RI 2026 S2681: Towns and Cities - Housing - State-Funded Rental Subsidy Program

Plain-English Summary

This bill creates a state-funded rental subsidy program designed to help low-income individuals and families who are homeless or at risk of becoming homeless. It allocates $25 million from the state's general fund to pay for this program starting in July 2026. The money will primarily be used to pay property owners directly to reserve housing units for eligible tenants. Under this program, tenants will not have to pay more than 30% of their income toward rent. The program will be managed by the Rhode Island Executive Office of Housing.

For younger readers

This new law helps people who do not have a lot of money or who might not have a home at all. The state is setting aside a large amount of money to help pay rent for these families. Under this rule, families would only have to pay a small part of the money they earn for their apartment, and the state would pay the rest. This helps make sure that people who are struggling can have a safe place to live that they can afford.

Who & Where It Applies

Impacted groups

Homeless individualsLow-income householdsProperty developersLandlordsTaxpayers

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

$16.05

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Directly addresses the homelessness crisis by providing guaranteed housing subsidies for the most vulnerable populations, including those with disabilities and extremely low incomes.
Ensures housing affordability by capping the tenant's portion of the rent at 30% of their income, preventing housing cost burdens that often lead to eviction.
Fills gaps left by federal funding limitations, creating a state-level safety net that prioritizes housing stability over market-rate profit motives.
Heavily favors "project-based" assistance over tenant-based vouchers, which limits the freedom of low-income tenants to choose which neighborhoods they want to live in.
The $25 million allocation is a one-time appropriation rather than a recurring revenue stream, raising concerns about the long-term sustainability of the subsidies for tenants.
While it attempts to lower barriers, the reliance on private developers and owners to reserve units may still result in "creaming," where landlords select the "easiest" tenants among the homeless population.

For Conservatives

Directs funds to private property owners and developers through guaranteed rental payments, ensuring that businesses are compensated for housing high-risk tenants.
Aims to reduce the visible presence of homelessness in communities, potentially improving public order and quality of life in towns and cities.
Reduces reliance on expensive emergency services and shelters by placing individuals in stable housing, which can be a more fiscally responsible approach to homelessness in the long run.
Increases government spending by $25 million, placing a significant burden on taxpayers to subsidize housing for a specific group of people.
Expands the welfare state by creating a new government bureaucracy within the Executive Office of Housing to manage rental markets.
Interferes with the free housing market by subsidizing rents and potentially distorting price signals for development and rental rates.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 67 additions

SECTION 1. Legislative Findings and Purpose.

(a) The General Assembly finds as follows:

(1) The lack of genuinely affordable rental housing for extremely low, very low, and low- income households remains a primary driver of homelessness in Rhode Island;

(2) Federal Continuum of Care (CoC) funded housing programs often serve individuals and families with the highest barriers to housing stability, yet available rental assistance is insufficient to ensure long-term affordability and stability;

(3) Many households exiting homelessness require a rental subsidy that is tied to their household income, rather than typical area median income (AMI) thresholds associated with development financing; and

(4) The creation of a state-funded rental subsidy program that provides project-based rental assistance aligned to tenants' income will help reduce reliance on emergency shelters, improve housing stability, and maximize the effectiveness of federal homeless assistance resources.

(b) The purpose of chapter 71 of title 45 is to establish a state-funded rental subsidy program, including a dedicated allocation for project-based rental assistance to support eligible households experiencing homelessness or at risk of homelessness.

SECTION 2. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby amended by adding thereto the following chapter: 45-71-1. Definitions. As used in this chapter:

(1) "Administering agency" means the State of Rhode Island executive office of housing.

(2) "AMI" means area median income as determined by the U.S. Department of Housing and Urban Development (HUD), adjusted for family size.

(3) "Continuum of care (CoC)" means the federally designated continuum of care for the State of Rhode Island.

(4) "Eligible household" means an individual or household experiencing homelessness or is at risk of homelessness as defined by HUD who:

(i) Is extremely low-income, very low-income, or low-income according to current HUD income limits; or

(ii) Has a long-term disability and needs community-based supportive services.

(iii) Priority for assistance under this program shall be given to households referred through the Rhode Island continuum of care for permanent housing projects and to households identified pursuant to the state's Olmstead Plan.

(5) "Income" means gross annual income including, but not limited to; wages, salaries, tips, bonuses, public assistance, retirement, disability benefits, unemployment compensation, and interest income.

(6) "Project-based rental assistance" means a housing subsidy attached to a specific unit, where assistance continues for the household occupying that unit.

(7) "National standards for physical inspection of real estate (NSPIRE)" means standards established by the U.S. Department of Housing and Urban Development, which set uniform health, safety, and habitability requirements for federally assisted housing inspections administered by HUD. 45-71-2. State rental subsidy program established and capitalized.

(a) There is hereby established a state-funded rental subsidy program administered by the executive office of housing, to provide project-based rental assistance to permanent housing projects with units reserved for eligible households as defined in this chapter.

(b) The program is hereby capitalized with twenty-five million dollars ($25,000,000) appropriated from the general fund for fiscal year beginning July 1, 2026.

(1) Funds appropriated pursuant to this section shall be deposited into a restricted account administered by the executive office of housing and shall remain available until expended for the purposes of this chapter.

(2) Capitalized funds may be committed on a multi-year basis to provide project-based rental assistance to owners or developers serving eligible households.

(c) The administering agency shall adopt rules consistent with this chapter and existing program guidelines, including rent determination, income certification and housing quality standards.

(d) The administering agency as defined in § 45-71-1 shall make every reasonable attempt to implement the program so that households who face the greatest barriers to accessing housing are not excluded from participating due to screening criteria such as tenant selection plans. 45-71-3. Eligible use of funds.

(a) Funds capitalized under this chapter shall be used to provide project-based rental assistance payments to owners or developers of permanent housing projects that agree to reserve assisted units for eligible households.

(b) The administering agency as defined in § 45-71-1 may enter into agreements with property owners and/or housing developers to provide project-based rental assistance consistent with this chapter.

(1) Ensure that the tenant portion of rent does not exceed thirty percent (30%) of gross household income, less applicable utility allowances;

(2) Be tied to the income of the assisted household and shall not be conditioned on area median income limits applicable to the housing development; and

(3) Be layered with any other federal funding or housing resources when applicable.

(d) If deemed necessary by the administering agency, up to ten percent (10%) of available funds under this chapter may be used to provide tenant-based rental assistance for populations that face the greatest barriers to accessing housing and may not be served by project-based rental assistance. 45-71-4. Rent and payment standards.

(a) Rent for units assisted under this chapter shall be established at the greater of:

(1) The rent necessary to ensure tenant payment does not exceed thirty percent (30%) of gross household income, less utility allowances; or

(2) Any applicable minimum rent requirement established under program guidelines.

(b) Units assisted shall meet NSPIRE standards. 45-71-5. Nondiscrimination and fair housing. The administering agency as defined in § 45-71-1 shall ensure compliance with all federal and state nondiscrimination laws, including fair housing protections related to source of income.

SECTION 3. This act shall take effect upon passage.