real estate conveyance tax on properties selling for over $800,000 ‒ from 0.92% to 1.25%, bringing Rhode Island in line with neighboring states and generating an estimated $3.4 million annually in additional revenue for homelessness.
Solution to homelessness cannot wait
The recent rise in homelessness across Rhode Island stems from decades-long housing challenges ‒ including a lack of production and restrictive zoning, which have contributed to rising prices. While the long-term solution to homelessness is addressing these housing challenges, our most vulnerable neighbors cannot wait…