March 1, 2011; Source: The Providence Journal | Housing Works Rhode Island has released a startling report (PDF) that shows that one out of every ten mortgaged homes in Rhode Island is in foreclosure or serious delinquency. This places the smallest state in the nation among the top ten states most affected by the mortgage crisis.
The report also details the ripple effects, showing that every foreclosure not only decreases that property’s value by 27 percent but also decreases the value of the properties around them. This has resulted in a situation where one in five homes in Rhode Island is underwater in its value to mortgage ratio.
The report goes on to detail the losses in tax revenues and the extra costs in public services to foreclosed and abandoned properties. The report concludes, “If Rhode Island is to build a strong and diversified economy, our policymakers must invest in strategies that will ensure a long-term supply of affordable homes, like Building Homes Rhode Island and the Neighborhood Opportunities Program . . . Without consistent investments in the development of affordable homes, Rhode Island remains vulnerable to instabilities in the housing market and ensuing problems such as the foreclosure crisis.”—Ruth McCambridge