Metro, News

Student luxury housing developers to save $19 million over 20 years

City Council green lights Edge College Hill II, agreement draws community criticism

Senior Staff Writer
Friday, October 12, 2018

On Oct. 4, the Providence City Council approved the use of a tax stabilization agreement for the construction of a new “mixed-use” apartment complex, Edge College Hill II. This agreement will save developers Steeple Street RI, LLC $19 million in taxes over the next 20 years, said Jacqlyn Blatteis ’19, co-director of the student group Housing Opportunities for People Everywhere. The complex, located on Canal Street, will be next to student housing complex Edge College Hill and is advertised as “luxury student apartments,” according to the developers’ website. The building will include 163 studio and one-bedroom apartments, while the first floor will be dedicated to commercial use, according to the Providence Journal.

Ben Smith, deputy director of communications for Mayor Jorge Elorza, noted several benefits of the new development and accompanying tax agreement in an email to The Herald. He wrote that tax stabilization agreements are a tool that the city uses to incentivize new development by phasing in taxes “over a number of years, rather than all at once.” Even with the tax agreement, Edge College Hill II is a tax-paying development, and the complex concentrates student housing in high-density zones, which may “alleviate some of the issues associated with students living in lower-density residential areas,” Smith wrote. The city has seen strong growth in student-oriented housing development, “indicating a high demand,” he added.

The development and tax agreement have prompted backlash from members of the Providence community. Direct Action for Rights and Equality, a local advocacy group,  wrote a letter Oct. 4 to the Providence City Council voicing opposition to the tax agreement. The letter urged the City Council to return the proposed tax stabilization agreement to the finance committee for further review. Though the letter was signed by a sitting city councilor, two councilors-elect, the local carpenters union and community advocates and organizers, the Council ultimately approved the tax agreement.

Malchus Mills, vice-chairperson of DARE, has been vocal about the lack of affordable housing in Providence and the city’s inability to address this problem. “Not only here in Rhode Island, but nationally, there is a housing crisis,” Mills said. “We just don’t have enough houses here in Rhode Island, … and we haven’t been building affordable houses for a while,” he added.

According to Mills, with tax stabilization agreements, developers are supposed to pay into a fund to assist low-income residents in the city, but they have failed to do so. “The city is just giving away money because they do not push these large developers to do something for the low-income folks,” he said.

“More than 40 percent of Rhode Islanders are housing cost-burdened, meaning that they spend over 30 percent of their income on housing,” Blatteis said. The approval of the tax agreement for Edge College Hill developers “is really indicative of the city’s priorities.” Instead of investing in solutions to help solve the state’s housing crisis, the city is choosing to prioritize “increasing access to luxury student housing,” she added.

Katherine Kerwin, who was recently elected to the Providence City Council in Ward 12, signed DARE’s letter. College Hill, which will host the new complex, does not fit the profile of a neighborhood requiring tax stabilization agreements, Kerwin said.

Tax stabilization agreements are intended to boost economic development; however, the city is using them “not as tools for economic development in communities where we need to be boosting the economy,” but rather to attract “and appease developers in communities that frankly do not need the economic development,” she said. Kerwin said that these tax agreements basically allow developers to evade taxes, “even though our schools are falling apart, our streets need repairing and there are so many basic city-level services that we need to be attending to.”

Brown and the Rhode Island School of Design also play a role in the growth of these expensive developments, as many of the luxury apartments are geared toward their students. “Brown is one of the gentrifiers that has been happening to Providence,” Mills said. In neighborhoods like Fox Point, housing that caters to Brown students is increasingly unaffordable for people who used to live there, he added.

Blatteis also emphasized the impact of the University on the Providence community. She noted that while “as students we might benefit individually from increased off-campus housing options, it’s really important to acknowledge that ultimately student housing displaces permanent Rhode Island residents.”

Blatteis urged the University to try to expand off-campus housing options in a way that is transparent with the community as well as “mindful and intentional.” She also hoped students would “not only think about this stuff and be conscious of it,” but also “look for ways to hold Brown accountable,” she said.

Blatteis and Mills urge action from the city as well. “The change has to be in the way these (tax stabilization agreements) are enforced. … They’re not adhering to the rules. If the City Council stays the same, I’m afraid it’s always going to be business as usual: The big developers get the tax breaks and the people that are homeless are in poverty,” Mills said.

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