This man wants to sell you a house in New Haven — especially if you’re a city employee now living in the suburbs. And he’s offering an $80,000 discount.
This man is not a real estate mogul, or a broker, or a developer. He’s Erik Johnson, the head of the city’s housing and anti-blight agency, the Livable City Initiative.
In an effort to dispel the notion that New Haven is unaffordable because of high taxes, LCI has launched a new publicity drive for existing and newly expanded subsidies available to people buying homes in New Haven.
City workers, teachers, cops, and firefighters can take advantage of slightly more subsidies, part of an effort to have New Haven employees live in New Haven.
The new campaign is called Re:New Haven. It features a fancy website, billboards along I‑91 and I‑95, and posters on Metro North trains. Those new ads offer up to $80,000 in incentives to buy a home in New Haven.
New Haven’s homeownership rate is now at between 32 and 34 percent, Johnson said. “We want to get to 35 percent and north of that.”
Re:New Haven is intended to attract working- and middle-class families to New Haven, people who might otherwise be scared off by the city’s higher taxes and crime rate, Johnson said. Re:New Haven is a way to “re-brand” the city as a desirable and affordable place to live.
Re:New Haven is also intended to attract people already living in New Haven as renters, people who might not otherwise be able to afford a home.
Homeownership is more difficult than it once was, Johnson said. Decades ago, the average downpayment on a new home was around 5 percent of the average income, he said. While home prices have risen, income levels have not kept up. A downpayment can now be about 30 percent of a family’s income.
Re:New Haven’s incentives are intended to bring homeownership into reach for more people.
The incentives come in three forms that are bundled together, Johnson said. Here’s how it all works:
Re:consider
The first incentive, dubbed RE:consider, is no-interest, forgivable loans for downpayments or closing costs on new homes. The loans, for 6 percent of the sales price up to $10,000, area available for people with qualifying income levels who are buying homes they plan to live in.
The downpayment loans carry 0 percent interest. Each year for five years, if the owner lives in the home, 20 percent of the debt is erased. After five years, participants owe the city nothing.. That feature is meant to prevent real-estate “flippers” from taking advantage of the program to make a quick profit.
Johnson said the city has been able to expand the program by adding local and state money to federal funds. “We have just under $3 million we intend to put on the street.”
The downpayment assistance program is not new; it’s been around for years. It has, however, recently been expanded in a couple of ways.
First, the assistance is available for individuals or families who make up to 120 percent of the area median income (AMI). Previously, the level was 80 percent.
Second, the program now includes extra incentives — up to $2,500 more — for city workers, cops, firefighters, teachers, and members of the military.
“We want people who work in the city to live in the city,” Johnson said.
People in New Haven, from taxpayers to elected officials, have long been seeking ways to have more city workers living in the city. The idea is that a cop, for instance, who lives in New Haven would have a more personal interest in keeping the city safe.
By law, the city can’t require workers to live in the city. But it can offer incentives.
Re:novate
The second incentive, dubbed Re:novate, is the city’s Energy Efficiency Rehabilitation Assistance Program (EERAP). Homebuyers can get up to $30,000 in forgivable, no-interest loans to pay for home improvements to cut energy costs. That includes things like new windows, new furnaces, and better insulation.
One of the reasons people don’t want to buy in New Haven is because the city’s older housing stock requires a significant investment in maintenance, Johnson said. EERAP eases that burden.
Re:imbursement
The third incentive, dubbed Re:imbursement, is the New Haven Promise program, which helps pay college tuition for New Haven students who get good grades in high school. Students can get up to $10,000 per year for college, or up to $40,000.
Promise helps give young people educational opportunities they might not otherwise have, Johnson said. “I see it also as a real estate attraction strategy,” he said. Families who are living in surrounding towns and are already working in New Haven or sending their kids to New Haven magnet schools might just be tempted to move into the city, lured by the promise of $40,000 towards future college bills, Johnson said.
Taken together, the three incentives make New Haven more affordable, Johnson said. “This mitigates some of the perceived effect of higher taxes,” Johnson said. Re:New Haven offers “a compelling argument for working and middle income families figuring out where to invest” in a new home.
Those families might now be renting, or they might be living in another town. Johnson said the city is casting a wide net to attract new residents. “We are marketing homeownership in New Haven, beyond New Haven.”