Governor McKee Submits Budget Amendment to Support Housing Stability, Address Homelessness

PROVIDENCE, RI – Governor Dan McKee today submitted an amendment to his FY2025 budget proposal to support housing stability and tackle homelessness in Rhode Island. The amendment also proposes the creation of a permanent funding stream to address these areas in future years.

“My administration is committed to improving the housing outlook for Rhode Islanders – whether they are experiencing housing insecurity, seeking rentals that families can afford or working toward first-time home ownership,” said Governor Dan McKee.

“The Governor’s budget amendment proposes important resources aimed at continuing supports for Rhode Islanders experiencing homelessness,” said Secretary of Housing Stefan Pryor. “We thank Governor McKee for his efforts over many months to identify resources for short-term solutions while also proposing recurring funding sources to support this work for years to come. We look forward to working with the General Assembly, homeless service providers, municipal leaders, and others regarding this proposal.”

The amendment includes the following:

Homelessness Assistance Program: Allocates $16.6 million in one-time State Fiscal Recovery Funds to extend housing navigation, behavioral health, and stabilization services to help address the increase in homelessness in the wake of the COVID-19 pandemic.

Permanent Funding Stream for Housing Stability and Homelessness: Creates a permanent funding stream for housing stability and homelessness by extending the 5 percent hotel tax to the short-term rental of whole homes. This closes a longstanding loophole whereby partial home short-term rentals are currently taxed at a significantly higher rate (13 percent) than whole home short-term rentals (8 percent) without any policy justification for the distinction.

Housing Production and Stabilization Fund Flexibility: Expands the eligible uses of the State’s existing Housing Production Fund to include housing stabilization, housing problem solving, housing subsidies, and homelessness prevention, in addition to housing production.

Working closely with partners across the state, this winter the administration was able to increase seasonal shelter beds 32 percent over the previous year. While federal funding for these efforts was temporarily increased in the wake of the COVID-19 emergency, the fact remains that this one-time federal funding will not be available in the future, further underscoring the need for a permanent funding stream.

As the Governor has indicated, it is important to identify new recurring funding sources that can help address our housing and homelessness challenges over multiple years – to partner with municipalities, non-profits, and advocacy groups to help fund and carry out this work moving forward.