First Quarter News

2010 Homes and the Economy

Introduction
Some people are calling it the “Great Recession.” Without a doubt, most of us will look back on the past 2-3 years as some of our most challenging times. Surging unemployment, a rising tide of foreclosures, recent flood-waters and declining state and local revenues have left our families and communities struggling to make ends meet. And while some economists predict that we are finally on a gradual slope to recovery, many Rhode Islanders – most of whom have been impacted by these crises – will continue to need help through what will undoubtedly be a long recovery process.

Rhode Island has been particularly hard hit by both the overall economic crisis and the housing crisis, as history once again reminds us that homes and the economy are inextricably linked. Rhode Island’s unemployment remains at a record high level – which is not surprising considering that one out of every 10 jobs in Rhode Island is related to real estate or construction, and the production of homes is dramatically down. And few will disagree that good jobs and good homes that are affordable to working Rhode Islanders are essential for long-term economic growth and stability. Before the recession hit, Rhode Island suffered a stifling shortage of affordable homes. In 2005, our state suffered a staggering deficit of 13,000 homes that were affordable to the average working family. In 2008 and 2009, only about 2,000 new homes were permitted – and those numbers included high-end homes.