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In the decade of its existence, Connecticut’s affordable housing appeals procedure has been a lightning rod for controversy. Its purpose is to curb exclusionary zoning practices. It gives developers incentive and clout to push for new subdivisions if a quarter of the planned units were earmarked for low-income renters or purchasers, or are subsidized housing. Rep. Patrick J. Flaherty, D-Coventry, co-chaired the blue ribbon commission to study affordable housing, which met last summer and fall. He knew well the complaints about the old act. The housing wasn’t actually affordable. Formulas were not applied even-handedly. Developers were gaming the system through unintended loopholes. In virtually every legislative session since the appeals procedure was adopted in 1989, lawmakers have pushed ideas that would re-jigger the formula — often with an aim to exempt more towns from the act. Currently 137 of Connecticut’s 169 towns have little or no affordable housing, and fall under the act. Towns with 10 percent affordable housing are exempt. Towns wanted out. One proposed approach was to redefine low-income housing units to boost the percentage classified as affordable. For example, in-law apartments could be counted. Another, more brief, “out” was a one-time, one-year moratorium available to towns which made substantial progress. Raphael Podolsky, a lawyer and lobbyist for state legal aid groups, says that Flaherty took a broader approach to problem-solving throughout the summer and fall meetings of the commission. Instead of focusing on the most controversial parts of the act, Flaherty listened to what people wanted — and found ways to achieve it. Town governments and housing advocates both wanted the housing to be more affordable. The revisions adjust the affordability guidelines to make more dwellings available to lower income residents over a longer period of time, and eliminate loopholes. Second, the new revisions to the act provide a three-year moratorium from the act’s appeal remedy, when towns make substantial progress in creating an affordable housing mix. The state Department of Economic and Community Development is charged with creating regulations for a system that rewards progress with points toward a moratorium. Sen. Eric D. Coleman (D-Bloomfield), a co-chair of the commission, said he’s not thrilled by the moratorium provision, but believes it will please some of the old act’s critics. “If they increased the number of affordable units by two per cent, they would be entitled to a moratorium.” Coleman noted that under the old act, a town could achieve a permanent moratorium by assuring that ten percent of its housing falls under the affordability guidelines. MORE FLEXIBILITY However, said Flaherty, some Connecticut towns are never going to achieve 10 percent affordability, and were never expected to. But under the new system they can achieve a three-year period of relief for creating new housing, with extra credit given in the categories least likely to be served by normal market forces. For example, a family ownership unit affordable to people at or below 40 percent of median income is worth two points, and a rental unit in the same category is worth 2.5 points towards a moratorium. Conversely, units for the elderly at or below 80 percent of median income are worth half a point towards a moratorium. That’s because towns don’t need as much incentive to create housing for the elderly, but low cost family rental units are a scarce commodity. “I think what’s been achieved is a win-win solution,” said Podolsky. “It’s part of the balancing process. If you make it too difficult to build, then you end up with nothing. The idea is to maximize the affordability that you’re going to get without shutting down the market. The towns win either way. If the housing’s more affordable, then the public purpose of the act is being fulfilled — and I suppose from their point of view, if it shuts down the market, they’re happy because they didn’t want housing anyway.” Connecticut’s system for defining “affordable” units is administered by the state Department of Economic and Community Development, which factors interest rates and median income levels to establish a level of affordability. One factor that has previously been a wild card has been the down payment. In one egregious instance, a development in Fairfield County targeted empty-nesters for the affordable units. If they’d just sold a house, they were often cash rich but had the low income stream to qualify for the affordable units. The developer placed a down payment amount of about $100,000 — a technique that created a small mortgage and allowed nominally “affordable” housing to be sold at big ticket prices. Now, under the revised act, the DECD is directed to calculate affordability levels based on a down payment not to exceed ten percent. Closing such loopholes, said Coleman, helps answer criticism that the act was being used simply to create high density housing to increase developers’ profit — with little regard to making sure the housing went to low-income citizens. More work needs to be done on the math, contends Robinson & Cole lawyer and planner Dwight Merriam. As the formulas are now calculated, a maximum selling price is governed by monthly mortgage payments for the buyer. Thus, a 20-year owner of an affordable unit, if forced to sell in a period of high interest rates, could easily lose all the equity “banked” in the dwelling. “Nobody thought about this when the system was designed,” says Merriam. “Who can know that we’ll never see double-digit mortgage rates again? But if that happens, the whole burden is on the low-income owner.” MEANINGFUL GAINS Podolsky, an affordable housing advocate who has followed the legislative battles for a decade, says the changes in the affordability guidelines should help create the housing that’s needed most. The percentage of housing set aside as deed-restricted “affordable” units is increased from 25 to 30 percent under the act, which takes effect Oct. 1. The additional five percent is earmarked to be affordable to those earning 60 percent of the median area income. The period for the affordability restriction is increased from 30 to 40 years. Although it is impossible to calculate precise per unit figures without a fixed interest rate, Podolsky says the “80 percent” units under the act should sell for about $135,000 and the “60 percent” units should be between $95,000 and $100,000. While some houses are available in Connecticut in that price range, says Podolsky, “these units will be in communities where there is nothing in that price range.” The legal “stick” of the zoning-driven appeals procedure creates headlines and court cases, but it’s only one feature of making housing affordable, notes Flaherty. “The battle that I’m losing but will continue to fight, is trying to differentiate between affordable housing in general the issues surrounding affordable housing and the affordable housing appeals procedure. People use those two terms synonymously when they should not.” A feature recommended by the commission was a $50 million affordable housing trust fund. It was to be seeded with part of this year’s budget surplus. In the final weeks of the session, a version of the idea that would be partly funded with $10 million in union pension funds was alive as a concept, but never came to a vote. The trust fund concept, wholly independent of the zoning-driven method of promoting affordable housing, and is a project worth pursuing in coming legislative sessions, said Flaherty. For the time being, said Podolsky, the changes in the affordable housing law may create a period of new stability in the appeals procedure, so that lawmakers and affordable housing advocates will “not have to come back and have these fights every year.”

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