And The Home-Buy Lottery Winner Is …

More of exactly this!!! Congratulations to everyone involved. I hope the other families in the lottery find their homes soon, too.

Buy high, sell low..... it's the New Haven way!

Would be nice to know more about the lottery applicants? I would hope and expect all of them to have been long-term New Haven residents who have missed out on building generational wealth

Wonky question. Is the difference between the purchase price and the market value treated as a gift for tax purposes? If it is, the family will face a substantial tax bill.

I am happy for the family. But they are middle-income - there are many families who are in far greater need. And this approach is not scalable.

Doreen, any idea of the construction cost? I could not find any info on the Building Department's website.

CONGRATULATIONS to Kostantinos. He and his wife are members of the Blake St Tenants Union. They will be missed. Many happy returns.

Let's see - it cost taxpayers $690K; is worth $370K and was sold for $240K. LCI should not be building any homes. And those solar panels may not cost the family anything but they cost us, the taxpayers. One other thing: Do they have to pay full property taxes or is that a gift too?

And The Home-Buy Lottery Loser Is …

The New Haven Taxpayer......again.

I am so happy for Konstantinos that he and his family got a nhome for themselves. This does, however, seem like a colossal misuse of money. The taxpayers paid 640,000 dollars for a 240,000 dollar house. I am all for helping people get housed, but why didn't we just give Konstantinos 360,000$ (the price of the house) for him to spend on any house he chose, and then they could have given a second 280,000$ dollars to someone else. Instead, lots of two families housed the money got wasted on bureaucrats and middlemen. If you're going to give money away, at least give it away efficiently by just giving it straight to the people who need it like Konstantinos (which by the way is an awesome name).

I am happy for the family. But this is NOT the way we actually solve the housing supply issue in our city…

Let’s say we need 10,000 more of these, which I think we do, in our city. Our housing stock is outdated and crumbling.

$100,000 loss per home * 10,000 = $1 BILLION dollars.

It ain’t the way.

Cut red tape, simplify zoning, and make the market forces create more housing supply.

Go back and read the article and comments from when this house broke ground. Elicker and the city did excactly what they set out to do - waste taxpayer money, lose money on a house. And in this market, how in hell do you set out to lose money? It could have been set up as a townhouse .. and sell them separately. For cost. Why lose money? And actually lose more than originally projected too. A loss of nearly half a million at $450K

Westville man, thanks.

OCD, a clarification. The article notes that a different two-family house, on Howard, cost $690,000. It does not mention the construction cost of this property.

I hope this program does two things. If not, these provisions should be included in future sales.

First, the program should require the buyer and any future owners to rent any units in the building not occupied by the owner’s family to low- or moderate-income households.

Second, it should require a claw-back of the windfall the buyer receives if they flip the property. I am sure the Teklehaimanots will live in the house for many years. But if they sold it next month, they would likely gain more than $100,000.

I believe there is broad support for (1) helping low- and moderate-income people afford housing and (2) promoting home ownership. But this program instead aids middle-income people. And it promotes homeownership in a particularly cost-ineffective way.

I think it would be more cost-effective for the city to instead expand its down payment assistance program. Many moderate-income renters can afford the carrying costs of homeownership, but are still renting because they can not come up with the downpayment. This is true for many younger adults paying off their student loans, among others. The continued presence of these individuals in the rental market is one of the reasons why rents are so high. Further information about the downpayment assistance program is available here. https://www.newhavenct.gov/government/departments-divisions/livable-city-initiative/homebuyers/down-payment-closing-cost-assistance-financing

ThreeFifths will correctly comment that homeownership is not for everyone. But it makes economic sense for many/most households.

Expanding on EastWest’s comment, the city can and should use zoning policy to promote both homeownership and affordability.

As Ben Trachten has noted, there are several ways the city could simplify the zoning process. And as Liam Brennan has argued, the zoning ordinance should be amended to facilitate development of vacant lots that is consistent with the surrounding neighborhood. Both approaches would increase housing supply, a necessary step in addressing the affordability problem.

Currently, very little owner-occupied housing is being built here because developers can make more money building rentals. The city could amend the zoning ordinance to encourage the former. For example, it could permit condos and co-ops to be built in industrial zones as of right (they currently require a variance). The city could also allow for somewhat high density limits for owner-occupied housing vis-a-vis rental housing.

The city could also use tax policy to promote homeownership and affordability. Currently, developers of new housing and property owners who substantially rehabilitate existing housing are eligible for the same tax deferral, regardless of how affordable it is or whether it is owner-occupied. I do not think that new developments that are entirely market rate and merely meet the State Building Code should get tax breaks. I think affordable housing, owner-occupied or rental, should. Housing that is deeply affordable should get a larger benefit than housing that is only affordable for moderate-income households. Similarly, I believe that housing that goes beyond the building code should get a tax benefit in proportion to how sustainable it is. Energy efficiency reduces the cost of owning or renting housing, making it more affordable.

So while it’s nice for the winner of the house lottery, this system is not sustainable at these numbers, nor is it helping those most in need of housing.
Plus, organizations like Habitat For Humanity require sweat equity from the new homeowner to build the home, therefore they learn valuable home repair and maintenance skills in the process. The city does not seem to be doing the same thing.
And if the city owns the solar panels, who maintains and repairs and replaces the panels when they get damaged from storms or have to be moved for a new roof, or need to be replaced?
And then there’s the gift tax or lottery winnings tax issues. Maybe a tax expert can chime in on those issues.
One of the potential lottery home owners said they would occupy an entire multifamily because they have multigenerational family members in need of housing, but they don’t realize they will need to rent out the second unit to get funds to pay rising taxes, maintenance, repairs, insurance, utilities, etc.
The current real estate market is inflated since 2019 by not only high demand, and lack of supply, but also investors, speculators, flippers, megalandlords, corporations, etc who buy older stock and who do lipstick on a pig makeovers, to resell at inflated prices, or tear down and build new luxury “market rate” housing.
And not everyone is prepared for the cost and responsibility of homeownership or being a landlord. We need more apartment buildings and condos and townhouses for low income and deeply low income tenants who can not afford to be homeowners, or don’t want to be one.
Our municipalities need to make wiser decisions with more impact for those who need affordable housing the most.
How much does a 2 family cost to build compared to an apartment or condo or townhouses/rowhouses with multiple units in them, and how many more families can we house than in a typical 2-3 family building? How can we get more bang for the buck?

As other commenters have noted, this model is, unfortunately, not scalable for addressing widespread housing unaffordability issues. Hundreds of thousands of dollars were lost on the sale of this property when compared to the cost of constructing it. And that doesn't even factor in the costs of City Hall staff time for administration and City official's time for ribbon cuttings and press conferences.

While liberalizing some land use regulations to enable more development is unlikely to worsen the housing affordability crisis, the impact that the private housing market can have on overall affordability is also limited. This can likely help moderate-income households, but helping low-income households requires different non-governmental and non-market approaches to providing housing.

Kevin…sorry but the $690,000 was spent on building this house at 455 Howard, not another house. It doesn’t really add up and maybe 2 families should have been picked to share this house- each paying the $240,000. At least closer to the cost. I hope a realtor didn’t get any money out of this deal. If you’re participating in a lottery, you don’t need one! And 1 out of 7 is very good odds in my opinion. The other candidates should be hopeful that they will be picked soon. ( are more houses being renovated/ built for this program?) Congratulations to this hardworking family who saved and waited to get this house.

Irobin, as my wife reminds me, I am wrong sometimes. This is one of those times.

As to your idea, given that the building is on one lot, splitting the units between two owners would have been difficult although not impossible.

New Haven Urbanism, unfortunately I have to agree with you. The city has taken steps to help a relatively small number of moderate income households, who need the help. It has done less to help low-income households. They need the help more but are more expensive to serve. Let’s say the average market rent for an existing apartment here is $1,800 (Zillow’s estimate). A four-person household at 60% of AMI can afford a rent of about $1,400, requiring a subsidy of $400 per month per apartment. A low-income household at 30% of AMI can only afford a $900 per month.

You refer to non-market/non-governmental forms of housing, which you have discussed in previous comments. Such approaches as social housing have worked in other countries. But they require substantial institutional support which is not available here.They are worth pursuing, but will not substantially affect housing supply and cost in the foreseeable future.