Thomas Breen file photo
The recent decision by the Connecticut Housing Finance Authority (CHFA) to deny financing for Seabury Cooperative Housing’s capital improvement project raises a crucial question: Why would CHFA favor dissolving the limited equity cooperative model, which empowers its members, in favor of a tax credit property model that leaves members powerless to govern themselves?
Established in 1972, Seabury Cooperative Housing has been a beacon of affordable housing in the greater New Haven area. The cooperative model allows members to earn equity and actively participate in governance, fostering a strong sense of community and ownership. Under the current Board’s leadership, Seabury has seen significant improvements in property operations, financial health, and member engagement.
Despite these achievements, CHFA’s recent denial, citing concerns about debt repayment and funding shortfalls, overlooks Seabury’s financial turnaround and planned monthly charge increases. The cooperative now boasts $500,000 in its operating account and a 98.7 percent on-time payment rate, a testament to its stability and resilience.
In a not-so-subtle way, the powers that be at CHFA have looked upon limited equity cooperatives with less favor. Turning a blind eye from its mission statement, CHFA has pushed such properties toward establishing tax credit status.
A tax credit property is a real estate property that qualifies for tax credits, thereby reducing the owner’s taxable income. These properties are typically part of government programs designed to encourage wealthy investors to fund certain types of housing or real estate developments.
Low-Income Housing Tax Credit (LIHTC) is a federal program in the United States that incentivizes the construction and rehabilitation of affordable rental housing for low-income households. Property developers receive tax credits in exchange for building or renovating affordable housing units and agreeing to maintain their affordability for a specific period, usually 15 – 30 years.
The limited equity cooperative model at Seabury provides members with an affordable, unique living arrangement in a prime location in the midst of New Haven. Seabury sits adjacent to Yale University and St. Raphael’s hospital, as well as many of the city’s cultural amenities. This model has allowed Seabury to thrive, turning a near-bankrupt cooperative into a financially stable and vibrant community.
Switching to a tax credit property model would strip members of their governance rights, leaving them powerless to influence decisions that affect their homes and community. This shift contradicts CHFA’s mission to promote economic development and alleviate housing shortages for low-to-moderate income families.
Given CHFA’s mission, it would seem that Seabury is an ideal candidate for support. Seabury’s longevity and progress aligns perfectly with CHFA’s goals, making the decision to deny funding perplexing.
I urge CHFA to reconsider its decision, engage with Seabury to discuss its funding needs, and recognize its potential to continue providing quality, affordable housing under the cooperative model in the Elm City.
Ronald Barba is general counsel to the Seabury Cooperative Housing, Inc. and Managing Partner of Bender, Anderson and Barba, P.C.