Rhode Island authorities have wrestled with the issues of
managed growth and affordable housing for a number of years.
In 1991, the State's General Assembly passed a law that enabled
developers to request a streamlined review process for affordable
housing applications. This law also allowed developers to
appeal denied affordable housing applications to a State Housing
Appeals Board. When this law failed to spur the development
of sufficient affordable housing, the General Assembly amended
it in an attempt to increase production. The resulting requests
for development permits overwhelmed local governments so much
that the legislature had to again amend the law. In this latest
action, the General Assembly attempts to balance the need
for affordable housing with the ability of the local and state
governments to make effective, well thought-out land use decisions.
The Low- and Moderate-Income Housing Act was enacted by the
Rhode Island General Assembly in 1991. This Act was modeled
after Massachusetts' 40B law, and it gave certain nonprofit
developers of affordable for-sale and rental projects, as
well as for-profit developers proposing affordable rental
projects, access to an expedited review process known as comprehensive
permitting. The law defined affordable housing
as housing with federal or state subsidies, affordable to
households with low and moderate incomes, and having an affordability
period of at least 30 years. A minimum of 20 percent of the
units in the proposed development had to be subsidized. In
reviewing these comprehensive permitting applications, municipalities
had only four
reasons to deny a request for a comprehensive permit. Even
if denied, developers had the right to appeal directly to
a newly created State Housing Appeals Board (SHAB).
This law also encouraged, but did not require, each municipality
to reach a threshold of at least 10 percent affordable housing
units. It allowed municipalities with 10 percent affordable
units - or a plan to reach the 10 percent goal - the authority
to use one or more of these four reasons as grounds for denying
a comprehensive permitting application.
Early Results: Few Changes
According to Amy Rainone, Policy and Planning Manager with
the Rhode Island Housing Finance Agency, the 1991 law did
little to increase the production of affordable housing in
the state and little to promote effective planning for new
affordable housing. Roger Warren with the Rhode Island Builder's
Association said that the 1991 law had no effect on affordable
housing development. Scott Wolf, Executive Director of Grow
Smart Rhode Island, said that there were three reasons for
- The law did not make the 10 percent goal mandatory for
municipalities. The state regularly approved local comprehensive
plans whose housing elements did not clearly indicate how
municipalities planned to meet the 10 percent goal. In addition,
the law did not require the state to assist communities
in planning for the 10 percent goal.
- Limiting projects to those with federal or state subsidies
severely limited the projects that would be eligible for
- The 1991 law's applicability was restricted to nonprofit
organizations, which had limited development capacity.
2002 Revisions and Results
In 2002, the General Assembly revised the law to permit for-profit
developers to use the comprehensive permitting process for
applications linked to for-sale projects. Under this new law,
however, local governments were inundated with new applications
that they were not able to process within the mandatory time
period. According to Wolf, many of these proposals contained
requests for significant density increases, in the context
of relatively large developments. Warren's position is that
the amendments to the Act in 2002 released pent-up demand
for housing in the state. He estimates that developers asked
local governments for approval to construct approximately
5,000 units, of which approximately 1,000 would have been
affordable. Warren estimates that this number was about 2½
times the number of housing units being built annually in
Rhode Island but better represented the true demand for housing
unfettered by local regulatory barriers.
Many communities were alarmed that the comprehensive permitting
process did not provide adequate review for high-density residential
developments that for-profit developers were submitting. They
also believed that the process allowed for-profit developers
to circumvent local zoning. Warren says that the law took
away none of the local communities' land use regulatory authority
and that they continued to be able to control the development
process. After the 2003 General Assembly's efforts to amend
the law failed, opponents called for various revisions, including
eliminating the law altogether and removing for-profit developers
from the comprehensive permitting process. In February 2004,
the General Assembly passed a moratorium on new applications
from for-profit developers until January 31, 2005. At the
same time, the General Assembly required municipalities that
had not reached the 10 percent affordable goal to develop
detailed plans for achieving that goal by December 31, 2004.
Further Statutory Reform Efforts In 2004
The moratorium provided the General Assembly time to enact
a new law in June 2004. This new law seeks to balance the
local government's responsibilities to plan for affordable
housing with the need for that housing. Some of the most significant
provisions are described below.
New State Responsibilities
As part of a long-range solution, the June 2004 law strengthens
state efforts to encourage planning for affordable housing.
It charges the Housing Resources Commission and the State
Division of Planning with developing a statewide strategic
plan for housing. That strategic plan must include quantifiable
goals and measurable steps toward meeting those goals. It
also requires the Housing Resources Commission to recommend
guidelines for higher-density development to address infrastructure
demands, land capacity, and environmental protection issues.
The law further requires the State Division of Planning to
coordinate and oversee technical assistance to municipalities
that are creating housing plans, and to provide data upon
which municipalities can base their new plans. This makes
the Rhode Island Housing Resources Commission responsible
for developing housing; providing housing technical assistance;
and for annually reporting on the number of applications issued,
units constructed, and units planned for the following year.
New Municipal Responsibilities
The June 2004 law strengthened requirements that municipalities
adequately plan for affordable housing. The law retains the
requirement that all municipalities that have not achieved
the 10 percent goal must complete an affordable housing plan
by December 31, 2004. It also requires that the local review
board report annually to the Housing Resource Commission concerning
the plan's implementation status. Once the state's strategic
plan is completed and adopted in 2006, the law requires municipalities
to bring their local comprehensive plans (which includes housing
plans) into conformity with the state strategic plan.
New Municipal Authority
The June 2004 law gives municipalities whose affordable housing
plans are approved by the Housing Resource Commission the
authority to determine the location and density of affordable
housing, as follows:
- The new law extends the moratorium on for-profit applications
to July 1, 2005.
- Once the moratorium is lifted, local review boards and
the State Housing Appeals Board must use the local housing
plan as the standard against which they will evaluate proposals.
- The law also clarifies the comprehensive permitting review
process and makes it more consistent with reviews for conventional
- The law increases the minimum number of affordable units
required from 20 to 25 percent of the development.
- The law allows municipalities to require pre-application
conferences for major projects. It clarifies what information
developers should submit.
It also authorizes a municipality with state-approved affordable
housing plans to limit the annual aggregate number of units
in for-profit comprehensive permit applications to 1 percent
of the total year-round units in the municipality.
- The law allows municipalities to review applications from
for-profit developers in order of receipt.
Rhode Island's recent experience with streamlined permitting
has been mixed. Early in the program, restrictions led to
too little development. Reforms in 2002, meant to encourage
development, unleashed a torrent of development proposals.
Further changes in 2004 placed additional demands on the development
community, but also obligated the local governments to plan
for and accommodate the development of affordable housing.
Warren said that the new law should make it more difficult
to avoid planning for more affordable housing. Warren stated
that his association is part of an oversight group that will
be monitoring the development and implementation of local
affordable housing plans. He concluded by observing that,
"The jury is still out [on the effectiveness of the new planning
requirements], but I hope it will result in more affordable
housing in Rhode Island." In future issues of Breakthroughs,
we will revisit Rhode Island to determine if these new laws
have adequately balanced the need for affordable housing and
the need to appropriately plan for new development.