AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RESIDENTIAL REUSE INCENTIVE ACT (Creates a state program and fund to finance adaptive reuse and mixed-use housing projects, requires affordable units and labor standards, and provides oversight to expand housing until 2035.)

H8142

2026 -- H 8142
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LC005308
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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 STATE AFFAIRS AND GOVERNMENT -- RESIDENTIAL REUSE
INCENTIVE ACT

Introduced By:
Representatives Speakman, Diaz, Giraldo, and Cruz

Date Introduced:
February 27, 2026

Referred To:
House Municipal Government & Housing
It is enacted by the General Assembly as follows:
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SECTION 1. Findings
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The general assembly finds and declares:
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(1) Rhode Island is experiencing a shortage of homes for sale or rent that has created rising
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housing costs for citizens of the state, including for workers in essential fields such as teaching and
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nursing. It is in the interest of the state to attract and retain a skilled workforce.
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(2) Cities and towns have experienced increased commercial vacancy rates and a series of
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nursing home closures in the wake of the COVID-19 pandemic. Additionally, the 2025 Vacant
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Schools Annual Report published by the executive office of housing indicates that there were at
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least ten (10) vacant or underused school buildings located around the state as of December 31,
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2025, some of which may be feasibly redeveloped for residential use.
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(3) Through the establishment of a residential reuse incentive program, Rhode Island can
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encourage the adaptive reuse of vacant office buildings, former schools, former nursing homes, and
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other underutilized structures as housing; create high-quality job opportunities in the residential
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construction industry; and leverage external co-investment funding from union pension funds.
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(4) It is also in the interest of the state to leverage the housing land bank program newly
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established at the Rhode Island housing and mortgage finance corporation pursuant to § 42-55.2-1
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in order to redevelop underutilized land for housing.
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SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:
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CHAPTER 64.35
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RESIDENTIAL REUSE INCENTIVE ACT
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42-64.35-1. Short title.

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This chapter shall be known and may be cited as the “Residential Reuse Incentive Act.”
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42-64.35-2. Definitions.

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For purposes of this chapter:
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(1) “Adaptive reuse” means the conversion of an existing structure from the use for which
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it was constructed to a new use by maintaining elements of the structure and adapting the elements
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to a new use.
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(2) “Affordable housing” means “affordable housing” as defined by § 42-128-8.1.
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(3) “Applicant” means a developer, owner, or tenant, or both, applying for a residential
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reuse incentive under this chapter.
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(4) “Construction worker” means any laborer, mechanic, or machine operator employed
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by a contractor or subcontractor in connection with the construction, alteration, repair, demolition,
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reconstruction, or other improvements to real property.
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(5) “Corporation” means the Rhode Island housing and mortgage finance corporation
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established pursuant to chapter 55 of title 42.
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(6) “Developer” means a person, firm, business, partnership, association, political
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subdivision, or other entity that proposes to divide, divides, or causes to be divided real property
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into a subdivision or proposes to build or builds a building or buildings or otherwise improves land
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or existing structures, which division, building, or improvement qualifies for benefits under this
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chapter.
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(7) “Development” means the improvement of land through the carrying out of building,
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engineering, or other operations in, on, over, or under land, or the making of any material change
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in the use of any buildings or land for the purposes of accommodating land uses.
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(8) “Hard construction costs” means the direct contractor costs for labor, material,
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equipment, and services associated with an approved project, contractor’s overhead and profit, and
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other direct construction costs.
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(9) “Health or education worker” means an individual who is employed on a full-time or
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part-time basis in the field of education or healthcare by a public or private employer located within
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the State of Rhode Island including, but not limited to, employment as a teacher, instructional staff
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member, school support staff member, nurse, or medical technician.
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(10) “Housing land bank” means the housing land bank program established at the

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corporation pursuant to § 42-55.2-1.
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(11) “HUD” means the United States Department of Housing and Urban Development.
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(12) “Mixed use” means a development comprising both commercial and residential
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components.
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(13) “Project” means qualified residential reuse project defined in subsection (15) of this
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section.
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(14) “Project financing gap” means the part of the total project cost that remains to be
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financed after all other sources of capital have been accounted for to include, but not be limited to,
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developer-contributed capital, which shall be defined through rules and regulations promulgated
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by the corporation.
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(15) “Qualified residential reuse project” means a specific construction project or
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improvement, including lands, buildings, improvements, real and personal property or any interest
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therein, including lands under water, riparian rights, space rights and air rights, acquired, owned,
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leased, developed or redeveloped, constructed, reconstructed, rehabilitated or improved,
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undertaken by a developer, owner or tenant, or both, within a specific geographic area, meeting the
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requirements of this chapter, as set forth in an application made to the corporation.
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(16) “Residential” means a development of residential dwelling units.
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42-64.35-3. Establishment of program – Uses – Eligibility.

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(a) The residential reuse incentive program is hereby established as a program under the
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jurisdiction and administration of the corporation. The program may provide low-interest loans,
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subordinate debt, equity investments, or competitive program grants consisting of support to
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qualified residential reuse projects meeting the requirements of this chapter. On an annual basis,
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the corporation shall confer with the executive office of housing and the department of
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administration regarding the availability of funds for the program.
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(b) To be eligible as a qualified residential reuse project, an applicant’s chief executive
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officer or equivalent officer shall demonstrate to the corporation that:
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(1) There is a project financing gap that, after taking into account all available private and
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public funding sources, the project is not likely to be accomplished by private enterprise without
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receiving support under this chapter; and
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(2) The project fulfills the state’s policy objectives and priorities as set forth in section (d)
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of this section.
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(c) In awarding support under this chapter, the corporation shall give priority to:
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(1) A project that shall utilize a real estate asset held by the housing land bank; or
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(2) A project for which the applicant demonstrates a partnership with and between an

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employer or association of employers of health or education workers in need of housing, and a
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labor union or association of labor unions representing the health or education workers, to provide
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health or education workers with rental or homeownership opportunities.
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(d) Qualified residential reuse projects shall conform to the following standards and
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requirements:
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(1) The project shall be multi-family residential or mixed-use development.
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(2) For adaptive reuse, the structure to be repurposed consists of at least fifteen thousand
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square feet (15,000 ft2) in gross floor area.
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(3) At least twenty percent (20%) of the dwelling units offered for rent or for sale shall be
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affordable housing, as defined in § 42-128-8.1, or, in the case of dwelling units for rent, at least ten
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percent (10%) of the dwelling units in the project shall be housing for which the rent, heat, and
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utilities other than telephone constitute no more than thirty percent (30%) of gross annual
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household income for a household with fifty percent (50%) or less of area median income, adjusted
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for family size, all as determined and certified by an approved monitoring agent pursuant to § 45-
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53-3.2.
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(4) Where the budget for the hard construction costs of a project is in excess of twenty-five
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million dollars ($25,000,000), all construction workers on that project providing services in
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connection with the project shall be paid in accordance with the wages and benefits required
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pursuant to chapter 13 of title 37 (“ labor and payment of debts by contractors”) and all contractors
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and subcontractors shall file certified payrolls on a monthly basis for all work completed in the
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preceding month on a uniform form prescribed by the director of labor and training.
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(5) Where the budget for the hard construction costs of a project is in excess ten million
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dollars ($10,000,000), the applicant shall ensure that one hundred percent (100%) of the hours
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worked on the project shall be performed by all trade construction contractors and subcontractors
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who have or are affiliated with an apprenticeship program as defined in 29 C.F.R. § 29 et seq., for
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the craft employed. Additionally, the applicant shall ensure that all bidding documents for the work
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to be performed on the project includes express and conspicuous language evidencing the
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requirement found in this subsection. As part of its contract with the construction manager and/or
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general contractor, the applicant shall require that not less than ten percent (10%) of the total hours
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worked by the contractors’ and subcontractors' employees on the project are completed by
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apprentices registered in the aforementioned apprenticeship programs.
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(6) The applicant shall demonstrate senior debt co-investment from a union pension fund
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or co-mingled fund of union pension fund investments with a track record of successful investment
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in both new construction and substantial rehabilitation of affordable housing.

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(7) The applicant shall ensure that any contractor and/or subcontractors on this project
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shall:
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(i) Have all valid and effective registrations and/or licenses required to carry out their
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construction contracts.
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(ii) Ensure that all craft labor employed on the project have completed at least an OSHA
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ten (10) hour training course for safety established by the U.S. Department of Labor, Occupational
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Safety & Health Administration.
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(iii) Comply with all state, federal and local laws including, but not limited to, providing
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workers’ compensation insurance, prompt payment of wages and benefits, and proper classification
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of workers and employees as employees as opposed to independent contractors.
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(A) Any person that does not have a current registration with the State of Rhode Island
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contractors’ registration and licensing board and a properly filed notice of designation as an
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independent contractor pursuant to § 28-29-17.1 shall be presumed to be an employee.
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(B) A person shall only be considered an independent contractor if, when the person is
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performing work at the site the person is free from direct control and direction in connection with
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completing the person's scope of work, both pursuant to the person's contract, if applicable, and in
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the actual performance of the work.
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(iv) Not hire and/or utilize any contractor or subcontractor that has:
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(A) Been debarred or suspended by any federal, state or local government agency or
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authority in the past three (3) years;
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(B) Had any type of business, contracting or trade license, registration, or other certification
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revoked or suspended in the past three (3) years; or
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(C) Been found in violation of any tax laws, prompt payment laws, wage and hour laws,
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prevailing wage laws, environmental laws or others, where the result of the violation was the
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payment of a fine, back pay damages or any other type of penalty in the amount of one thousand
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dollars ($1,000) or more within the last five (5) years.
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42-64.35-4. Establishment of the fund -- Composition.

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(a) There is hereby established at the corporation a restricted account known as the
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residential reuse incentive fund (the “fund”) in which all amounts appropriated for the program
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created under this chapter and any returns on investments from the fund shall be deposited. The
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fund shall be exempt from attachment, levy, or any other process at law or in equity and the
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corporation may pay, reserve, and/or pledge money from the fund to provide competitive program
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grants or loan or equity investments in qualified residential reuse projects.
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(b) The fund shall consist of:

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(1) Money appropriated in the state budget to the fund;
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(2) Money made available to the fund through federal programs or private contributions;
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(3) Repayments of principal and interest from loans made from the fund;
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(4) Proceeds from the sale, disposition, lease, or rental of collateral related to financial
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assistance provided under this chapter;
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(5) Application or other fees paid to the fund to process requests for financial assistance;
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(6) Recovery made by the corporation on the sale of an appreciated asset in which the
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corporation has acquired an interest under this chapter; and
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(7) Any other money made available to the fund.
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42-64.35-5. Applications -- Powers of corporation -- Reports.

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(a) An applicant seeking support as provided in § 42-64.35-3 shall submit a request to the
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corporation pursuant to an application procedure prescribed by the corporation.
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(b) Any approval for funding under this chapter shall only be granted by the corporation
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and shall require the concurrence of the secretary of housing.
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(c) The corporation may set the terms and conditions for support provided pursuant to the
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provisions of this chapter. Subject to the provisions as provided in subsection (b) of this section,
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any decision to grant or deny support lies within the sole discretion of the corporation.
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(d) The corporation shall publish a report on the fund at the end of each fiscal year. The
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report shall contain information on the commitment, disbursement, and use of funds allocated under
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the fund. The report shall also, to the extent practicable, track the economic impact of projects that
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have been completed using the fund. The report is due no later than sixty (60) days after the end of
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the fiscal year and shall be provided to the speaker of the house of representatives, the president of
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the senate, and the secretary of housing.
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42-64.35-6. Implementation guidelines, directives, criteria, rules, regulations.

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The corporation shall adopt implementation guidelines, directives, criteria, rules, and
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regulations pursuant to chapter 35 of this title ("administrative procedures") as are necessary for
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the implementation of the corporation’s responsibilities under this chapter and impose such fees
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and charges as are necessary to pay for the administration and implementation of this program.
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Rules and regulations shall permit projects receiving support under this chapter to:
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(1) Apply for and receive support from any other local, state, or federal program; and
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(2) Receive investment through federally-insured or credit-enhanced mortgage financing,
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mortgage-backed securities, taxable bond financing, and other financing structures.
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42-64.35-7. Program integrity.

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Program integrity being of paramount importance, the corporation shall establish

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procedures to ensure ongoing compliance with the terms and conditions of the program established
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herein, including procedures to safeguard the expenditure of public funds and to ensure that the
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funds further the objectives of the program.
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42-64.35-8. Sunset.

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(a) The provisions of this chapter shall sunset and expire on December 31, 2035.
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(b) No funding, credits, or incentives shall be authorized or authorized to be reserved
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pursuant to this chapter after December 31, 2035.
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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 STATE AFFAIRS AND GOVERNMENT -- RESIDENTIAL REUSE
INCENTIVE ACT
***
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This act would create a state program to provide loans, grants, or investments to convert
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existing buildings into multi-family or mixed-use housing, including adaptive reuse projects. It
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requires a share of units to be affordable and sets labor, wage, and apprenticeship standards for
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larger projects. It also establishes a dedicated fund, oversight, and reporting, and sunsets the
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program after 2035.
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This act would take effect upon passage.
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