Old Lyme Partners with Habitat for Humanity for Affordable Housing Project

Image Credit: Robin Breeding


TwitterFacebookCopy LinkPrintEmail

OLD LYME —  The Board of Selectmen voted unanimously on Thursday to partner with Habitat for Humanity on two affordable housing developments in town, and will be able to use a $150,000 ARPA grant to partially fund the project. 

In 2019, the town purchased two 3-acre land plots for $50,000 each as part of the $600,000 purchase of McCulloch Farm for open space, with the option to develop an affordable single-family house on each lot. If the option is not exercised by September 2024, the two properties will become part of the town’s open space. 

If the town chooses to develop, however, it must reimburse $100,000 to the land acquisition fund, which can be covered with a portion of the ARPA grant. 

Karen Winters, a former member of the town’s Affordable Housing Commission, asked if the ARPA funds could be used if the owners of the affordable homes were not from Old Lyme. 

Michael Fogliano, chair of the Affordable Housing Commission, responded that it was not possible in the application process to stipulate the homes go to Old Lyme residents. 

Sarah Lufler, executive director of Habitat for Humanity of Eastern Connecticut, said while there were factors that contributed to an applicant’s score in the selection process – for example, the condition of the applicant’s current housing or how quickly an application is submitted – protocol for fair lending practices must be followed. 

“What you can control is community involvement, where we advertise, the ability to get the message out to folks in town that there will be two homes available,” she said. “And if you have friends or family, walking them through the application process making sure that application gets to the office on the first day – it’s a 30-day application period.” 

Winters also questioned what would happen to the ARPA funds if purchasers decide to sell their homes just a few years later. 

Under the agreement between the town and Habitat for Humanity, each home will be sold to an individual or family who qualify at 60 percent of the area median income and who have been vetted through Habitat’s application process. Habitat will provide a zero-interest loan and hold the 30-year mortgage and a second mortgage. 

If owners then decided to sell, Lufler said the loans would need to be satisfied first and that Habitat had the right of first refusal. Ideally though, the family would stay for 30 years, she said. 

“So to sell early, when there’s no money that would go back to the homeowner unless the market rate was significant … it’s very unlikely, but possible. Everything’s possible,” she said. 

It has yet to be determined whether the houses will be sold with land leases, in which Habitat holds the lease, or with the property included. Lufler said that with a land lease, the owner cannot sell the home at market rate. If the homeowner owns the land they can sell at market rate but Habitat has the right of first refusal. 

Habitat has built 107 projects in the region over the last 35 years, including three houses in Lyme and three in East Lyme and, according to information from the Affordable Housing Commission, 95 percent of the affordable homes built by Habitat over the last 35 years are still in its portfolio and remain protected as affordable. 

Old Lyme currently has 79 affordable units, or 1.6 percent of the town’s housing stock, which is down from 85 in 2020 due to the loss of 10 assisted mortgages, according to data from the Affordable Housing Commission. 

First Selectman Tim Griswold questioned how maintenance of the homes would work and if Habitat would provide inspections.

“Is there some measure of control?” he asked.

Lufler said Habitat does not inspect the homes once owners purchase them. 

“We provide support and a warranty for the first year. Control? No. Assistance? Yes,” she said. “We try to provide as much education as possible. It’s a 12 to 18 month journey. We teach them how to budget, how to buy homeowners insurance, have to have an emergency fund, how to work a lawnmower. They walk out with a manual.” 

Owners provide sweat equity of over 400 hours to help build the house and “learn what’s behind the walls and under the floors,” Lufler said. 

Debbie O’Neill, Old Lyme resident, commented that she had seen a number of Habitat houses that had fallen into disrepair in the Southern states. She asked how the town would enforce the number of residents allowed in each home.

“There might be a family, like a single mother with like two children and they move into this house, and then before you know it, there’s cousins moving in, there’s a brother moving in and you’ve got 10 people in the house that was meant for three people.”

Lufler said that Habitat is a program designed to help families escape overcrowding and to help them not spend more than 30 percent of their income on rent.

“It’s important to know that we’re not giving homes away. They’re buying them at 30% of their annual income,” she said. “They’re buying them to get out of having five people in one bedroom. So as far as the overcrowding of homes once they’re purchased, I don’t have any experience with that. I would just like to remind folks that that’s exactly what we’re trying to prevent.” 

Laura Fitzpatrick-Nager, associate pastor at The First Congregational Church of Old Lyme, called building two affordable homes in Old Lyme “an incredible step forward.” She expressed gratitude to the Affordable Housing Commission for its “steadfast leadership” and praised Habitat for its vetting process.

Mona Colwell, Old Lyme resident, asked if the town would be fined by the state if it didn’t meet the statute requiring 10 percent affordable housing. 

Fogliano answered that in towns with less than 10 percent, the 8-30g statute allows developers to create developments with at least 30 percent set aside as affordable. But the statute also allows developers to override local zoning regulations as long as there is no threat to the health or safety of the public. 

The Board of Selectmen will appoint a steering committee to coordinate working with Habitat and manage the ARPA funding for the project at their next meeting on June 5. 

Correction: This story has been corrected to reflect that ARPA funds can be used for the affordable housing project, and that the application for funding was in compliance with Federal rules.