State to revive incentive-based affordable housing program

With the need for affordable housing on the rise, along with rental prices and family homelessness, the state Office of Policy and Management plans to reinvigorate a program that provides incentives for municipalities to create low-cost residential units.

Dimple Desai, OPM’s community development director, said the agency is in the beginning stages of revitalizing the HOMEConnecticut Program with about $1 million left in remaining funds from 2008.

Created by the General Assembly in 2007, HOMEConnecticut took affect in April 2008, and served as a voluntary, incentive-based land use program for municipalities looking to build more low-to-moderate income housing. The General Assembly originally allocated $4 million for HOMEConnecticut, and the program began as housing prices peaked during the first half of 2007.

“People weren’t able to afford housing in Connecticut and towns were recognizing that they needed to be proactive,” said David Fink, policy and communications director for the Partnership for Strong Communities.

The state handed out $2 million in planning grants of up to $50,000 each to interested municipalities in April 2008, only to watch the housing market bottom out five months later. The state needed to cut spending and former Gov. M. Jodi Rell rescinded about $1 million from HOMEConnecticut.

“When Rell rescinded the money, the signal to the municipalities was, ‘What happened to this?'” Fink said. “I think [Gov. Dannel P.]Malloy has recognized that the program is very flexible.”

Fink said OPM began to reconsider HOMEConnecticut when Malloy took office in early 2011. Desai said five municipalities already received approval for grants, including Old Saybrook, Sharon, Torrington, East Lyme and New London. Simsbury, Oxford, Windham, Branford and Berlin have shown interest in the program, as well.

Old Saybrook First Selectman Michael Pace said the $50,000 grant is being used to try to preserve the population of youth and young professionals in Old Saybrook.

“The housing prices were starting to drive young people out,” he said. “I thought we needed to take a look and see what we could do to preserve housing that we thought was attainable.”

Towns like Old Saybrook that choose to create more affordable housing through HOMEConnecticut can create an Incentive Housing Zone by meeting two requirements. Twenty percent of the units in the zone must be affordable for those at 80% of the area median income, and the housing must meet density requirements of six single-family, 10 townhouses or duplexes, or 20 multifamily units per acre.

Towns can then qualify for planning grant and incentives of up to $2,000 for each unit allowed to be built in an IHZ, and up to $2,000 for every multifamily unit building permit issued or up to $5,000 for every single-family building permit issued. Towns may use the incentive money for any purpose.

Pace said the town is using the funds to promote construction of Ferry Crossing, a 5.6 acre development of 16  rental units for those with low to moderate incomes. Construction for the development broke ground in May. He said the development will help fill Old Saybrook’s lack of affordable housing, which he discovered drove many families to live in motels.

“Now I think the state is using us as a model,” he said.

Fink said HOMEConnecticut serves as a step toward meeting new economic and demographic needs in a changing market after the burst of the housing bubble. He said banks will make smaller loans and people will need to provide bigger down payments on property, pushing the housing market in a new direction.

“Both demographically and economically the market is demanding more, dense, smaller units,” he said. “Builders are building smaller so it’s easier to afford the down payment, heating cost and transportation costs. That’s what the market is demanding now and that’s why a program like HOMEConnecticut is attractive.”

The program remains in its beginning stages, however. Harry Smith of the Office of Planning and Development in New London said the city adopted an IHZ totaling 73 acres in different areas of the city, but no plans for construction exist yet.

“I think it’s just a function of the market here,” he said. “Nothing’s been proposed over the last few months.”

Demand for affordable housing remains high in some of Connecticut’s poorest cities, as well. Hartford’s Housing Authority reported at least a year-long wait or more for any of their Low Income Public Housing programs that serve the elderly, disabled and families.

Tim Regan, supervisor of the Intake Department for New Haven’s Housing Authority, said about 5,000 people are waiting for all Low Income Housing Programs in the city. He said elderly and disabled people wait about 2 to 3 years and some families have been waiting since 2007.