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In the World of Housing, Everything’s Connected

In the World of Housing, Everything’s Connected

The latest Connecticut state capital budget proposes no new bond authorizations for affordable housing development. At first blush, curtailing borrowing may seem to be an obvious solution to getting the state’s finances back on track.

Everyone who manages a household budget can get behind that concept … at the family level, less borrowing means less debt and more savings. However, on a larger scale, a decision that may seem simple is truly complex. That’s because everything is connected. ‘Fixing’ one problem can easily spawn other problems in its wake.

In a state where 40 percent of the population lives in poverty or from paycheck to paycheck, affordable housing is a necessity. We partner with any number of local organizations dedicated to ending homelessness and making housing safe and affordable for everyone. Many hundreds of units of affordable housing are still needed to adequately fulfill the demand.

The Partnership for Strong Communities (a Liberty Bank Foundation grantee) notes that an end to new bond authorizations puts the future of affordable housing development in Connecticut at risk. Here’s how the group sees the downside of this decision.

  • Much of the bond funding previously authorized by the Legislature has already been allocated or awarded to projects but has yet to be approved by Bond Commission. Affordable housing developers invest hundreds of thousands of dollars preparing project applications to access these critical state housing funds. Without new funds budgeted for coming years, many developers will stop working in Connecticut.
  • It will become much more difficult to leverage federal housing resources like the Low-Income Housing Tax Credit (LIHTC) without new authorizations of state funds to match. In 2018 alone, the Connecticut Housing Finance Authority made LIHTC awards of $8 million, combining the tax credits in developments with $35 million in DOH funds.
  • As affordable units reach the end of their affordability restriction timeline, there will be little to no resources to preserve their affordability and invest in the rehabilitation and repair our state’s public housing stock so desperately needs. Within the next five years, more than 5,400 publicly supported rental homes in Connecticut are at risk of losing their affordable restrictions.

Bottom line, we hope both concerns can be addressed – a strong and growing economy for the state and budget-friendly housing options for hard-working low-income families. On the state side of the equation, the partnership makes a strong case for affordable housing ultimately supporting an overall fiscally healthy state. read the analysis