Nonprofits worry Lamont’s ‘debt diet’ will hinder housing
Amid Gov. Ned Lamont’s proposed “debt diet,” area nonprofits are concerned that the plan could deal a crushing blow to the need-based housing.
“The actions the governors is taking will destroy the affordable-housing industry,” said Renee Dobos, CEO of Connecticut Housing Partners, referring to Lamont’s two-year budget proposal, which included cutbacks on state borrowing and funding for several sectors.
The proposal would cut authorizations through the State Bond Commission, which Lamont controls, by $600 million a year, straining organizations that develop and maintain housing for the homeless and those who are addicted or otherwise in need.
“It’s unclear why this industry is being targeted in such a harsh manner,” Dobbs said. “The budget proposal is not fostering the residents who live in the state when education and housing are the first items to be cut, and then add to this a whole new host of taxes, tolls and other fees that will not provide the economic growth we are all hoping for.”
For nonprofits that rely on state funding for construction and renovations of affordable housing, a drastic decline in bonded funding could halt plans for new projects.
“Not only is it sort of going forward, but it’s also going backwards some, because there are dozens of projects that are in the states pipeline that got awarded but did not get their bond authorization from the commission,” said Elizabeth Torres, Executive Director of the Women’s Institute for Housing and Economic Development.
The Women’s Institute has a project pending from a past state funding bid that may be stalled, Torres said. The Boston-based nonprofit — with an office in Hartford — is a co-developer on a Waterbury-based project converting an old mill building into 39 units of housing.
Other organizations throughout the state have echoed Torres’ concerns
“We would be significantly affected,” said Jonathan Gottlieb, vice president of Rippowam Corporation for Charter Oaks Communities in Stamford. “It’s a very significant blow to our efforts, particularly our efforts to renovate our older state sponsored developments.”
Charter Oaks Communities has been working on a multi-phased renovation of its Lawnhill Terrace development on the east side of Stamford. The first two phases are complete, while the third has received funding and is expected to start in the next two months.
The developers were planning to submit applications for funding of the final phase in April, but Gottlieb said those plans are now in jeopardy. Lawnhill Terrace provides 206 units of affordable housing in Stamford.
“We had received state bonded funds as part of the funding package for each of the first three phases, and we would not have been able to complete those phases without that funding being a part of it,” he said.
Growing housing gap
While the pool of available dollars may shrink, the demand for affordable housing continues to grow. And despite past state and federal investment, there is a gap in the supply and demand.
Last year, there were 140,531 Connecticut households deemed “extremely low income” but only 51,050 affordable rental units available in the state
More than 125,000 of Connecticut’s 450,000 renting households earn less than half the median income and spend more than half of that sum on rent, according to the Connecticut Housing Coalition, a member-based organization that advocates for the community and housing development sector.
“It’s unfortunate that too often the efforts to deal with the cost of government hurt those citizens who are the most desperate,” said Terry Wilcox, executive director of the Bridgeport Rescue Mission, which provides food, shelter, clothing, education, job training and counseling for the urban poor and addicted of Coastal Fairfield County.
The Park City nonprofit completed its purchase of the former Astoria Park Nursing Home at 725 Park Ave., which the rescue mission plans to renovate to house several services. BRM doesn’t use government fund for its projects, but Wilcox said the organization would still be affected indirectly by bond fund cuts.
“It pushes a lot more people our way.” he said. “Every time that we think that we reach our capacity for food and clothing giveaway, the demand just causes us to go further.”
In BRM’s case, Wilcox said, the organization has seen the largest number of people coming for food from its pantries in recent weeks than ever before.
All not lost
While Governor Lamont has proposed no new authorizations for the next two years, representatives from the Department of Housing pointed out in an email to Hearst Connecticut Media that there are already bond authorizations from prior years that stand to continue adding housing stock.
There are more than $300 million in active projects under construction that would add roughly 4,000 units to the state, according to Department of Housing Deputy Commissioner Shante Bank.
“We fully support Governor Lamont’s plan to put the state on a debt diet,” she said in the emailed statement.