Rhode Island hit with 'perfect storm' of housing problems

Rents climb as foreclosures hit multifamily buildings

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Nov. 28, 2011

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Looking over the data from this past summer, Leonard Lardaro, professor of economics at the University of Rhode Island, shakes in wonderment. "The last summer month that we have data for, we had just 53 building permits for the whole state. That's been typical in recent months. On an annualized basis, we are looking at between 600 and 700 permits a year. That's incredible."

Could things get any worse for Rhode Island? The answer is yes, because the state's unemployment numbers have been awful. Recently, Rhode Island was the fifth-worst state for unemployment with a rate of 10.8 percent, which is at least better than in 2009, when the state was No. 1 for unemployment with a rate close to 13 percent.

Although Rhode Island is a major location for defense contractors, a large percentage of jobs are service-related.

"Our employment peaked in December 2006," Lardaro said. "That's what happens when you don't have technology or other growth-oriented industries. We didn't have the insulation that a Massachusetts or Connecticut had, where the growth industries propelled the economy longer going into the recession. We went into recession well before the other states."

For the short term, Lardaro is not optimistic. "To some extent, the lack of new-home construction will help the healing, but it doesn't generate the construction employment and multipliers that thrive when you are in recovery."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.

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