Some Unanswered Questions on Housing


Perhaps it’s healthy every now and then to post something without implying that one knows how to fit it into a mural of opinions.  If so, I’ve found an opportunity in this news:

Rhode Island’s median house price jumped 13 percent in March, rising to $265,000, as the inventory of houses for sale plunged by 16 percent, compared to March 2017, the Rhode Island Association of Realtors reported Thursday.

Naturally, the realtors’ association suggests the problem is that they need more properties to sell.  In general, the trend would seem to count as contrary evidence to assertions that the state is losing people.

Both economic curves that bear on price come into play, here: supply and demand.  It could be that people want to buy property in Rhode Island, and that’s driving up prices.  Or it could be that regulations are too restrictive to allow sufficient expansion of supply.  And referring to “regulations,” we have to expand the term not only to mean direct zoning restrictions and the like, but also other regulations, like licensing restrictions that drive up the cost of building.

Too many threads must be unwoven, here, for a rainy Thursday, and I don’t have a quick answer.  I continue to hold that people should have a right at the local level to determine what sort of community they live in.  (Although, I’ll generally argue against using that right to hamstring your neighbors.)  I’d also suggest that we do too much to subsidize some construction while restricting different kinds of construction (say commercial versus residential), and much too much to prevent the economy from growing quickly enough for people to be able to afford housing.

My suspicion, in other words, is that all of Rhode Island’s economic meddling is doing something to focus economic value unnaturally on housing.  I also suspect the people who benefit from that state of affairs would be much better able to explain it.

  • Rhett Hardwick

    I don’t think the average person is aware of the regulation on building. Zoning Boards, Planning Boards, Conservation Commissions, Board of Health, Building Departments, etc.. Then there are wetlands and “resource areas”, often coupled with overlay districts such as “Nitrogen Retention Zones”. An example of costs. A friend recently did a 13 house subdivision in nearby Massachusetts. The Conservation Commission hit him with a $500,000 “Order of Conditions” to “cross” wetlands.(Kind of a “gotcha”, you have a “right” to cross wetlands of less that 5000 feet, but they can hit you with an “Order of Conditions”) Divide that by 13 to see the additional cost for each house. The Massachusetts papers also speak constantly of “no inventory”.

    • Christopher C. Reed

      “It’s a free country”…until you actually try to build something.

  • Rhett Hardwick

    You live on an island, no fair comparison can be made with Foster, or Burrilville.

    • Guest

      Rhett Hardwick,
      You are right as I now live on an island approximately 3/4 landmass size of RI (remove the east bay of RI and what’s left is my island). However 2006 is when I sold my Woonsocket house, northern RI which if I remember correctly Foster or Burrillville is part of northern RI so the fact of 12 years and the housing market has not recovered in RI I believe is correct.

      Yes it would not be fair to compare RI to my new state of HI which is 10 times the landmass size of RI stretching 1,500 miles across 132 non-connected islands, only true Ocean State made up of all islands in nation with 4th longest (750 miles) waterfront, 1 state goverment, no state police force, 4 municipal governments and 1 unified state-wide school district operated by state government.

      There are over 600 expat Rhode Islanders living on my island as the state census population is 1.4 million residents more than RI total census and our unemployment is lowest in nation at 2.1%. There are over 250,000 tourists and visitors here daily at any given time infusing our economy with over $18 billion per year and to put that in perspective our state fiscal budget is $14.9 billion per year based on collected resident taxes.

      I live in the country (like Foster and Burrillville) but a 40 min drive I am in the glitz and glam of Las Vegas and New York City party life of open 24/7 Waikiki Beach. It cost a whole lot less to live in country than in the city. Most of the new single family houses and condominiums being built are outside of the city. It is the older single family houses and condominiums that have location, location, location that are driving the $millions prices.

  • Rhett Hardwick

    There is something to do with where we live. Outside of New England most Wetlands matters are handled by the Army Corp. If they do not respond to a wetlands “problem” within 30 days, you are free to move forward. When it comes to matters such as puddles which dry up in May, they do not respond. Federal EPA law permits states to form their own EPA’s so long as the restrictions are stricter than the federal regulations. There must be something about the politics in New England that we have seized on the opportunity for further regulation. I am old enough to remember the TV spots pushing “wetlands regulation”, they showed salt marshes and birds. 30 years later, a seasonal puddle in your yard will do it.

  • artyatsko

    Odds are the neighborhood you grew up in can’t be replicated in your hometown. Most vacant space isn’t zoned “pro-family”. If you are lucky enough to own one of these homes and are looking to retire it will be hard to find a smaller, one level dwelling near by. Zoning laws haven’t anticipated people’s needs. The NIMBY and BANANAS phenomenon have played well with those who wished to control the tax rates by zoning out the children. Very large lots typically require larger homes to justify the cost of the land. These homes pay higher taxes and send less kids into the school systems. Most current zoning leaves us with no new homes that working class families can afford and nowhere for retired couples to downsize to. Empty-nesters stay put and their extra bedrooms and baths stay empty. State and local governments give tax breaks to encourage seniors to stay in their homes. Municipalities that have played this game well have actually close schools and layoff workers.

    The building regulations also play a role. Today’s new home has a lot more features than one built in the 50’s. Extra insulation, hardwired smoke/monoxide alarms, multiple circuits to kitchen, ground fault outlets, arc fault circuits everywhere else, etc. Interesting that the house you grew up in would never get a Certificate of Occupancy if you were to build an exact replica (and not just because of the lead paint and asbestos pipe insulation). Of course you probably couldn’t get a building permit to put your replica on the extra lot you own next door because they changed the zoning to keep out anymore of “your kind” 😉

    • Guest

      What you say may all be well and true on the mainland and in the state you live in (I am a former municipal building inspector so I’ve worked with codes and zoning) but it certainly does not apply to my new state HI. I live on Island of Oahu 599 sq mi but only 30% of island is developed and it is the most cosmopolitan of all the 8 heavily populated islands.

      A lot of pre-development planning has been in play since early 1960s with the state and city recognizing downtown Honolulu and tourist section Waikiki Beach would outgrow their spaces so a new modern designed second city and modern designed second Waikiki Beach were developed interconnected with a high speed elevated modern light rail system.

      For first phase over 750,000 single family houses of all shapes and designs for young, middle age and retirees are under construction along with condominiums in workforce, low income, middle and high income ranges, retirement communities, developed neighborhoods with bike and walking trails, new schools, medical, small business, government services, parks, golf courses, soccer and baseball fields, football fields, dirt bike tracks, skateboard parks and community swimming pools plus community gyms. Regional malls are being added by developers and new hotels by investors. The design of the city is low key keeping with the laidback life style. Cellphone towers are hidden in fake palm trees or blended into high rise buildings plus it is illegal to erect a billboard in Hawaii or tow a billboard from an airplane.

      The whole idea is to provide for next the generation to live, work, shop, play and retire without having to leave their neighborhood and get stuck in traffic jams. The high speed light rail provides 20 miles of green energy travel between all of the University and college campuses plus travel to major employer places of business, the Aloha Stadium Complex, old Honolulu downtown, world’s largest open-air shopping mall, international Airport, international ship and cruise docks and international tourist destination Waikiki Beach. All light rail station stops are synchronised with public transit system ranked best in U.S.A. twice and new Holo transit card universally accepted on all public transit systems in state.

      Over 44 high rise condominium towers are under construction in the old city with prices skyrocketing due to location but in new city area prices are reasonable as they are in the country areas except where you get into prime locations then the sky is the limit. Hawaii has some of the lowest property taxes in the nation mainly because the school system is not funded via municipal taxes. All new single family houses must have solar hot water system and by year 2045 all electricity in Hawaii will be generated with green energy.

    • Mike678

      More communities are building 55 or older developments to fill the need for such housing. East Greenwich is one, and I’ve heard others built/proposed in surrounding areas. Perhaps late to need…