Multifamily houses are shown on Federal Hill in Providence. The median price of a multifamily home in Providence in the fourth quarter of 2023 was $530,000, up 21% from $438,000 in the fourth quarter of 2022, according to the State-Wide Multiple Listing Service, Inc. (Kenneth C. Zirkel/Wikimedia CC)
Editor’s note: This is the first installment of four commentaries on Gov. Dan McKee’s proposed fiscal 2025 state budget.
Home prices are so high that ownership is out of reach for many Rhode Islanders. Nearly half of all renters spend more than 30% of their income on housing. It’s been estimated that the state needs 24,000 more affordable units to meet demand. Unfortunately, the problem appears to be worsening. In the last year, home prices in Rhode Island have increased 7.5%, and rents have jumped dramatically, with Providence reportedly having the highest rent increases nationwide.
Rhode Island’s housing affordability problem has resulted primarily from a lack of housing production over a long period of time. The Ocean State ranked 38 th among states in per capita housing production between 2012 and 2021, and in 2021 — the most recent year for which data are available — we ranked last in the nation . In terms of affordable housing production, Building Homes Rhode Island , the state’s primary affordable housing program, built or maintained an average of only 215 affordable units per year from 2006 to 2020.