on 09-27-2008 02:07 
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By JIM BARON
Although housing prices have slipped a bit in the past year, housing is still largely unaffordable for the greater number of Ocean Staters, according to a recent study by HousingWorks RI.
If your family earns the median household income for Rhode Island, $53,568, you can't really afford to buy a home in any of Rhode Island's cities and towns, HousingWorks' 2008 Fact Book states. The median home sale price for Rhode Island in June 2008 was $250,000. In order for a $250,000 house to be affordable, a family would need to earn $79,174, almost one and a half times the median income.
Locally, there are some bright spots.
Nellie Gorbea, executive director of HousingWorks RI, noted that two Blackstone Valley communities, Central Falls and Woonsocket, are among only five in the state that have met the state-mandated quota of 10 percent of their housing stock being classified as affordable. The others are East Providence, Providence and Newport.
The HousingWorks RI report (available on the organization's Web site, at housingworksri.org) lists "Affordable Housing Facts" for each of the state's 39 cities and towns.
For example: The median sale price for a single family home in Pawtucket is $217,500, requiring a monthly payment of approximately $1,730, the report states. To be able to afford that, a family would have to have an income of $69,193. The average monthly rent for a two-bedroom apartment in Pawtucket is $1,096; to afford that, a household would have to bring in $43,840.
In Woonsocket, the typical single family home goes for $221,125, with an estimated $1,758 monthly mortgage and insurance payment. To afford that, the housing advocates say, a family would have to bring in $70,306.
A two-bedroom apartment carries a rent of $956 a month, which HousingWorks estimates would require a $38,240 household income to be affordable.
In suburban Lincoln, a single family house goes for $324,000, which would carry an estimated $2,547 monthly payment for mortgage and insurance. It would take a six-figure income - $101,899 - to afford that, the advocates say. To rent a two-bedroom in Lincoln would cost about $1,073 a month in rent, necessitating an income of $42,920.
It is difficult to determine the affordability of housing in any city or town from the report because it doesn't list the median family income for each community. The 2008 Fact Book lists only the average private sector wage in each community. So unless everybody works in the same community where they live, it is impossible to say how affordable each community's housing is for its residents.
Gorbea explained that statistics for median family income have a lag time of about 18 months, so the figures would not be current. She said the group took the average private sector wage from the state Department of Labor and Training Web site.
The fact book reports that Rhode Islanders' use of sub-prime mortgages caused the state to have the highest number of foreclosures in New England. Sub-prime adjustable loans account for a fraction of the mortgages in Rhode Island - only 7.2 percent - but their prevalence here is over 30 percent higher than in Connecticut (5.8 percent) and Massachusetts (5.4 percent). And 55 percent of Rhode Island foreclosures involve these types of loans.
Gorbea says there is a "slight improvement" in Rhode Island's housing situation in the past year because prices have gone down due to the slumping economy and depressed housing market. The median price of a single family home in the Ocean State dropped from $275,000 last year to $250,000 so far this year.
"But it is not enough to really make a difference to most Rhode Islanders because incomes haven't risen the way housing prices did in the last eight years," Gorbea said. "We have seen decreases, but there haven't been corresponding increases in income."
In 1999, the median price for a single family home was $126,000 and the median income was $42,090. In 2007, the home price had shot up to $275,000, but income had risen only to $53,568.
"The gap is still very wide," Gorbea noted. "Housing is still unaffordable to many families, either as rental or home ownership."
And while the price of a house has dipped, she said, "everything else has gone up."
With the escalating price of gasoline, the cost of commuting to work increased 55 percent between 2000 and 2007, she said. The price of food has gone up 10 percent in the past year and home heating fuel skyrocketed 64 percent from July 2007 to July 2008.
With all those demands on the household budget, and fairly flat wages, the average family still struggles to keep a roof over their heads, she said.
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