Sen. Bell releases report on Rhode Island turning away $197M federal grant for affordable housing

PROVIDENCE, R.I. (WLNE)- A report released by Senator Bell details how Rhode Island has left $197 million in federal funds for affordable housing projects unused every year.

The report explains that under the 4 percent tax credit program of the federal Low Income Housing Tax Credit, Rhode Island would be eligible for an average of $197.3 million per year.

“From 2014 to 2020, Rhode Island was eligible for up to $1.553 billion in 4 percent tax credit funds, but we only spent $171.4 million, turning away a total of $1.381 billion.  That works out to an average of $197.3 million of federal funds turned away each year,” said Phoebe Dragseth, an intern who worked on the report with Bell.  “With the housing crisis roiling Rhode Island, now is not the time to turn down federal funds allocated to our state to build affordable housing.  Rhode Island must act fast to put in place the policies necessary to maximize the 4% credit federal funding stream.”

“For years, we have struggled to bring affordable housing production to the scale where it will meaningfully mitigate the housing crisis.  Excitingly, our results show a path forwards to get to scale,” said Senator Bell. “By taking advantage of the massive 4% credit federal funding stream, we can vastly increase our affordable housing production to the point where it will begin to seriously slow down the housing crisis.  Affordable housing is a big problem.  It is an expensive problem.  To solve this challenge, it will take a significant investment.  That is why it matters that we have such an enormous amount of federal funds available.  We have the money.  We just need to stop turning it away.”

Senator Bell and Dragseth’s report explains that the federal funding not being utilized is due to insufficient state funding for affordable housing, not utilizing state affordable housing funds to help make the 4 percent credit project work, and a heavy reliance on the private market to take advantage of federal programs.