A proposed change in how the state distributes federal subsidies for low-income housing could limit investment in some eastern Connecticut towns, Democratic lawmakers warn, and reshape established patterns of development for others, like Stonington and East Lyme.
The Connecticut Housing Finance Authority, which oversees and distributes incentive programs to develop low-income and affordable housing, has proposed changing its “opportunity map” to reflect census tracts rather than municipal-level data to determine eligibility for funding.
Projects in areas with higher opportunity scores – based on factors that include school performance and access to jobs – are more likely to receive tax credits, but the new census-tract format also significantly reduces the land area in the region designated “very high” opportunity, making it difficult overall for the region to compete for funding.
Under the existing map, all of Stonington is given a “very high” opportunity score. But under the census-tract level map, the farthest west of the four census tracts in Stonington – which includes Mystic – is marked as “high opportunity,” while two others to the east are “moderate” opportunity, and the tract including Pawcatuck is “low” opportunity.
That new designation may upset a pattern of constructing Stonington’s affordable housing in Pawcatuck, and in East Lyme would limit “high opportunity” projects to the northern portion of the town. Currently, all of East Lyme is considered “very high opportunity.”
Stonington First Selectman Danielle Chesebrough said she’s concerned that the census-tract level map unnecessarily divides Stonington and will make it more difficult for a planned 82-unit mixed-income development at the site of the former Campbell Grain building in Pawcatuck to secure the credits needed to develop the project.
“We’ve worked really hard to make sure there’s equity across our community. We’ve worked hard to make sure our two elementary schools are like mirror images of each other in terms of curriculum and capital improvements in the buildings,” Chesebrough said. “We have one middle school and one high school, and we see ourselves as one town. And to have certain pockets of the town picked out as high or low opportunity puts the whole town at a disadvantage.”
A number of Democratic state senators from eastern Connecticut asked the housing authority to look more closely at the impact it could have on towns in eastern Connecticut affected by the proposed map changes.
“We just said we need time to look at this, because it kind of took us by surprise,” State Sen. Cathy Osten, D-Sprague, told CT Examiner. “We’re asking for due diligence here.”
Projects in both East Lyme and Stonington have been successful under the previous maps in obtaining financing from the 9 percent federal Low Income Housing Tax Credit program, which finances up to 9 percent of a project. A previous development in Pawcatuck – Spruce Ridge Meadows – received $1.12 million in 2015 to build 86 low-income units.
The 9 percent program is particularly competitive. In 2020, there were 16 applications for more than $23 million in credits, but only $8.8 million of funding was distributed to seven projects building 321 low-income units. Since 2015, 39 projects have received about $51.4 million in credits to build over 2,000 low-income units.
In eastern Connecticut since 2015, about $6.4 million in credits have helped finance six projects to build a total of 329 units in Waterford, East Lyme, Montville, Killingly and Stonington.
The authority agreed to delay approval of the new map for a month to allow time to meet with the concerned lawmakers.
Speaking with CT Examiner last week, authority Executive Director Nandini Natarajan said her agency would remain open minded in its conversation with the lawmakers, and said she will need to review more information to determine whether their concerns about investment in the region being limited by the new map are warranted.