Why It Matters
Providence, Rhode Island, faces a shortage of affordable housing that city officials say is displacing working-class families and seniors. A proposed tax restructuring aims to remove financial barriers that currently discourage developers from building low-income units in the state’s capital.
What Happened
Providence City Council President Rachel Miller and Deputy Majority Leader Mary Kay Harris announced the Providence BUILD Act during a press event Wednesday outside an affordable housing development on Broad Street. The ordinance would establish a new tax stabilization structure for eligible affordable housing projects.
Harris said the legislation responds to input from developers and community members about obstacles in the current system. The council leaders were joined by affordable housing developers and community partners at the announcement.
Current Tax Structure
Rhode Island’s “8 Law” currently governs how municipalities tax low-income housing. Under this provision, property taxes are assessed at a rate equal to 8% of a property’s gross scheduled rental income, creating a special rate distinct from standard residential taxation.
City officials indicated this existing framework has proven insufficient to encourage the level of affordable housing development Providence needs. The BUILD Act would modify or supplement this structure, though specific details of the new tax stabilization mechanism were not provided in the announcement.
Zoom Out
Housing affordability has become a central policy challenge across New England’s urban centers. Cities from Boston to Hartford have implemented various tax incentives, zoning reforms, and financing mechanisms to boost affordable housing stock. Providence’s approach joins a broader regional trend of municipalities using tax policy to address housing shortages.
State lawmakers in Rhode Island and neighboring states have debated whether local tax breaks provide sufficient incentive or whether additional state-level funding and regulatory changes are needed to meet demand.
What’s Next
The Providence BUILD Act will require approval by the full City Council. The measure will go through committee review and public hearings before any final vote. If passed, the ordinance would take effect following mayoral signature, establishing the new tax framework for future affordable housing developments in Providence.