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Eastern Connecticut Lawmakers Oppose Development Tax Credit Changes

A bipartisan group of lawmakers from Eastern Connecticut said their part of the state will get frozen out, by a change in the formula used to select low income housing projects for a special tax credit.

State Senator Catherine Osten says the loss of the low-income housing tax break in her part of the state might hamper other developments, as well.

"This puts a question in the minds of developers: 'Why would we want to develop in an area that the department of housing and Connecticut Housing Finance Authority do not recognize as worthy of these low income tax credits?'" Osten said.

Osten says Eastern Connecticut lawmakers may pursue a change in state law to address the issue.

But Connecticut Housing Finance Authority CEO Nandini Natarajan said there are other resources that her agency can make available to communities that want affordable housing.

"There has to be a certain level of scale in the developments that are being built using the 9 percent credit," Natarajan said. "So certain rural communities may not be suitable for the 9 percent credit."

She says some small towns may not have the infrastructure for larger developments.

The changes to the 9% Low Income Housing Tax Credit Program were approved by the Connecticut Housing Finance Authority board last week as part of the 2022 and 2023 Qualified Allocation Plan.