Connecticut is slowly waking up to the depths of its affordable housing problem, panelists at a discussion sponsored by the Connecticut Mortgage Bankers Association said today.

The discussion on the “New Look of Affordable Housing” kicked off with a brief overview of the state of play in Washington provided by U.S. Representative Joe Courtney (D-Conn.). While Courtney warned that partisan gridlock is worse than ever in the capital, one area that might see forward movement this year is tax policy reform, something that could have significant impact on the housing sector. If large-scale tax reform goes forward, federal Low Income Housing Tax Credits could be ripe for the chopping block, Courtney said. Politicians from both sides of the aisle tend to support the credits, but if a bigger reform package includes cuts to the top marginal rate or corporate tax rate, the low-income housing credit and other special purpose programs may be eliminated, Courtney said.

“The question of the day is, ‘Is Washington going to participate in a meaningful way in the issues you’re dealing with here?’ For all of you on the front lines … getting real -life input and feedback is very valuable, and I would encourage you to [contact your representatives],” about the issue, Courtney said.

Potential cuts could have a huge impact on the development of more affordable housing stock. Of the thousands of affordable units built in the past decade, all have relied on the credits as part of their financing, said Darva Kovel, vice president of multifamily housing at the Connecticut Housing Finance Authority.

Losing that federal funding source would be a tough blow in a time when state and local lawmakers are finally becoming more open to building more affordable housing. David Fink, the policy director of the Partnership for Strong Communities, provided an overview of the current state of Connecticut housing, saying that the Nutmeg State’s preponderance of aging single-family homes is holding back its housing market. In 114 of the state’s 169 towns, over 70 percent of the housing stock is single-family homes, Fink pointed out. That’s a problem, since over the past few years the percentage of Connecticut households which are renting has actually increased by 4 percent.

Without more affordable multi-family housing being constructed, Fink suggested, Baby Boomers won’t be able to downsize yet stay in their communities, and many young people won’t be able to save up for single-family homes. That would lead to a stagnant housing market where prices and sales stay sluggish, eventually forcing towns to cut back on needed services as their property tax revenues can’t keep pace. 

“We have to give the market what it wants: smaller, dense, more affordable, energy-efficient, and if possible, close to transit,” said Fink.

Local town officials are beginning to recognize the problem, Fink said. The Partnership is aware of over 30 towns that are currently attempting create more multi-family housing near their train stations, he said. But towns need help.

“The message to towns has to be, ‘If you want to stay the same, you’re going to have to change a little bit,’” he said. “Towns need young people to coach Little League, volunteer for the fire department. But that means that local zoning commissions will have to transform themselves from essential a judicial function — giving developers’ plans the thumbs up or thumbs down — to a policy-making one, proactively evaluating what type of housing the town needs and creating zoning and subsidy packages to attract it.

The state of Connecticut, particularly under the administration of Gov. Dannel Malloy, has moved to proactively address the state’s affordable housing crisis, and Kovel provided an overview of several different initiatives on both the multi- and single-family residential sectors. The CHFA currently has over a billion dollars worth of projects in the pipeline, including $221 million in new multi-family construction. The volume of its single-family mortgage program is up 40 percent, and it’s currently on track to meet its five-year goal of more than doubling the amount of housing it builds.

James Paley, executive director of Neighborhood Housing Services of New Haven; and Elizabeth Torres, executive director, Bridgeport Neighborhood  Trust, also reviewed the efforts of their own agencies working with homeowners and renovating dilapidated housing in tough neighborhoods. The Malloy administration’s new funding programs have been a help, inspiring her group to tackle bigger projects in neighborhoods like east Bridgeport that once seemed daunting. And they’re having some success. But that message needs to get out further, Torres said.

Groups like hers are “Good at talking about what we do, not so much about why we do it,” she said.