Developers get guidance for Affordable housing program
New guidance for one of Connecticut’s leading programs for creating affordable housing aims to give developments in underserved communities a better chance at receiving funding.
The state’s Housing Finance Authority recently released updated guidelines — called a qualified allocation plan — for its $10 million lowincome housing tax credit program. The guidelines now include a preapplication process, updated distinctions between preservation and construction projects and new sustainability measures for projects.
The changes aim to make the process for funding affordable housing projects in Connecticut easier in a state facing a dearth of housing that people with low incomes can afford.
Connecticut has a shortage of just over 86,700 units that are affordable for “extremely low income” renters. Sixty-four percent of those tenants are severely cost burdened by their rent, according to the National Low Income Housing Coalition.
Housing is typically considered affordable if people are paying up to a third of their income toward housing costs.
“The goal … was primarily to address the disparities that we've seen as we were trying to encourage growth of low-income housing development in the suburbs and in communities that are not often served,” said Terry Nash Giovannucci, community engagement manager at the Connecticut Housing Finance Authority.
The program is the U.S. Department of Housing and Urban Development’s “most important resource for creating affordable housing in the
United States today,” according to its website.
It has an annual budget of about $8 billion in tax credits for states and localities to build, acquire or rehabilitate rental housing for people with low incomes.
Connecticut has two types of low income housing tax credits — a 9 percent credit and a 4 percent credit. To qualify, applicants must meet certain criteria for providing affordable housing.
Officials explained Connecticut’s updated application process and new methods of awarding funds to housing developers, advocates and others at the Connecticut Affordable Housing Conference on Wednesday.
The three-day conference was organized by the Partnership for Strong Communities. The finance authority’s new process was developed through a series of roundtable meetings and public feedback from developers.
When developers previously applied, the consideration for areas was binary. The state finance authority would consider whether the town for the proposed project was above or below the state average in its opportunity score, said Jonathan Cabral, a manager of research, marketing and outreach at the authority.
That score was based on several factors including school performance, poverty level, employment data and the proximity to a community college, Cabral said.
A new opportunity map, which the agency shares with the state’s Department of Housing scores, examines additional factors including median income, job growth, crime rates and homeownership. It divides each census tract into quintiles from very high opportunity to very low opportunity, Cabral said.
The new map serves as a better tool to identify pockets of poverty in the state, Cabral added.
“It is more aligned with, let’s say neighborhood data,” he said of the new map.
The new process also includes a new category for preservation projects so those projects won’t compete against new construction anymore, said Nash Giovannucci.
About a quarter of projects will be preservation of existing multi-family housing while 75 percent will be construction, Nash Giovannucci said.
The point system by which applications were evaluated has also been altered, notably in the sustainability categories, said Seema Malani, another multi-family manager at the authority.
Projects will be evaluated according to energy conservation, green building, use of renewable resources and sustainable development with digital literacy, among other categories, Malani said.
For the first time, applicants can also submit preliminary applications and have a meeting with housing finance authority staff before the final applications are due. Preliminary applications for this round of funding are due Friday, said Debbie Alter, a multi-family manager at the finance authority.
In addition to making the process easier, the changes aim to better support the state’s policy goals, she said.
“These things are always in place and very important to us,” Nash Giovannucci said. “Rental affordability and special needs housing or supportive housing … family-focused housing.”