Affordable Housing Elusive In Boom

New Haven no longer has to entice builders to bring apartments to town renting for up to $5,000 a month. Luring desperately needed affordable housing is proving trickier, an expert panel agreed.

Some of the key players in building low-income housing throughout the state discussed that challenge at a panel Thursday afternoon at the United Way’s offices at 370 James St. The panel was organized by Opening Doors, a regional alliance for ending homelessness.

Market-rate apartments have sprung up throughout the city in the past couple of years, including 136 units at The Novella on Chapel and Howe Streets, 158 units at Winchester Lofts at Winchester, Munson and Henry Streets, and 160 units at College and Crown downtown. Rental prices range from about $1,300 to $5,000 a month.

Meanwhile, the city and landlord Northland Investment Corp. are in the process of evacuating the 301-unit subsidized housing complex Church Street South, whose buildings have received dozens of condemnations and citations for unsafe conditions. The city has not yet figured out where many of those people will go.

People desperately need affordable housing; the cost of housing is considered a burden when it is more than 30 percent of the household’s income, said Richard Porth, United Way president. About 57 percent of households in New Haven earn more than the federal poverty level but cannot pay for all of their essential costs, he said. Those households are below a threshold called ALICE, an acronym for Asset Limited, Income Constrained, Employed.

About 35 percent of Connecticut households are below that threshold.

“Affordable housing” and ​“decent housing” are not necessarily the same, Matthew Nemerson, city government’s economic development administrator, said at Thursday’s forum. As factories moved into city limits long ago and housing sprung up around them, workers were packed into tenements — affordable but not decent.

“We really want housing that’s dignified,” he said. ​“Who’s going to pay for it?”

As the neighborhoods in the city continue to change, people want to be able to walk to work, meaning the areas peripheral to downtown are increasing in value, Nemerson said. That is happening too in cities such as San Francisco, New York and Boston, where market-rate apartments are filled and demand for housing is high.

“They’re trying to figure out how they can actually add additional taxation or permitting cost or some sort of internal transfer to people who are building very expensive housing to make sure they can build affordable housing,” he said.

Those cities can require developers to provide affordable housing within the unaffordable development at their own cost, since rent is in some places higher than the cost of building, he said.

A few years ago in New Haven, rent increased to the price where developers can afford to build without losing money, he said. But city officials here have less leverage to ask developers to absorb the cost of affordable housing, Nemerson said. ​“We ask them to include it and we try to work with them to afford it,” he said.

The city has limited funding for subsidizing developers for the affordable housing, he said. But it asks developers to build at least 10 percent of affordable housing into each building, at a negotiated rate that can vary, he said.

(Another debate in town centers on how to define ​“affordable” housing, whether new government-subsidized apartments will house low-income or middle-income people. That often depends on the rules of state or federal programs that subsidize those apartments’ construction, a subject of current discussions over how to include 30 percent ​“affordable” housing in a development planned for the Hill neighborhood.)

John Bradley, executive director of Liberty Community Services, asked the panelists about the many three-family homes in the city, many of which are now physically deteriorating. Are those obsolete in today’s housing market?

Nemerson said that New Haven has a ​“rich and wonderful supply of larger homes,” traditionally affordable and owned by families who rent out one or two of the apartments. Now many those houses are owned by landlords who rely on federal Section 8 rent-subsidy certificates as their business model. Though the rent in a neighborhood may ​“want to be $1,400,” for example, the certificates can be worth $2,500 per month, a ​“gold mine” for the landlords, he said.

One unintended consequence is that rents spike for houses nearby without Section 8 certificates, he said. ​“We’re seeing a strange impact where the [federal Department of Housing and Urban Development] rents are becoming the market rent, not the other way around,” he said.

Why can’t cities just get lots of housing built, if the demand is so high? asked Amy Casavina Hall, United Way vice president and moderator of the event.

“We make it impossible for people to build lots of housing,” Nemerson said. People have in the past have rejected plans for large-scale subsidized or affordable housing in their neighborhoods, he said, especially in the suburbs.

“Only New Haven will end up building any kind of large-scale anything,” he said.

Brett Hill, executive director of HOME, which matches people with appropriate affordable housing, said a state law is helping some developers build in suburbs. The statute 8 – 30G lets developers who build affordable apartments bypass zoning laws in towns with less than 10 percent affordable housing.

“Developers are making a fair amount of money” on the large complexes, he said. ​“The system can work.”

Affordable and subsidized housing is much more expensive to build than market-rate or luxury developments, Nemerson said. Developers must put more money and energy into following federal law for building quality subsidized housing, he said.

Prices stay consistent if an area has a diverse stock of housing, said Katy Shafer, deputy policy director for the Partnership for Strong Communities. People wary of affordable housing in their neighborhoods are only thinking of the ​“unfortunate examples,” she said.