Public development and ownership involve cases where local or state agencies invest significantly in exchange for a substantial, active stake in the development and operations of housing. Agencies act as real estate developers or engage closely with development partners and serve as long-term owners of the housing or the land it’s built on. Models of public development are attracting renewed attention as a way to produce durably affordable housing. 

In consultation with the Rhode Island Department of Housing and the Rhode Island Housing and Mortgage Finance Corporation (“RIHousing”), we conducted a scan of such models in the U.S. and abroad, and of the financing and regulatory tools they use. We also studied how Rhode Island could apply these approaches and what key considerations it should take into account. The study team produced an interim and final report and briefed Rhode Island Governor Daniel McKee and a member of the state legislature on our findings.

The report identifies three types of public development models in the United States. Mixed-income housing models, like the widely publicized program pioneered by Montgomery County, Maryland, typically use revolving loan funds to replace private equity in the construction financing for large, mixed-income developments, and in turn, secure a public stake in these projects. Other jurisdictions, like Boston and Hawaii, have pursued public housing conversions, redeveloping and expanding existing public housing using federal and other subsidies. The report also highlights long-running programs for developing new affordable housing without market-rate units using creative funding models, focusing on Idaho and Dakota County, Minnesota.

The study also explores models from Vienna, Helsinki, Copenhagen, Singapore, and Hong Kong. These models vary greatly due to different political and economic contexts but offer valuable lessons on cost-based rents, the use of public land, and the role of nonprofits in housing development.