Ryan Chiao, Senior Photographer

A new state policy was instituted by the Connecticut State Housing Finance Authority last week that makes the process for establishing affordable housing projects in Connecticut easier by updating a preexisting $10 million low-income tax credit program. 

In the old policy, when developers applied for a certain area, the state finance authority would consider the area’s opportunity score and whether it fell above or below the state average. The score, used to determine whether or not the proposal would be accepted, was based on school performance, poverty level, employment data and the proximity to a community college. The state’s Housing Finance Authority released its “Federal Low-Income Housing Tax Credit (LIHTC) Program,” which outlines additional guidelines, including a pre-application process and an evaluation of environmental concerns at the site, with the aim of providing funding for developments in underserved communities.

“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,” Terry Nash Giovannucci, community engagement manager at the Connecticut Housing Finance Authority, told CT Insider. 

Two weeks ago, the Partnership for Strong Communities hosted the 2021 Affordable Housing Conference during which they discussed the new policy. At the conference, Governor Ned Lamont noted that “strong affordable housing will bring us strong communities.” 

“There is nothing quite like a highly contagious and deadly disease to make clear that housing is healthcare — it always has been — and stable, safe and accessible homes are a prerequisite to personal and public health,” Diane Yentel, president and CEO of the National Low Income Housing Coalition, said in a press conference. 

Part of the state’s efforts to identify “opportunity-rich and opportunity isolated communities” includes the development of an opportunity map, which outlines areas for potential growth based on factors such as school performance, poverty concentration and safety. The map is used by the Department of Housing and attempts to address a history of discriminatory policies throughout Connecticut. 

To address the competition between preservation projects and new construction, there will be a specific category included for preservation projects. 

“About a quarter of projects will be preservation of existing multi-family housing while 75 percent will be construction,” Giovannucci said.

Additionally, applicants will be able to meet with housing finance authority staff before final applications are due in order to review their application before final consideration. 

The United States Department of Housing and Urban Development gives nationwide LIHTC initiatives about $8 billion in tax credits annually for use in affordable rental housing in each state. 

LIHTC provides four- and nine-credit tax credits. The Connecticut credit ceiling is $10 million annually, meaning that the selection process for credits is highly competitive and contingent upon an application. The nine percent exceptions require an application, while the four percent tax-exempt bond financing application just requires a letter confirming a development’s compliance with the Section 42 of the IRS code.

Aicha Woods, executive director of New Haven City Plan Department, told the News that “CHAFA awarded New Haven four projects this year, which was great. We have some really great affordable housing projects coming on. New Haven has definitely benefited a lot from the four percent and nine percent programs.” She was surprised to hear New Haven ranks fairly low on Connecticut’s opportunity map.

“New Haven already has a lot of affordable housing, so it may be that they are trying to spread it out across the state,” Woods said.

According to the National Low Income Housing Coalition, Connecticut currently has a shortage of 86,717 rental homes that are affordable and available for extremely low income renters.