2026 -- S 2681

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LC005596

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO TOWNS AND CITIES -- HOUSING -- STATE-FUNDED RENTAL SUBSIDY

PROGRAM

     Introduced By: Senator Melissa A. Murray

     Date Introduced: February 27, 2026

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Legislative Findings and Purpose.

     (a) The General Assembly finds as follows:

     (1) The lack of genuinely affordable rental housing for extremely low, very low, and low-

income households remains a primary driver of homelessness in Rhode Island;

     (2) Federal Continuum of Care (CoC) funded housing programs often serve individuals

and families with the highest barriers to housing stability, yet available rental assistance is

insufficient to ensure long-term affordability and stability;

     (3) Many households exiting homelessness require a rental subsidy that is tied to their

household income, rather than typical area median income (AMI) thresholds associated with

development financing; and

     (4) The creation of a state-funded rental subsidy program that provides project-based rental

assistance aligned to tenants' income will help reduce reliance on emergency shelters, improve

housing stability, and maximize the effectiveness of federal homeless assistance resources.

     (b) The purpose of chapter 71 of title 45 is to establish a state-funded rental subsidy

program, including a dedicated allocation for project-based rental assistance to support eligible

households experiencing homelessness or at risk of homelessness.

     SECTION 2. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

amended by adding thereto the following chapter:

CHAPTER 71

STATE-FUNDED RENTAL SUBSIDY PROGRAM

     45-71-1. Definitions.

     As used in this chapter:

     (1) "Administering agency" means the State of Rhode Island executive office of housing.

     (2) "AMI" means area median income as determined by the U.S. Department of Housing

and Urban Development (HUD), adjusted for family size.

     (3) "Continuum of care (CoC)" means the federally designated continuum of care for the

State of Rhode Island.

     (4) "Eligible household" means an individual or household experiencing homelessness or

is at risk of homelessness as defined by HUD who:

     (i) Is extremely low-income, very low-income, or low-income according to current HUD

income limits; or

     (ii) Has a long-term disability and needs community-based supportive services.

     (iii) Priority for assistance under this program shall be given to households referred through

the Rhode Island continuum of care for permanent housing projects and to households identified

pursuant to the state's Olmstead Plan.

     (5) "Income" means gross annual income including, but not limited to; wages, salaries, tips,

bonuses, public assistance, retirement, disability benefits, unemployment compensation, and

interest income.

     (6) "Project-based rental assistance" means a housing subsidy attached to a specific unit,

where assistance continues for the household occupying that unit.

     (7) "National standards for physical inspection of real estate (NSPIRE)" means standards

established by the U.S. Department of Housing and Urban Development, which set uniform health,

safety, and habitability requirements for federally assisted housing inspections administered by

HUD.

     45-71-2. State rental subsidy program established and capitalized.

     (a) There is hereby established a state-funded rental subsidy program administered by the

executive office of housing, to provide project-based rental assistance to permanent housing

projects with units reserved for eligible households as defined in this chapter.

     (b) The program is hereby capitalized with twenty-five million dollars ($25,000,000)

appropriated from the general fund for fiscal year beginning July 1, 2026.

     (1) Funds appropriated pursuant to this section shall be deposited into a restricted account

administered by the executive office of housing and shall remain available until expended for the

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purposes of this chapter.

     (2) Capitalized funds may be committed on a multi-year basis to provide project-based

rental assistance to owners or developers serving eligible households.

     (c) The administering agency shall adopt rules consistent with this chapter and existing

program guidelines, including rent determination, income certification and housing quality

standards.

     (d) The administering agency as defined in § 45-71-1 shall make every reasonable attempt

to implement the program so that households who face the greatest barriers to accessing housing

are not excluded from participating due to screening criteria such as tenant selection plans.

     45-71-3. Eligible use of funds.

     (a) Funds capitalized under this chapter shall be used to provide project-based rental

assistance payments to owners or developers of permanent housing projects that agree to reserve

assisted units for eligible households.

     (b) The administering agency as defined in § 45-71-1 may enter into agreements with

property owners and/or housing developers to provide project-based rental assistance consistent

with this chapter.

     (c) Assistance provided pursuant to the provisions of this chapter shall:

     (1) Ensure that the tenant portion of rent does not exceed thirty percent (30%) of gross

household income, less applicable utility allowances;

     (2) Be tied to the income of the assisted household and shall not be conditioned on area

median income limits applicable to the housing development; and

     (3) Be layered with any other federal funding or housing resources when applicable.

     (d) If deemed necessary by the administering agency, up to ten percent (10%) of available

funds under this chapter may be used to provide tenant-based rental assistance for populations that

face the greatest barriers to accessing housing and may not be served by project-based rental

assistance.

     45-71-4. Rent and payment standards.

     (a) Rent for units assisted under this chapter shall be established at the greater of:

     (1) The rent necessary to ensure tenant payment does not exceed thirty percent (30%) of

gross household income, less utility allowances; or

     (2) Any applicable minimum rent requirement established under program guidelines.

     (b) Units assisted shall meet NSPIRE standards.

     45-71-5. Nondiscrimination and fair housing.

     The administering agency as defined in § 45-71-1 shall ensure compliance with all federal

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and state nondiscrimination laws, including fair housing protections related to source of income.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- HOUSING -- STATE-FUNDED RENTAL SUBSIDY

PROGRAM

***

     This act would establish the state-funded rental subsidy program. The act would authorize

an initial capitalization of twenty-five million dollars ($25,000,000), to create the program to help

Rhode Islanders with the lowest incomes exit homelessness and stay stably housed. This act would

also authorize the appropriation from the state general fund beginning July 1, 2026.

     This act would take effect upon passage.

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