- [Narrator] Someone gave, someone donated, someone left a legacy.

Generations of generous someones have helped shape Rhode Island into this amazing place we call home.

How do you thank them?

By leaving your own legacy.

We can help.

(jazz music) - Welcome to another addition of "In Another Opinion," a public information program where our discussions are focused on the communities of color in the state of Rhode Island.

I'm your host, Peter Wells.

My guest today is Carrie Zaslow, Executive Director of the Providence Revolving Fund.

Welcome, Carrie.

- Thank you.

Thank you so much for having me.

I'm so delighted to be here.

- Oh, we're just glad to have you.

It's been a long time since you and I have sat and chatted anyway.

- That is true.

- It's a little different environment than what I remember, but it's cool.

(laughs) Carrie, tell me something about the fund.

First of all, what is the Revolving Fund?

- Sure, so the Providence Revolving Fund, we are a community development financial institution, which means we are certified by the US Treasury to be a nonprofit lender.

So we raise funds and we use those funds to make loans in a variety of different ways into communities that are often underinvested.

- Okay.

So these are like direct loans?

People would wanna come to you and say, I wanna buy this house?

- We don't do mortgages 'cause we don't have long term funds.

What we do is we actually, we have three different loan pools.

- [Peter] Oh, okay.

- So we have, our first loan pool is what we call our neighborhood fund.

And that fund is a direct to homeowner loan fund.

So what we do is we make home repair loans to homeowners that live in homes that are over 50 years old, and those home repair loans are a little different than your standard home repair loan.

Because what we do, first and foremost, is we have a construction management team.

That team goes out and does a full cost estimate of the work that needs to get done on the whole exterior of the home.

We prioritize it, starting with health and safety, code violations if we see any, whether you've received a notice or not.

And then obviously onto things more like, do you wanna change the color of the paint?

And then we sit down with the potential borrower, and we actually work backwards.

We figure out what they can afford to borrow.

So we show them what their payment might be for different levels of loan, and we make sure that they're comfortable with the payment.

And from there, we scope out a whole scope of work.

All of the funds stay in escrow with the Revolving Fund, and the construction manager stays with the project from start to finish.

So the borrower never has to worry about a contractor coming to them and asking for more money or worrying about whether it's time to make a payment.

We take care of all of that with the homeowner.

We do complete specs and make sure that they're comfortable with the contractors that they choose.

So that is one of our funds.

The other fund, and this one is a more recent fund where we were able to raise $10 million from a variety of philanthropic local bank support and Rhode Island Housing to be able to put together a $10 million fund that we are using for mixed use, mixed income development.

We are prioritizing affordable housing and making sure that we're looking at what housing is affordable to people from the very, very low income all the way up to sort of what is the middle income or the median income.

Making sure that there's always going to be units available for people at a variety of different income levels.

And then finally, our third fund was created during COVID, and it really was a response to what we were seeing in the neighborhoods that we work in, which is a micro-business loan fund.

That fund offers loans from 500 to $5,000 to micro-businesses.

Really all they need to do is tell us what they wanna do with the money.

And part of that really came from, we noticed that a lot of the businesses that we were seeing along Broad Street in Olneyville Square, on Cranston Street, they weren't able to take advantage of some of the COVID relief funds.

They didn't get payroll protection program.

They weren't able to get some of the other funds, and we knew that keeping them open and having them be able to reopen was critical.

So we put together this fund with our own money.

Ultimately, the Providence City Council matched that fund, and so we were able to put together a little fund going into it knowing we may lose all of it, and we just knew it had to get done.

As it has turned out, we haven't lost anything.

- Very good, very good.

Can you give the viewers an idea of how many of these kinds of projects are ongoing?

- Sure.

So with our neighborhood loan fund, generally, we have a portfolio right now of about 50 loans.

They're all in a variety of different stage.

Some are new and the construction's ongoing.

Some we've just started and closed recently, but the work will start in the spring.

And some are just finishing themselves up where they're at their sort of, generally, our loans run about eight years, so they're probably in year six or seven right now.

The commercial and mixed income affordable housing projects, those projects, that's a new fund, so it's only been in operation for about 18 months.

We currently have three projects that are closed.

Two that I think are closing this week, and a pipeline of another about seven million in projects that we're not sure exactly when they'll come to fruition.

- Wow, so it is very active.

Let me ask you, the name Providence Revolving Fund, is it restricted to Providence?

- It is not.

That really does come from our history.

And just to go back a little bit, we're a 40 year old organization that was originally started really as a reflection and a response to the historic issues of red lining that occurred in the historic neighborhoods of Providence.

So the historic district in Elmwood, there's two of them.

The area that now is sort of the west end, Armory Broadway Historic District.

Those areas 40 years ago, people who were living there were not able to get access to money to fix their homes.

And part of that was the homes were undervalued so significantly because of history.

And so, the Revolving Fund started really as a way of being able to have funding go into those neighborhoods.

However, over 40 years we've expanded.

So initially we started with really just looking sort of at the areas right outside of the historic districts, finally looking at citywide in Providence, and now actually with our construction loan program, as I spoke, that program is statewide.

We have two projects that are pending in Woonsocket.

We have one that we are part of the financial stack for in Tiverton.

And several in Providence too.

- So it is statewide.

- Absolutely.

- That's important.

Let me ask you this.

Let's say a person was looking at purchasing a home.

Can they parlay the Revolving Fund program, let's say for some repairs and maybe lead removal or something of that nature that has to be done in order for that mortgage to take place.

Have you had any of those kinds of things?

- We have not had that come to us since I've been there, I've been there for about three and a half years, but I wouldn't say no.

I mean, one of the things that I think is so exciting about working in such an atmosphere where we're small, we're nimble is we get to customize our loans.

So really, people come to us, whether it's developers, landlords, homeowners who own single family homes, multifamily homes, they come to us, we're really able to sit down with them and make a loan that works for them.

Not necessarily saying to them, here are the loans we have, you figure out which one you fit in to.

We can customize what we do.

And that's really how we are able to be assistive in all of these different programs.

- [Peter] Now the term revolving-- - Yes.

- I'm assuming that the money that is paid back it is just churned back into the program.

- Correct, yep.

- Okay.

- Yes.

So again, our largest fund right now is fairly new, so we haven't been able to see how that will revolve, but looking historically at some of our other funds, we've been able to see about two to three revolutions in about a 10 year period.

So we're able to really get money in and out, and when we're able to, because while we charge, I think, a very standard interest rate where we're able to bring money in, that money also then gets put back into the fund.

So the fund grows.

- Now, the interest rate, since you mentioned it, is that connected at all like FHA or VA to the federal loan window?

- It not, per se.

I mean, a lot of it has to do with, the way that we have been able to raise money has largely been through lending, of borrowing money ourselves at a very low rate.

Obviously, we need to make sure that we are able to continue to operate and that the loans are running, but we try to keep that at the lowest amount possible.

- Very good.

Now, how do you decide on projects?

Is there like a committee that consider around?

- Yes, as a matter of fact.

Well, I would say, first and foremost, I mean, obviously, many people come to us.

Once we've done an underwriting, which our underwriting came out of a committee, which I'll tell you about in a second, we then go to our loan committee.

Our loan committee is made up of a combination of some of our board members as well as members of the community.

It is really important to us that it is not necessarily the staff that's making these decisions alone.

Obviously, we do a lot of the homework to make sure we have the facts to give the loan committee, but it's really important that the loan committee is really driving where we are making loans and how we're making loans.

And I will tell you, you know, we at the staff level get asked questions all the time, you know?

Well, if we do this, what does that say?

What does this mean?

How are we looking at this?

And it's really important for us to make sure that we're able to answer those questions properly.

- So how about, now let me ask you this 'cause this is important.

What about the diversity of the organization in terms of the board, the staff, and this committee?

Which is really important.

- Sure, right.

So on the board level, when I came in three and a half years ago, I think we were, the board was about 20% BIPOC, and right now we are at 48%.

And you know, that is obviously, we think it's incredibly important, so we are quite happy with where we are right now and we'll continue to make sure that we're filling board seats with people from the communities we serve and stakeholders in those communities.

Our loan committee currently is about 80% either BIPOC or female, or many of them both.

And the staff, we have our two most recent hires are both people of color.

They both are Spanish speaking.

And, you know, we always look for that as we are doing our hiring practices.

- Okay.

And what would you say there's specific area, I imagine the name suggests that probably more projects were done in Providence initially.

- Yes.

- But is there like goals for the organization to do more in, let's say Woonsocket or in Newport, or I don't know if Newport would even qualify.

- Well, surprisingly, some of Newport would.

Newport's actually one of those areas where I think people always think about the tourist parts of Newport, but there are a lot of people who live in Newport and many of them either would be suited to have more affordable housing or who are already in need of that.

I don't think we are specifically looking at numbers or sort of where we're, we're really looking at projects that come to us that really hit our priorities.

And so, our number one priority are projects that include affordable housing.

We are also then looking at projects that will include a range of incomes.

So our sweet spot is really sort of that 60% of the a median income household all the way up to about 110% of the area median household.

And we're really interested in finding projects that have units for both.

And then we're also really, obviously, continue as a organization that was built looking at historic preservation to continue to look at projects that have some kind of historic preservation component.

I will say, we look at that somewhat progressively.

So we are involved in a project where housing and other was destroyed.

So the project that's being built there is all new construction, but for us, historic preservation also meant bringing back and preserving what had been a residential neighborhood back to being a residential neighborhood.

- But not necessarily in the style that it was.

- No, not necessarily the style that is was.

- Because that's been a stumbling block for a lot of historic buildings is the requirement to maintain the outside, if I'm correct about this, the same way or the way it was initially built, which means finding craftsmen who can still do some of this work.

- Right, and we do a lot of that work, partly because we do still work and have expertise in working in historic districts.

And in the districts, it's the local district that sets those guidelines as well as, obviously, there is the parks department of the US Department of Interior sets standards as well for historic preservation.

So we are able to provide a lot of guidance in those areas as well.

And there is, we do see a lot of value to keeping our historic architectural integrity.

However, we also are very much aware that we want to make sure things are safe.

So we're very concerned about how we look and deal with lead paint, asbestos, other safety hazards.

We also understand that people don't live the same way anymore.

So when we think about the interior of a project, we wanna make sure that that interior really suits the needs of a family of today.

- Sure.

Especially, I know that one of the things, stumbling blocks for a lot of folks is ADA.

People are walkers and wheelchairs, and that requires some modification to a lot of the older structures.

- Sure, absolutely.

And again, I mean, to me, this is always a piece where we look at how do we do it in such a way that we're being thoughtful?

That doesn't necessarily mean that, you know, we can't make those kind of reasonable accommodations.

In fact, we know we have to.

But we also know that you can sort of rush into something or you can think about it and make an adjustment that suits the homeowner or the resident of that property as well as is able to maintain some of the architectural integrity.

- Let me ask you this.

Well, is there an opportunity for people to work on these projects themselves?

Like Habitat for Humanities or something like that where the neighbor communities actually do some of the work for sweat equity, let's say?

- So, yes.

We don't have a formalized program like Habitat, and because most of the work that we do we are working with someone who is already a homeowner.

However, we always work with them and talk to them about the things they can do themselves, particularly, you know, just as an example, it is not unusual for someone to come to us and we go out and we do the cost estimate, and we come back and to repair everything with a contractor, we would be looking at 75,000 to $85,000 to do the repair.

That's going to be a really heavy lift for that homeowner on top of their mortgage, right?

- [Peter] Mortgage, yeah.

- So looking at that, we were well aware that we are likely not going to get all of that done.

So we start looking at this cost estimate and really evaluating it, and that's where we often will see what possibly could the homeowner do themself?

And then there's a conversation with the homeowner about what they feel comfortable with and how we can help the them to get the skills if they needed to do it.

- Could something like that be staged if it's such a large amount?

- Oh, we do that all the time.

We phase those projects, absolutely.

So we look, and again, we always start with what is health and safety, right?

I mean, what's the most important thing?

And so we look, I mean, often it's roofs when we need to make sure or looking at different kind of gutter work, making sure water is, you know-- - Big problem.

- In these homes is always the thing we wanna look for and make sure that we're keeping the water away from the home because we wanna minimize any further damage that happens as well.

- Now, you mentioned the term affordable housing, and that gets thrown around a lot.

- [Carrie] Yes.

- What's affordable housing?

Is there a number as to what affordable housing is?

Let's just say in Providence, for instance.

- So when we think about affordable housing, I think the thing that's really most important is it really has to do with how much of any individual or household, how much of their income they're paying for their housing.

And this is where I think it's really important to look at that.

So we generally look at a number of about 30% of their income is gonna be spent on housing.

And if they're spending more than that, we consider it to be cost burdened.

And really, why I think it's important to look at that is we live in a state that has a very low occupancy rate.

In particular, Providence has a very, very low occupancy.

Right now our occupancy rate is 3%.

What that means is that there are people who are earning 100% of the area median income, which means they literally earn the middle of the income that are spending more than 30% on their housing.

So is there a need for housing that will be affordable for that household?

Absolutely.

When we look at a lot of the subsidy programs or programs where there's money from the state or from the federal government that's going in to help make the cost of the housing lower, then generally, we're looking at something that's around 80% of the area median income, so less than 100, you know, less than that middle.

But when we look at it on a policy level for our organization, we see that there's a need for affordable housing above that as well.

We see that there are a great number of households that are earning between 90 and 110% of the area median income that are simply extremely house burdened.

So they are really having a hard time.

They don't qualify for a lot of the existing programs.

We are really interested in making sure that there's housing that stays affordable for them, and not just when a building first opens, but for a long time to come.

So we're looking at ways that we're making sure that those units stay affordable at that level for the next 15 to 20 years.

- You know, one of the issues that I think puts a burden on your ability to be as successful as you'd like has to do with homeowners, let's say we have a lot of two and three family housing here.

- [Carrie] Yes.

- In order for a homeowner to be able to get benefit of tax breaks, they have to market those properties at market.

They have to rent at market.

Now, unfortunately, the market's pretty high.

So when we start talking about affordable, I know for instance, I shouldn't be putting this out, but my wife has a property that she rents, and because she rents it to a family member, she doesn't charge market rent, so she loses out on any tax benefits of being a realtor or a landlord.

- Right.

- But if she wanted to be and wanted the tax break, she would have to raise to market rent, which would probably not get that property out of being affordable for a large segment of the community.

- That is one of the issues that we need to look at in terms of the overall way that we look at how housing is built and how we are looking at this whole process.

But I also wanna say that when we look at this, we also want to make sure that for the individual homeowner who owns a two or three family house, that they also have the ability to not only support their own family, but also to be able to participate in wealth creation as well.

And so we think that it's, you know, and part of that is making sure that you are able to charge a rent that is going to help you to be able to cover parts of your mortgage, make sure that you are able to support yourself.

So we see it as, you know, not all housing and not all units should have some sort of a deed restriction or have their rent, you know, below market, but we wanna make sure that there are enough below market rent apartments to make sure that people are able to afford to live.

And ultimately, when we think about it, that only helps our economy further when people have money that they can go out and they can spend when they're not worried about how they're gonna feed their family.

When they can go out and they can take advantage of all the wonderful things we have in our city, in our state, that only helps all of us.

- Yeah, housing is probably second only to either employment or education when it comes to the economic health of a community.

- Sure.

- And the availability of housing, I know that we've been hit pretty hard in Rhode Island by wealthier Bostonians coming in and paying higher prices for rentals, which makes those units not available for somebody else at an affordable rate, and I don't see that changing much.

That's the way of the world, and especially in an area like we have in New England where we're so boxed in.

But I don't know what the answer is, and I don't know if you know what the answer is to that, but I don't know how we can increase housing availability as well as affordability.

- Well, I think we need to produce more units.

I mean, obviously that.

- New units or rehab door units?

- Both.

- Because we don't like to tear things down in Rhode Island.

- And that's okay.

We really don't like to tear things down, but we think that we can really adaptively reuse a lot of what's existing and create new units.

And you know, it is not the sole answer.

I think we can talk about the two other things you brought up because I don't think we ever can look at housing absent of education and absent of employment and what that all means.

However, we know we have an immediate problem.

We don't have enough units.

- Just with units, yeah.

Carrie, we're running close out of time, believe it or not.

It goes by so fast.

We'll just have to have you back in here again.

- [Carrie] I would love that.

- Oh yeah, no, and we would too, because this is an ever changing condition.

I don't have any idea of what COVID may have done of recent, but the bottom line is, it is an issue.

You're addressing it as best you can with the Revolving Fund and other programs, and hopefully in time, in time, that we'll be able to solve some of that problem.

Carrie, listen, this conversation's been rich.

And I want you to know that I love talking about housing.

I'm an old loan officer.

- Yes.

- So it's kind of fun, but we have run out of time, and I'm sorry.

We have to run and actually just take care of things we have to take care of.

- Well, thank you so much for having me.

It was really my pleasure.

- Thank you, Carrie.

Thank you, Carrie Zaslow and you, the viewers, for tuning into another edition of "In Another Opinion."

A special thanks to PBS for making this program possible.

I'm your host, Peter Wells.

Give us your opinion on Facebook at In Another Opinion, and above all, have a great day.

(jazz music) - [Narrator] Someone gave, someone donated, someone left a legacy.

Generations of generous someones have helped shape Rhode Island into this amazing place we call home.

How do you thank them?

By leaving your own legacy.

We can help.