Hundreds of affordable housing apartments will be added to six Connecticut communities through $9.6 million in federal funding.
The Low-Income Housing Tax Credit program, reestablished by the Internal Revenue Service in 1986, provides each state with funds dedicated to establishing more affordable housing.
In Connecticut, the money is allocated by the quasi-public Connecticut Housing Finance Authority (CHFA).
“Because it's super competitive, there's a process built up around it and it's one of those things that the affordable housing development community kind of works towards on an annual basis,” Marcus Smith, CHFA director of research, marketing and outreach said.
This year, the Authority received 18 applications and selected six towns: Stamford, Greenwich, New Haven, Farmington, Meriden and Hartford.
Developers receive tax credit for the projects, and in turn sell the tax credits to private investors to obtain equity funding for their developments.
Each state receives $2.75 from the IRS for every one person, based on census data, according to Smith. Those funds added up to $9,588,663 for the tax credit program in Connecticut.
CHFA says the tax credits are estimated to generate more than $90 million in equity from private investors for seven proposed affordable multifamily housing developments in the state.
Through the developments receiving the tax credit, 320 affordable housing apartments will be created or rehabilitated and an additional 50 units will be sold at market-rate.
Stamford’s Oak Park Phase 1 project received the most funding, with $1.83 million to rehabilitate existing apartments.
In a three-phase project, 60 existing units will be replaced with 61 units contained in seven townhouse buildings and one multifamily building. The building was first constructed in the 1940s under the State Moderate Rental Program.
All units will be affordable to households earning at or below 60% of area median income (AMI). Nineteen project-based vouchers will support very low-income residents, those earning at or below 25% area median income.
The Housing Authority of the Town of Greenwich is in the fourth phase of development for a 144-unit project. The latest phase, funded with $1.44 million from the tax credit program, consists of the renovation of 36 two-bedroom and 12 three-bedroom units. All 48 units will be affordable to households earning at or below 60% of Area Median Income (AMI).
Funding recipients are chosen based on how the projects align with the state’s Qualified Allocation Plan, which reflects the State’s housing priorities, including rental affordability, financial efficiency, sustainability, local impact and opportunity characteristics.
“It's a limited resource that we have, so we want to make sure that the awards go to developers who are able to take on the responsibility and the LIHTC program is a fairly complicated program,” Smith said. “So making sure that the awards go to the developers who are familiar with the complexity and are able to kind of navigate it and really bring units online.”
Since its creation 37 years ago, the Low-Income Housing Tax Credit program created more than 30,000 affordable housing unitsin Connecticut, contributing nearly $6 billion in economic activity in the state and helped support more than 50,000 jobs, according to the Department of Economic and Community Development’s REMI model.
“Investing in the creation and preservation of quality affordable housing is a vital component of economic development in Connecticut,” CHFA Executive Director Nandini Natarajan said. “Not only does it provide stability and opportunity for low-income households, but it strengthens the health and well-being of entire communities.”
