No relief in sight? Rising RI rental costs for houses and apartments

Kenny has lived in his truck in Warwick for two years.

Every morning, if he can afford it, he buys an English muffin for breakfast. For lunch, it’s a supermarket sandwich. For dinner, a bowl of soup.

Every Sunday, he packs his laundry and goes to a laundromat, setting aside the $ 4 to $ 5 needed for washing and drying.

He then folds the clothes and places them in two containers in the back of his truck – one for streetwear and one for work. He prefers to iron them, but he does without.

This is what Kenny calls his “system”.

“There is no sympathy for me,” he said. “I don’t give myself any sympathy. I do what I have to do, and that’s it. Simple. Come on. “

Kenny, who wanted to keep his last name private, is a product of the housing crisis in Rhode Island, which not only afflicts potential buyers, but tenants as well.

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From spring to summer, Kenny searched for apartments, finding only a few affordable options, all of which came with a trap.

A one-bedroom apartment in West Warwick cost $ 1,100 per month, with a shared bathroom and a shared heating bill, and no guarantee that the bill would be evenly split among tenants.

Another unit in an East Providence basement was priced at $ 900, although Kenny was concerned about the security deposit and warnings about sky-high electricity costs.

Another one-bedroom apartment in an East Providence house cost $ 1,500, plus an additional $ 600 per month for a one-car garage, more than double the average cost of monthly parking in downtown Providence.

Vacancy rate at an extremely low level in the Rhode Island rental market

A glance at the numbers shows why those looking for apartments fail: There is simply no inventory.

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According to a 2021 report by HousingWorks RI at Roger Williams University, an organization championing affordable housing, the rental vacancy rate across the state fell to 2.2%, with a healthy range of 5% to 8%.

In addition to fewer options, the list of cities where rent is affordable is shrinking. Burrillville is the only place left where someone earning a state’s median tenant income of about $ 36,000 a year would not be overburdened with costs – a reality that afflicts nearly 50% of renters.

Most of the state’s rental stock was built before 1980, and new construction has largely focused on luxury apartments.

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Brenda Clement, director of HousingWorksRI, attributed part of the problem to the bureaucracy.

“We have by-produced not only because of lack of money, but also generally because of regulatory and zoning barriers, especially at the local level, which have also prevented or slowed denser development or zoning development. multifamily. “

Leasing becomes as competitive as buying

As demand increases, those looking for rentals are faced with an increasingly competitive environment that has started to reflect the landscape of home buyers.

Mac MacDougall, a Century 21 real estate agent, said the highest and best bids are now accepted for rentals, which may have five or more applicants vying for a single unit.

While low-income renters may be eligible for financial assistance, middle-income earners are caught in a bind, unable to find help at a time of sky-high costs.

“There are a lot of jobs in Rhode Island that keep people under $ 50,000, even $ 60,000, and they have a few kids,” MacDougall said. “It’s just [a] very intimidating experience to try to get somewhere and earn that little bit of money. Then they are not entitled to any help because they are earning too much.

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It’s not just the prices that are going up; the qualification bar is also rising.

According to MacDougall, it’s common for his clients to ask tenants to have a credit score of 650 to 700 as a minimum.

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Despite the strict requirements, Gabe Francis, an agent for the Lenox Realty Group, finds that his ads attract an overwhelming wave of responses.

“If you offer an apartment at a reasonable price, you will receive more phone calls than you have ever seen,” he said. “I have to close the ad because I can’t even read my emails.”

Francis, who has been in the business for over two decades, said when it comes to the rental market “I’ve never seen it the way it is.”

Ask who is looking for apartments and the responses from agents are mixed, from college students who are back on campus to remote workers in cities like New York and Boston trying to cut costs in Rhode Island.

“Then you have buyers who have dropped out of the market because the market is so high right now, they’re like, ‘Well, maybe I’ll just rent for a little while and calm down. added MacDougall. . “And I think these people, they’re the ones with the highest credit scores, they make a lot of money and everybody wants them.”

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Like the various projections on the end of the home buying craze, rental market experts don’t seem to have a clue when what has gone up will end up going down.

Marty Saklad, broker and co-owner of Providence’s Samson Realty, is not optimistic that any change in the market will be moderate.

“When the pendulum swings it goes too far in any direction,” he said. “So when people think [they’ll] having a soft landing never happens. It always goes from feast to famine.