M. JODI RELL – ‘Substantial funding’

A campaign to find alternative policies to help more Connecticut residents afford housing, and a $10 million allocation to the state’s Housing Trust Fund, are among the latest efforts by affordable housing advocates to address the state’s housing shortage. A study released late last month by HOMEConnecticut, the group working on policy alternatives, showed that families earning the median income in 157 of the state’s 169 municipalities cannot qualify for a mortgage to buy a median-priced home in that town.

Last week, Gov. M. Jodi Rell announced an additional $10 million allocated to the Housing Trust Fund. The money was expected to be approved when the State Bond Commission meets today.

The Housing Trust Fund for Economic Growth and Opportunity provides gap financing in the form of loans and grants to help create housing for low- and moderate-income working families in the state. It was signed into law last July.

“The Housing Trust Fund was a big step,” said David Fink, policy and communications director for the Hartford-based Partnership for Strong Communities. “Gov. Rell and the Legislature really did something good there.”

Thirty other states have housing trust funds, Fink said. “[Connecticut’s] was a long time coming,” he noted.

The $100 million trust fund is administered through the Department of Economic and Community Development and funded through state General Obligation bonds, which provide a maximum of $20 million per year for five years to create additional housing. The authorization of $10 million in bond funding will fulfill the state’s financial commitment to the program for 2006. The State Bond Commission approved an initial $10 million on Dec. 9, 2005.

“The disbursement of this substantial funding over the next five years will go a long way to addressing the issue of housing affordability statewide and will directly benefit Connecticut’s long-term economic success,” Rell said in a prepared statement.

The funding from the trust fund can be used for acquisition of property, rehabilitation, new construction, down payment assistance loans and grants. Nonprofit and for-profit housing developers, municipalities, local housing authorities, the Connecticut Housing Finance Authority, community development finance institutions and community development corporations are among the eligible recipients.

“Flexible and affordable housing is a critical issue for Connecticut workers, families and businesses – and a top priority of my administration,” Rell said in a prepared statement. “Housing development and ownership helps to drive our economy by fostering worker and community stability. Everyone deserves quality-built, safe and secure housing, and that’s exactly what the new Housing Trust Fund was created to do.”

‘A Critical Problem’

Funding will be based on priority guidelines established by DECD’s Housing Trust Fund Advisory Committee and may not exceed $75,000 per housing unit or $2 million per project and $3 million per program. DECD is accepting proposals for activities to carry out the administration of programs for the Housing Trust Fund and for specific projects.

“[The Housing Trust Fund] will leverage private money out there,” Fink said. “But it’s only one thing.”

The state needs to do more to encourage the development of affordable housing, he said, but there are some other initiatives under way. Rell has set up a working group to study the issue, and that will issue a report at the end of the year.

Fink said he hopes the HOMEConnecticut group, which kicked off last month, will come up with innovative ideas to help the affordable housing crisis.

Connecticut State University Chancellor Emeritus and former Secretary of the Office of Policy Management William Cibes is chairing the campaign. He kicked it off saying that “a critical problem now threatens the future of Connecticut.” The campaign is intended to “bring the skyrocketing cost of housing back within reach of all state residents.”

“Our economy, our families and our quality of life are all threatened by the lack of rentals, starter homes and other housing opportunities for our children, our young professionals, our working families and our aging population,” Cibes said in a prepared statement. “We think it’s time to do something about it.

“The number [of towns where a family earning a median income cannot afford the mortgage for a median-priced home] rose from 102 towns in 2004 to 157 towns by 2005,” added Cibes. “That is only the latest evidence that we have trouble on the horizon. Businesses will not come or stay here, and we will fail in our effort to create jobs, if we don’t have housing that workers can afford. They will leave, and they are already leaving.”

Members of the campaign are working on four concepts they hope will help improve the affordable housing situation.

The first is to make sure the Housing Trust Fund is sufficiently financed, and correctly packaged to ensure it can leverage the most private money, Fink said. The second is to get rid of administrative, regulatory and zoning roadblocks to development that exist in some municipalities.

“If it takes 15 months to get a sewer permit … there are some developers who can’t wait that long,” Fink said. “Time is money.”

The third concept is to improve the capacity of towns – especially that of small towns – for planning. Many small municipalities do not have the planning and engineering capacities to create plans for additional housing development. By providing them with tool kits or planning software, those towns can be helped, Fink said.

The fourth concept is to convince the state to provide incentives to towns, such as money for education, when new housing is built.

“A lot of towns know they need the housing,” Fink said.

The campaign is being guided by a 42-member steering committee of bankers, business executives, economists, educators, planners, housing experts and other specialists from all regions of the state. The vice chairmen are John Rathgeber, president of the Connecticut Business and Industry Association; Andrea Pereira, program director of the Local Initiatives Support Corp.; and Luis Caban, executive director of the Southside Institutions Neighborhood Alliance.