How Newport Heights Exemplifies Successful Affordable Housing Redevelopment - Secretary Deborah Goddard, Rhode Island Executive Office of Housing + Eva Erlich, Vice President of Development at Trinity Financial

GUESTS:

Secretary Deborah Goddard, Rhode Island Executive Office of Housing

Eva Erlich, Vice President of Development at Trinity Financial

This episode dives into a real-world case of rebuilding community and creating sustainable affordable housing—focusing on Newport Heights. With insights from housing experts, we explore how innovative financing, strategic preservation, and thoughtful design can transform public housing and inspire broader change.

Key Topics:

• The history and success of Newport Heights as a Hope Six redevelopment project
• How refinancing tools like RAD enable long-term sustainability
• The twin importance of preservation and new development in meeting housing needs
• Challenges and strategies for aging public housing infrastructure
• The role of partnerships among government, private sector, and community stakeholders
• The broader housing supply problem and solutions through production and preservation

Timestamps:

00:00 - Introduction and overview of the conversation
00:35 - Background on Newport Heights’ transformation from Tonomy Hill Public Housing
01:24 - The significance of Hope Six and RAD in housing redevelopment
02:13 - The impact of good design and refinancing on longevity
03:38 - Trinity’s role and financial approach in housing projects
04:36 - Resident involvement and community connection post-renovation
05:13 - Balancing reinvestment in existing infrastructure versus new projects
05:57 - The importance of preservation amidst funding challenges
07:09 - Addressing aging properties and renovation strategies
08:03 - Cost considerations and long-term affordability
09:24 - Early planning and proactive refinancing efforts
10:12 - The frequency of preservation discussions across Rhode Island
11:29 - Ongoing projects and Trinity’s portfolio strategies
12:30 - Broader outlook on Rhode Island’s housing market and supply issues
13:39 - The necessity of balancing preservation with new housing production
14:55 - Final thoughts on using successful projects as a blueprint for change

Transcript

Bill Bartholomew 0:00

Today, we're going to talk about something that actually works and a model that is actually something to take a look at and go, okay, how can we how can we expand uh these kinds of ideas? So before we get uh going any further, we'll we'll associate the the human being with a voice. And um, either one of you, I guess Eva, if you want to start, introduce yourself and give us some background.

SPEAKER_03 0:21

Sure. Thanks. Uh my name is Eva Ehrlich. I am with um a real estate development firm called Trinity Financial. Uh we do work in the New England area and New York area focused on public housing, affordable housing, mixed income housing, um, and commercial real estate.

SPEAKER_01 0:42

And secretary. Hi, I'm Deborah Goddard, Secretary of Housing for the state of Rhode Island.

SPEAKER_02 0:47

Um, happy to join the conversation.

Bill Bartholomew 0:50

All right. So there's there's so many different ways to view the lens of housing right now. And we try to do it uh in different ways uh beyond even what is normally discussed. Um you can talk about modular, you can talk about you know rezoning. There's a million different ways to look at things. And we don't spend enough time looking at some of the things that are already started and that are already initiated and already work. And I got a press release that caught my attention uh that pertained to Newport Heights. And I'll read from that press release here, just I think it's the best description for anybody who's not familiar. Originally redeveloped through the Federal Hope Six program, Newport Heights transformed the former Tonomy Hill public housing development into a nationally recognized mixed-income community that improved neighborhood safety, expanded housing opportunities, and helped reconnect residents to the broader Newport community. Today, Newport Heights includes 299 apartments and remains one of Rhode Island's most significant affordable housing redevelopment success stories. There was an event over the last weekend uh that celebrated more than 150 residents gathered for what was described as a summer kickoff community event at Newport Heights. That's what brought this to our attention. So, Secretary, what what is it that makes Newport Heights a success in the affordable housing conversation?

SPEAKER_02 2:09

So let me go back a little bit. I can be a policy nerd, Bill. Um we we say it's a Hope Six development. Um that was a major effort on behalf of Hutt's part to preserve and revitalize public housing and move it to a platform where it could access private capital dollars. Uh public housing developments are really held captive. They can't lend or borrow against their property. Um, and we know the federal government has uh backed away from funding what's necessary to keep these units up. So the Hope Six program and now what we call RAD helps to move those developments to a financing platform where they can access debt, which uh Newport Heights did. And as with any other housing, it can now refinance over time when it needs to. Again, something that wasn't available to PUP is not available to public housing under the standard uh funding platform. So and Newport Heights was fairly early on nationally. Um, and so it's really an example of a the overwhelmingly uh transform overwhelming transformation you can make when you have really good design, really good construction, and then how you can expand its longevity uh by accessing refinancing options.

Bill Bartholomew 3:34

So and so, Eva, from Trinity standpoint, the financial vehicle here is sort of the X factor that makes that design that also opportunity that just that that was allowed by combination of factors, including just the marketplace itself presenting an opportunity for this. But from Trinity standpoint, how does this work? What what what's the differentiation um on a project like Newport Heights?

SPEAKER_03 4:02

So I think the opportunity when it was originally redeveloped into Newport Heights, you know, 20 plus years ago, the opportunity to um sort of revision what it could be and create a mixed income community and look at the street network and look at you know the built environment has really allowed it to become a new community and a new a new place. Um and you know, we have residents who lived there when it was Tonomy Hill, who came back um after it was redeveloped, who are still there today. And it it really is, um, as Deborah said, I mean, just a great example of sort of um what that program enabled to allow for kind of a revisioning of what public housing used to be and create a new um a new vision that is is more connected and more and more integrated and mixed income just to allow kind of a socioeconomic diversity aspect as well.

Bill Bartholomew 5:09

So this example raises the question, Secretary, of balancing reinvestment in existing infrastructure, maybe versus or in tandem with new development, but when development of new projects or honestly physical geography and municipalities like Johnston getting in the way is the which frankly, you know, that that in and of itself, uh you wonder if a project like the redevelopment project in some of these municipalities that have sort of said, well, we're good on affordable housing. You wonder if this strategy even works there. But the broader point is how do you balance this as secretary now looking at redevelopment opportunities against new development opportunities?

SPEAKER_02 5:52

Aaron Powell I like the way you offered the phrase in tandem. I always say uh preservation is the twin of production because we can't step back by losing housing as we're trying to move forward. And preservation has suffered in comparison in terms of, I think, available uh funding. And so under the financing round last fall, we created a set aside out of the bond funds, the 2024 bond funds, uh, for preservation. Wasn't a huge pot, but we did explicitly promote preservation. And through their own funds, Rhode Island Housing matched it. Um and so uh the preservation was able to uh score well enough to get funding. It does have a tough time competing on its own against production because of the um what has been the past priority for production. Still obviously hugely important, but we can't take a step back um and lose what we've got.

Bill Bartholomew 6:51

And from the standpoint of putting new units online versus uh keeping existing units in play, so to speak, as some of the early 2000s, late 90s, early 2000s, even approaching the end of the aughts development, start to deteriorate. Um, this is a question for both of you. How does how do each of you view that opportunity or problem to solve of facing buildings that are going to require potentially significant or properties that are gonna require potentially significant renovation when assessing your best options to get more housing for more people? I guess we'll start with Secretary Yoddard on that.

SPEAKER_02 9:54

Sure. I'll take um from the from the big picture. Um generally, if the owner is responsible, such as Trinity, we are seeing a request for refi before we get to the point where we've got significant systems failure, so on and so forth. So I think the cost here, Eva can correct me. Construction's about 120, 130 a unit. Our subsidy is 40k a unit. So that's a very um uh inexpensive and uh very worthy investment. We have some that are that are, we actually have some that cost a little bit more because they hadn't been able to refi over time. Um, the other thing we get here is um I think uh Newport Heights was their original affordability restrictions were gonna expire in about seven years. Now we've got 30, 30 years on that. Um so that's that's really invaluable when we're we're have such an uphill battle on housing.

Bill Bartholomew 10:48

Right. A similar for uh question in Lane, Eva.

SPEAKER_03 10:52

Yeah, sure. So, you know, I think for us, we are really lucky to have um partners in the housing authority for the city of Newport and great long-term partners with Rhode Island Housing and the state on this property. And we started looking at what was needed at Newport Heights several years ago and began those discussions, as the secretary mentioned, before you know any sort of catastrophe or major issue um has arisen, which is which is we all hope for, right? Um, and and that kind of advanced planning has allowed us to look at what our options were and what our what paths we could pursue for bringing resources to the table, um, public and private and refinancing to allow us to create a strategy that will put this property sort of in a in a position to continue serving high-quality housing and affordable and mixed-in-come housing, you know, for future generations. So just starting those conversations early with the partners and uh getting on the same page of the strategy.

Bill Bartholomew 12:05

Secretary, are these conversations happening throughout the state and different municipalities in terms of preservation uh or or renovation? Um, how frequent is this on your agenda in terms of assessing new projects? And then we'll ask the the same question to some of the other projects you may be working on, Eva.

SPEAKER_02 12:25

So um let me make sure I have the question. How often are we discussing preservation as we go across the stage?

Bill Bartholomew 12:30

Exactly, in tandem with, you know, because you get the press releases that are what you do, I I get the press releases that say there's a ribbon cutting here or there's this event here, or whatever, but the governor's schedule includes such and such housing event. It's not going to say there was a discussion on X preservation project in West Warwick. So I'm curious how much this is a part of the strategy you work on in real time.

SPEAKER_02 12:55

Um in a variety of ways, Bill. So with particular reference for public housing, for instance, we've met, we did outreach to the um trade organization, the public housing authority um group of Rhode Island to talk about the funding we have available. Um we can't step in and full fill the breach that the federal government has left, but we can talk about what we do have. Um so we've been active with Fari. I've I have a public housing background, so um it's near and dear to my heart. Um and then developers come into us as well with with other thoughts and ideas. And, you know, as Eva said early on, we are willing to have conversations about what looks okay, what's the cost, what do we really think we can squeeze in? Um, but I always use the ribbon cuttings on the preservations as to make this point built that we got it, we have to do both. We have to do both.

Bill Bartholomew 13:47

Yeah. Eva, any projects you're currently engaged in outside of Newport Heights?

SPEAKER_03 13:53

Yeah, and uh so we've been doing this. Trinity's been doing this for you know nearly 40 years. So we have a whole portfolio of these sort of early Hope Six deals, um, early low-income housing tax credit deals that are reaching this point or have reached this point. And so this is something that we're looking at across our portfolio. And um on public housing projects such as the Newport Heights one, HUD has made some tools available, um, including RAD, um, which is a great tool to be able to um approach uh kind of modernization of these assets and reinvestment. Um but yes, we are we are looking at this across our portfolio, and we are um, you know, assessing what the needs are at properties as, you know, kind of on an individual basis.

Bill Bartholomew 14:48

Lastly, here, look, it's anecdotal, but there's a sentiment in Rhode Island that it is becoming more and more or less and less uh of a moment of optimism. I think that I can speak for a lot of people that just feel kind of caught between generations or caught between ebbs and flows. And so this conversation of housing, it it is we we always have to talk about it's workforce housing, it's capital A affordable housing, it's lowercase A affordable housing, it's luxury housing, it's senior housing. All of this is a if if the system is working in tandem, then people will downsize their houses and those houses will become available to young families, et cetera, et cetera. So this is a full spectrum conversation. This is just one part of it. But in terms of getting the wheels turning, Secretary, if we did more preservation, would that get the wheels turning on the entire machine here that might make the marketplace, quite frankly, feel more accessible to more people?

SPEAKER_01 15:55

Um we have a supply problem bottom line.

SPEAKER_02 16:01

So while I absolutely can't step back and make that supply problem worse, we absolutely have to produce net new housing, or the preservation won't uh provide the value that it can. Um and so and I will say that and to your point, we need it across the spectrum. I try not to say affordable housing, I say affordable too, um, to help people understand, humanize it, make sure they understand it's their neighbor, it's their child, it's their friend, it's their friend's friend. Um but we will we do intend to continue um a preservation set aside to give it a fair footing, but we will not take our our gas, our foot off the gas middle in terms of production. We can't. We have a basic supply and demand-ish problem here. Yeah.

Bill Bartholomew 16:49

I mean, that is the bottom line. It is as unfortunate. Anybody who's out trying to buy a home in the last, I don't know, several years, including now in this moment where it's shifted a little bit. Um, it never mind rental. It's just it's a wild time. So the more we can produce in all different spaces, the more we can preserve, the better we are. Thank you both for your work. Newport Heights, a success. It's great to talk about something good. Instead of moaning and groaning about you know, whatever doom and gloom, this worked. It worked, it's good. This is part of the solution. And thank you both for being here today.

SPEAKER_03 17:22

Thank you for having us. Yeah, thank you.