You asked the right question, but didn't get to the full answer. Why did housing prices rise so much in RI over the past few years? Falling interest rates had something to do with it, as did constrained supply. But the real story is on the demand side. While incomes in RI stagnated, they rose elsewhere, like New York and Boston. People in the former found second house prices in RI quite cheap relative to their rising incomes. And people in Boston found Rhode Island's lower housing prices attractive relative to other locations with equivalent commuting time to Boston. So we had increased demand from people with rising incomes confronting constrained supply and falling interest rates. Voila: a housing price boom, and a "crisis" for people whose incomes didn't keep up with those of other people who participate in the RI housing market. On the other hand, a lot of the people screaming "crisis" have probably done quite well thanks to RI's extremely generous social welfare programs, and/or its extremely generous public sector wage/benefit packages. Or they just may not understand the connection between whom they elect to the General Assembly, the policies that are enacted, the resulting impact on the RI economy, and their ability to compete for local housing against people who earn their income elsewhere.

But don't let that stand in the way of this taxpayer financed giveaway to the poverty crowd and the building trades unions...

Thanks for taking it a bit further John. I agree with what you said and probably should have fleshed out the out-of-state real estate buyers angle a bit more. As for the rest, truth be told, I've banged that drum so much that I'd hoped it was obvious. Thanks.

Yes, over-taxation may have contributed somewhat to the problem of affordable housing.

But as to the larger question. This is basically a market condition. Demand has driven up real estate values in RI. And I do not feel it is the taxpayers' responsibility to attempt to compensate for this.

If it were done "right"; i.e., supplying affordable housing for everyone who qualified, the tab would be astronomical - simply not feasible. And when you do less, you must choose between who does and who does not get to take advantage of a limited supply of affordable housing, while still adding yet another burden to the sixth highest taxed citizens in the country.

I know this makes me cold. But in my opinion, taxpayers do not have an obligation to supply affordable housing.

Down my way (Aquidneck Island) it's begun to look like we're the northern tip of Long Island. On my four-way intersection my wife and I are the only people that live and work here - the other three houses are second homes (2 NY, 1 CT). And yes, they've driven prices through the stratosphere, because on a relative basis our realty looks cheap.

Interestingly, one of those "second" homes is owned by a retired NY cop / teacher, and another by a couple that are (not yet retired) Hartford teachers. Still think that we who labor in the private sector aren't the Serfs funding a better lifestyle for our publlic-sector Lords?

It should not be a taxpayer responsibility to fund "affordable housing."

After all, where in the RI or US Constitution does it say it should be? And since they don't, under what authority is government meddling in this arena?

Also, as a practical matter, look at the mess that WWII-era "rent control" - still in effect - has made of "affordable housing" in NYC!

I bought my 2 bedroom home in 2001 for $60k. It was assessed at $68k. The first revaluation brought the assessed value to $128k. The second revaluation (2005)brought the assessed value to $210k.

John - are you asserting that demand is in control of revaluation? I was under the, perhaps mistaken, impression that the revaluation process was a calculation that updated house value based on # bedrooms, improvements, lot size, etc.

Revaluation is always a tricky subject. However, assuming you made no major improvements to your house that would have affected its valuation, then what factors drove the increase you described? Broadly, there are four. (1) Changes in the supply of similar homes. In RI, supply is constrained by geography and regulation. As the housingworksri people never cease to point out, our rate of new home starts has been among the lowest in the country. However, no change in supply would not have mattered to valuations but for three other factors. (2) Falling interest rates. This means that at the same level of income, buyers could afford larger mortgages, which led them to bid up prices in a supply constrained market. (3) Rising net demand. There were two trends at work here. First, the outflow of people from Rhode Island, as rising property taxes drove retirees from their homes, and local employers left RI, and weren't replaced. Second, the inflow of people who were either buying second homes in RI, or coming here because houses in RI were in some way more attractive than other houses with similar commuting time to Massachusetts or Connecticut (e.g., Pfizer in New London). On balance, the inflow was greater than the outflow, leading to upward pressure on prices. And (4) rising earnings on the part of many people who were looking for houses in RI. These people worked in economies that were much healthier than Rhode Island's (e.g., Massachusetts) and experienced rising real incomes from their jobs. That enabled them to pay more for houses than could people already living in RI and working in jobs where wages were not rising.

In sum, the increase you saw in the value of your home was due to four factors: constrained supply, falling interest rates, rising demand and rising incomes among house buyers.

Hope that clarifies matters.

I think the state has some obligation and self-interest to help promote affordable housing but would like to know more about this bond issue for housing: in light of past scandals at RISDIC and RI Housing where insiders got the good deals, are there safeguards that this time the money will be spent honestly and effectively? Can we have some assurance the hosuing will be built in "grow-smart" areas where there already is infrastructure? Are there efforts by the state to find ways NOT to lose existing housing (as for Parking lots for Miriam Hospital or badly planned airport expansion)?