Some devote half their income to house payments
Peter Healy, Staff Writer Stamford
September 9, 2004
Bankruptcy lawyer Elizabeth Austin was looking at condominiums in Stamford in February, intending to shorten her husband's commute to New York City, when she pulled up short of a purchase.
A real estate agent had given the couple hypothetical data that showed how a family with annual income of $120,000 might qualify for a $500,000 mortgage -- meaning, if the loan-to-value ratio was a typical 80 percent, they could afford a $625,000 home.
If you believe the old adage, "Buy as much house as you can afford," the decision is clear. But do the math, and the reality of what you can afford becomes a little bit murkier.
The monthly principal and interest payment on a hypothetical 30-year mortgage for the $625,000 home, carrying a 6 percent annual interest rate, would total $2,997.75, or just about 30 percent of the gross income.
Add in another $1,042 in real estate taxes per month on that Stamford house (at the city's average mill rate of 28.57), and at least $100 for homeowners insurance, and the tab would rise above $4,000 -- more than 40 percent of the hypothetical couple's gross income.
"When I saw the mortgage sheets, my jaw almost hit the floor," said Austin, who works for the Bridgeport office of the Pullman & Comley law firm. "We haven't seen the fallout from this yet. What will happen if the economy takes a dive? What happens if one or both spouses loses their job or gets sick?"
Austin said she and her husband have since given up looking for condos and decided to remain in their home in Trumbull.
The Austins may have thrown in the towel, but plenty of other people remain in the hunt for the area's costly housing.
Many will attempt to stretch their buying power to the limit and perhaps beyond, lured by continued low interest rates and forced by the soaring prices of homes.
Today, the nation's mortgage interest rate averages just less than 6 percent, down from about 7.5 percent in mid-1999, according to the Federal Housing Finance Board, an independent government agency that oversees the Federal Home Loan Bank system.
That low interest rate doesn't mean people making are smaller payments -- they're buying bigger, costlier houses.
In the 1950s, the typical American home was one story, with two bedrooms and one bathroom packed into 1,000 square feet. Today, the average home is two stories with more beds and baths and about 2,200 square feet of living space, according to the U.S. Census Bureau.
Buyers are digging deep to afford their big houses. The Harvard University Joint Center for Housing Studies said in its State of the Nation's Housing/2004 study that one-third of Americans spend 30 percent or more of their income on housing, and 13 percent spend more than 50 percent.
The numbers may seem scary, but there's no cause for alarm, said Bob Armbruster, president of the National Association of Mortgage Brokers. "I don't believe people are overextending themselves," he said.
Half of income
Evidence supports Armbruster's assertion. Stamford-based First County Bank, for example, has not seen a rise in delinquent loans -- even though some of its customers have mortgage payments well beyond the old Federal National Mortgage Association ("Fannie Mae") guideline of 28 percent of gross monthly income.
Fannie Mae, a congressionally chartered company, is the nation's largest supplier of home mortgage funds.
"We are approving some people in the 50 percent range," said David Zamary, senior vice president of residential lending at First County, a mutual savings bank. First County issued 1,200 home loans totaling $240 million last year.
Zamary added, however, that home owners with mortgage debt at that level often have large cash reserves, solid savings patterns and superior credit history.
If those borrowers encounter financial difficulties, they will still pay the mortgage, even if they have to work a second job, Zamary said.
First County's delinquent home loan ratio of 0.57 percent appears to back his statements. It compares with a statewide delinquency rate of 2.92 percent and a national rate of 3.94 percent as of July 31.
Banks consider a mortgage loan delinquent if payments are more than 30 days late.
No additional default
Stamford Mortgage Co., a mortgage broker, estimates that 20 percent to 25 percent of its customers pay more than 40 percent of their gross monthly income for the mortgage, said President Penn Johnson, and about half have a total debt ratio of more than 40 percent. In addition to mortgage principal, interest and real estate taxes, total debt includes expenses such as car loan payments and credit card debt.
Like Armbruster and Zamary, Johnson doesn't see a delinquency problem.
"Freddie Mac studied millions of loans and found no correlation between the borrower's debt ratio and the likelihood of default, as long as there are no other risks in the file, such as poor credit and inadequate savings," he said.
Freddie Mac is a nickname for the Federal Home Loan Mortgage Corp. The federally chartered corporation purchases residential mortgages, bundles them into securities and sells them to investors. The sales provide funds for new home buyers.
When deciding whether to grant a loan to a home buyer, banks consider factors other than debt ratio, Johnson said. These include the size of the down payment, the borrower's credit rating and cash reserves, he said.
Lenders look favorably on a down payment of 25 percent to 35 percent, a strong credit rating, cash equal six to 12 months of mortgage payments and hefty retirement accounts, Johnson said.
Wages are another component, he said, though both banks and borrowers are betting on bigger paychecks that will lessen the percentage burden of the monthly payment in years to come. As dollars inflate and income grows, the debt burden shrinks.
"A typical customer with a big debt ratio is expecting their income to be increasing over the next couple of years," Johnson said. "They could be new on the job, new out of college or have been promoted."
Bridgeport-based People's Bank also has seen a rise in the type of loans that eat up a high percentage of the borrower's income, said Christopher Dannen, vice president of residential leasing.
Dannen said People's adheres to standard income guidelines for home mortgage loans so they can easily be sold on the secondary market and free up capital for the bank to make new loans. Under these guidelines, the borrower may pay no more than 28 percent to 30 percent of his or her monthly gross income for mortgage interest, principal, real estate taxes and insurance combined.
People's prefers that mortgage borrowers have total debt -- including house payments and expenses such as credit card debt and automobile loans -- that requires no more than 36 percent to 38 percent of gross monthly income to service, Dannen said.
First County Bank looks closely at loan-to-value ratio and is more likely to approve a mortgage whose payments consume 40 percent of a household's monthly income if that ratio is low, Zamary said.
For example, if a borrower's house is worth $1 million and the bank loans $500,000 to finance it, the loan-to-value ratio is 50 percent; with an $800,000 loan, the ratio is 80 percent.
Banks consider 75 percent to 80 percent to be the maximum loan-to-value ratio on a standard mortgage loan, Dannen said. Home buyers who borrow a bigger percentage often face a stiff monthly mortgage insurance premium to cover the bank's added risk. On the $625,000 hypothetical home, the home owners would have to pay an additional $217 a month in mortgage insurance, he said.
Across the state, the average mortgage loan is $220,000. But with prices rising, many home buyers are forced to take out jumbo loans, Dannen said.
Those loans, which Carteret Mortgage Corp. says are often subject to an interest rate premium as well as additional underwriting restrictions, are available for amounts of $333,702 and up.
Piling on the debt
As their incomes and equity in their homes grew over the past few years, many people saw a new financial opportunity. They could assume added debt on top of their first mortgages -- the total sometimes more than they originally paid for their homes -- and secure it with the equity that had grown on their property.
About 7.2 million home owners took home equity lines of credit last year, up 12 percent from 2001 when 6.4 million such credit lines were established, the American Housing Survey said.
At First County Bank, about $40 million of its $240 million in home loans were home equity products, Zamary said.
Home owners use their equity credit lines, which carry interest rates of about 4 percent, to consolidate their debts, pay college tuition, buy cars or make home improvements, he said.
By putting up their home as collateral, borrowers get a favorable interest rate. Credit card companies, by comparison, charge as much as 18 percent annual interest.
Some consumer watchdogs fret that borrowing against their homes could spell disaster for many people. It can lead consumers to feel richer than they are and accumulate too much debt, said Diane Mull, regional director of community outreach for the Boston-based Consumer Credit Counseling Service of Southern New England.
"The home equity loan allows them to keep up their spending patterns rather than get their spending under control," said Mull, whose organization has offices in Stamford, Darien, Milford and East Hartford. "Forty-three percent of American families spend more than they earn each year."
Her fear harkens back to Austin's: "What happens if one or both spouses loses their job or gets sick?"
If their credit is overextended, they could lose their home to foreclosure, Mull said.
"Because they owe so much, they have bankruptcy as a major alternative," she said.
But bankers say the loans have not led to a rise in foreclosures. People's Dannen credits strict underwriting standards for keeping money away from risky borrowers.
Credit also must go to this era of steady price appreciation. Borrowers who get into trouble are able to sell the house, pay off the debt and maybe even emerge with some cash rather than losing everything in a foreclosure.
Another 'What if?'
But that scenario could crash back to reality depending on the answer to Austin's other question: "What will happen if the economy takes a dive?" or its corollary, "What happens if property values take a dive?"
The Federal Reserve's two recent quarter-point interest rate increases haven't pushed interest rates up on long-term loans, but rates on shorter-term equity products have started to climb. Further increases could put a damper on rising home values, observers say.
"As interest rates rise, the high home equity values that debtors rely on for resale might be in jeopardy," Mull said.
If the worst happens -- an actual drop in value -- Agawam, Mass.-based Cambridge Credit Counseling Corp. warns home owners that acquiring heavy debt through mortgages and home equity loans could leave them owing more than their house or condo is worth.
For example, if a family paid $1 million for a house with a down payment of $200,000, then took out a home equity loan or line of credit for $150,000, a drop in value of more than 5 percent would leave them "upside down" -- stuck paying for a house that is mortgaged for more than its fair market value.
Could that kind of depreciation happen in Fairfield County?
Johnson does not think so. Three negative trends combined to devalue home values in the early 1990s, he said: a recession, fewer tax breaks for rental property and people moving out of the area.
Today, "I don't see any signs of home prices going down," Johnson said.
But June Rosenthal, of Juner Properties residential real estate in Stamford, remembers the tough years from 1989 to 1996, when local home prices declined as much as 25 percent before recovering.
"I know a lot of people who really got hurt," Rosenthal said. "Mortgage companies were taking over houses."
Federal Reserve Chairman Alan Greenspan said two weeks ago that it's hard to know right now if there is a housing "bubble."
"House price increases have outstripped gains in income and rents in recent years," Greenspan said in a letter to Congress. "That raises the possibility that real estate prices, at least in some markets, could be out of alignment with the fundamentals, (but) that conclusion cannot be reached with any confidence."
'OK to stretch?'
Rosenthal, however, said nothing -- not even this area's solid housing market -- is certain in the post-9/11 era.
"We're not sure what's going to happen from one day to the next," she said. "You have to be more conservative in times like these."
Chris Viale, acting president and chief executive officer of Cambridge Credit Counseling, also recommends fiscal conservatism, despite the temptation to be somewhat giddy as your home increases in value.
"We have seen many people come to us with even deeper levels of debt after securing home equity loans to consolidate debt," Viale said. "These people haven't learned to manage their finances properly, so often, within a year or two of securing these loans, they have the same amount, if not more, of unsecured debt than they had before they consolidated."
"Consumers need to know that just because their monthly payments are lowered does not mean they can continue spending feverishly," Viale said.
As of late last year, about 26 million U.S. home owners carried home equity debt totaling more than $850 billion, according to Cambridge Credit Counseling. Total U.S. mortgage debt was about $8 trillion, according to McLean, Va.-based National Association of Mortgage Brokers.
So how much, in the end, should the average home owner leverage his or her resources to fit the mantra of buying as much house as you can afford?
No simple answer exists. Johnson of Stamford Mortgage said home buyers should purchase conservatively if they expect their incomes to stay fixed or go down, or if expenses such as college tuition or car loans will rise.
They can buy more costly houses or condominiums that require a bigger proportion of their income if they expect pay raises, or if a spouse is returning to the work force, he said.
the right combination," Johnson
said, "it is OK to stretch."
Richard Lee, Assistant Business
Editor, Stamford ADVOCATE
September 9, 2004
Subsidized housing means the projects.
Or does it?
Public company proxy statements, which reveal the earnings of top corporate executives, show that some of the best-paid people receive a little extra in their paychecks for taking up residence in this area.
Steven Tait, an executive vice president at Stamford-based Gartner Inc. until March 31, 2003, received $101,171 in relocation expenses after taking the job in June 2001. His 2002 salary was $300,000.
Former PanAmSat Corp. Chief Executive R. Douglas Kahn had a contract that paid him $120,500 for commuting and living expenses while the company was headquartered in Greenwich and he maintained his permanent residence in Boston. Kahn made $900,000 in salary and bonus in 1999.
Larry Zimmerman, vice president and chief financial officer of Stamford-based Xerox Corp., received $90,000 in 2002 to help pay for his relocation expenses, plus $800,000 in salary and bonuses, not including stock options.
Whether an executive is buying a home in rural New Canaan or renting an apartment in central Greenwich, housing assistance from the company means less pressure on the executive's wallet but probably some upward pressure on area prices, according to one housing economist.
"People are willing to pay more because they're subsidized to pay more," said Michael Carliner, an economist with the National Association of Home Builders in Washington, D.C.
Lower Fairfield County and the Silicon Valley of California are two regions where subsidies are seen most often, Carliner said.
Many top-rung candidates are jolted when they see bloated housing prices in this area, often causing them to turn down job opportunities. That's why corporations sometimes use relocation subsidies to attract the right man or woman, according to recruitment experts.
The strategy has been a tool used by companies for some time and is still going strong, said Tim Friar, managing director of the board of directors and chief executive officer, who practices at the Stamford office of Korn/Ferry International, an executive search firm.
"It hasn't faded away for high-value, in-demand executives. I haven't seen any slowdown at all. I'm talking about the top 10 percent of wage earners," Friar said.
In fact, Friar said, corporations are more willing to negotiate moving allowances with a candidate than in the past to get him or her in the door.
"In the recruiting process, the most demanding part comes at the end," he said. "It all can break up due to family considerations and the high cost of living."
Housing subsidies can masquerade as cost-of-living adjustments for an executive already on the payroll or can be more direct, such as mortgage differentials, which pick up part of a home buyer's interest expense and could be increasingly important as interest rates go up, Friar said.
Some companies agree to a "4-3-2-1" plan where the corporation contributes to the mortgage interest on a descending four-year program -- 4 percent in the first year falling to 1 percent in the fourth, said Dennis Taylor, a consultant with Wisconsin-based Runzheimer International, a firm specializing in living, transportation and travel costs.
"There are a lot of companies in your area doing it," said Taylor, whose firm has several clients in lower Fairfield County. "In many cases, they have to; otherwise they can't afford the mortgage."
Peg Guinta, projects director for RIS Consulting Group in Norwalk, a firm that advises companies on relocation policies, said an executive housing or relocation stipend may "pick up closing costs."
Guinta also has seen companies buy a condominium to house employees and their families who are assigned to the region temporarily; other companies may have contracts with extended-stay hotels or apartment buildings.
While major corporations provide assistance to top management candidates so that they can live comfortably, they don't offer middle-management candidates comparable packages, Friar said.
The quality of life in lower Fairfield County remains a factor in attracting top management, but for lower management candidates who do not receive the same inducement package, living in the region is difficult.
"It's almost untenable," Friar said.
Many would have difficulty -- both financial and perhaps psychological -- in buying a home here when the same house would cost one-third to half the price in other parts of the state.
"Everyone wants to live in lower Fairfield County," said Annette Fiorenza, manager of the international division at the Westport office of William Raveis Real Estate and president of the Mid-Fairfield County Association of Realtors. "It's whatever the market will bear."
An analysis by management and human resources consulting firm Towers Perrin of 363 proxy statements from 1998 to 2000 found that the average cost of the top 50 corporate relocation packages in the study was $452,168. The average cost of all of 363 relocation packages measured was $128,663.
More than half the packages of $250,000 or more went to senior executives inside organizations as opposed to new hires.
significant proportion of the largest
relocation packages were for moves to some of the most expensive
markets in the world, including the San Francisco Bay area, London,
Kong and the New York metropolitan area.
Julie Fishman-Lapin, Staff Writer
September 9, 2004
Nancy Hadden, a real estate agent with William Raveis International, says the high-end market has finally made its way to Stamford.
What convinced Hadden was her recent sale of a 12-room, five-bedroom, five-bath 6,700-square-foot house that was still under construction in the Westover section of the city. It sold for $2.2 million.
The new owners bought based on the blueprints, she said.
But it wasn't until Hadden sat down and pored over the statistics that she realized just how hot the high-end real estate market has become in Stamford.
Ten years ago, six houses costing more than $1 million were sold in Stamford. In 2003, 92 houses sold in that price range, she said.
In the $2 million range, which is the upper-end of the Stamford market, eight houses sold in 2003. So far this year, 10 multimillion-dollar homes have been sold, she said.
The high-end market has barely reached its peak, said Hadden, who works out of the William Raveis Stamford office. She specializes in working with builders, who she says are paying hundreds of thousands of dollars for land, only to tear down the existing dwellings to put up a new multimillion-dollar dream houses.
The builders, she said, wouldn't be spending that much money in Stamford if they didn't think there was a market to support it.
In Darien, the high-end market also is thriving, said Gino Kelly, whose Darien office bears his name.
"Our high-end is getting higher and higher," he said.
Several $10 million sales were made this year, and, for the first time in the town's history, a few properties are listed at $15 million.
"We've seen new high-water marks and steady activity," said Kelly, who defines high-end in Darien as $3 million and above.
A few years ago, there was some concern in Darien because high-end sales were sluggish, Kelly said. From August 2002 through August 2003, three or four sales were made of about $4 million. Then, from late September through November 2003 saw seven or eight sales in that price range. Since then, high-end sales have been steady, he said.
The spike seems to be a reaction to a better stock market, Kelly said.
"So many of our buyers work somewhere in the money business," he said. "These people had a good year last year."
"I see the high end continuing to go in a positive direction," said Bill Andruss of Sotheby's International Realty in Greenwich.
With the average sale in Greenwich reaching a little more than $2 million for the first time, Andruss said, Sotheby's defines the high-end as $5 million and above.
In August, 87 houses were listed above $5 million in Greenwich. Year-to-date, some 40 have been sold; that's one sale ahead of 2002 and one behind 2003, with four and half months to go.
"It's been a very good year, very strong," he said.
And each of the past three years had a "very substantial sale," Andruss said.
The biggest Greenwich sale in 2002 was $16 million; it was $15.5 million last year. So far this year, the priciest transaction was $15 million.
While Greenwich has the most robust high-end market in lower Fairfield County, high-end homes almost always take longer to sell, Andruss said.
"There are just not that many $10 million buyers on an annual basis," he said. "It's a longer process for a seller to achieve a sale."
But there is strong enough demand that people are bidding over high-end houses, Andruss said. In June, four buyers got into a bidding war over a home that was listed for $4.395 million. The house sold for $5 million.
"We've seen (bidding wars) in all different prices ranges. The demand is out there. All you need is two buyers," he said.
Linda Hodge, vice president of Greenwich-based Preferred Properties Inc., has seen several bidding wars over multimillion-dollar homes.
In a recent $10 million sale in which the seller had received several competitive offers, she said, the house went for more than the asking price in one weekend. Last year, she saw a similar scenario with a $5 million Belle Haven home.
The high-end market is not dissimilar to other markets, Hodge said. If buyers see value in what's available, there will be demand.
"We don't see bidding wars as frequently with the high-end, but we do see it," Kelly said. "These kind of people, this is usually not their last dollar that they're bidding."
With top prices moving above $15 million in lower Fairfield County, even the wealthy can experience sticker shock, said Hugh Halsell of Brotherhood & Higley, a New Canaan firm that handles many high-end sales.
Halsell said it's usually corporate executives transferring here from other areas of the country who are the most taken aback.
"They are told the prices are really high, but they don't know what really high is until they get here," Halsell said.
Before accepting a transfer, many come here to look around. Halsell tells of executives carrying a picture of the four-bedroom brick house on 2 acres of land back home that cost them $700,000.
"They go into cardiac arrest when they get here," he said. "In places where they are coming from, you can buy the governor's mansion for $750,000."
But people who have lived in this area for a while don't seem fazed by the prices, said Hadden, adding that she's surprised by how young some of her wealthy customers are.
"They are surprisingly savvy and they do not blink at the price," she said. "I have a young couple I am taking out. . . . They said they could look at something over $2 million as if it is nothing," she said.
Hadden said she had no problem finding a dozen properties to show them. Their possible choices will range between a "modest" $1.6 million house and something larger and better equipped for $2.3 million.
High-end buyers are looking for the all the bells and whistles, Hadden said.
They typically want a colonial-style home with at least five bedrooms. Most ask for an extra space for the nanny, as well as a bonus room over the garage.
As for the garage, space for three cars is the new minimum, she said, which can make the bonus room the size of a basketball court.
And wealthy buyers don't seem to be troubled by what the regular market frets over.
For example, interest rates, something many home owners and buyers watch closely, are not an issue for high-end buyers, Kelly said.
Many buyers on the high end don't get a mortgage -- they pay in cash, he said.
pay a visit to their personal
banker and the purchase is all part of their financial plan," Kelly
Seven years after the fact, Walter A. Twachtman is still angry.
The lawyer remembers the bitter hearings when he represented a developer who wanted to build 159 apartments for renters earning $35,000 or less near the center of Glastonbury, and the residents who decried the harm "those people" would bring to the town.
A court ruling under the state's affordable housing appeals law ordered Glastonbury to reverse its rejection of a zone change for the complex. But the effort died in 1997, when the town council paid $1.2 million to buy the land where the affordable housing was to be built.
"This is such an act - in my humble opinion - of injustice," the Glastonbury lawyer said recently. "If you listen to the town, they would say, `We did that because we wanted to preserve open space land.' Sounds good, doesn't it? They also made it impossible for us to do our project."
Across the river in Hartford, there's a different story. About four of every 10 homes in Hartford are now government-subsidized for low- and moderate-income people. In Glastonbury, it's about one in 20.
In 1989, the legislature passed an affordable housing appeals law intended to pry open the gates that affluent towns often erect against housing for working-class and poor people. But 15 years later, an analysis based on state housing and federal census data suggests the law has failed to forge significant progress:
Ten years ago, the poorest quarter of Connecticut cities and towns had about three-quarters of the state's subsidized housing, while the richest quarter had about one-twentieth, according to data collected by the state Department of Economic and Community Development. In 2003, those shares were virtually unchanged.
Between 1993 and 2003, the 20 Connecticut towns with the lowest poverty rates added a net total of 164 affordable homes. The 20 cities and towns with the highest poverty rates collectively added 7,365 affordable homes in that same period.
A few affluent towns, notably West Hartford and Norwalk, have added significant numbers of subsidized homes. But many of the state's richest and fastest-growing towns still have virtually none. More than a third of the 118 towns where household income was higher than the state median had fewer affordable homes in 2003 than in 1993.
In some cases, there are good reasons for the decline in subsidized housing totals that the state uses to measure the supply of affordable housing, officials say. When some homeowners, for example, decided to refinance government-subsidized mortgages in recent years to take advantage of lower interest rates, their properties were no longer counted as subsidized housing under the state's criteria.
The National Low Income Housing Coalition estimates, based on 2000 Census data, that more than 200,000 low- and moderate-income households in Connecticut are "severely burdened" by housing costs - spending 50 percent or more of their income on housing. Experts agree the state's affordable housing shortfall is growing worse, and business leaders, housing advocates and state housing officials say many towns need to do more.
"The affluent communities, for whatever reason, and there are a lot of good reasons and a lot of bad reasons," have not built as much affordable housing, said Michael Regan, an official with the state community development agency. "Some of it is because of fear. Some of it is because of prejudice. Some of it is because of a decision not to change the rural character of their communities."
The basic principle behind the 1989 affordable housing law was that in towns with little affordable housing - less than 10 percent of housing stock - developers could ask courts to override local zoning to build affordable housing. One goal was to create neighborhoods and communities with a more diverse mix of working-class, middle-class and wealthy people, instead of having separate enclaves of rich and poor, white and minority.
No Local Control
Since the affordable housing appeals law was passed in 1989, the General Assembly has modified it three times. Housing advocates say the law should be stronger, but they are afraid to reopen a debate in the legislature because the law has so many enemies.
Critics say the law is the wrong approach because it tramples on local control, emphasizes punishment over encouragement and allows developers to decide where housing should be built with no direction from local zoning officials.
In Glastonbury, town officials say the proposed affordable housing site was a poor location, in part because of concerns about flooding from the nearby Connecticut River. The town had been interested in buying the land for recreation since the 1980s, said Kurt P. Cavanaugh, a member of the town council. "I just don't think it was a decent proposal for decent housing," he said.
Noting the "hostile emotional undertones" in the town's legal documents and in public hearings on the housing project, a Superior Court judge rejected all 10 reasons the town gave for blocking the project and ordered Glastonbury to allow a zone change for the homes. Instead, the town bought the land.
The affordable housing appeals law is one of the few state statutes that permit an outside power - in this case, the courts - to trump a local government's decisions over how its land is developed.
"The law has been made a bit better with reforms that have been enacted over the past several sessions," said one critic, state Rep. T.R. Rowe, R-Trumbull. "But the underlying law remains that local control of zoning is not always going to remain local as long as this so-called affordable housing appeals act is still out there."
Rowe said the affordable housing developments built in Trumbull as a result of the law have put more stress on taxpayers.
"The developments tend to have children, and children are great. But the fiscal reality is that our schools have grown considerably. We've had to build a new school in part because of our increasing population. We would have had to have built it eventually, but that [affordable housing] sped that along. When you increase your population unnaturally, your emergency services are taxed, your fire department needs more volunteers. ... Your police department has more areas to patrol. There's more streets to pave and plow."
One reason the law hasn't opened rich towns to more moderate-priced housing is that the legislature's changes made it tougher for developers to use it, said Terry J. Tondro, a University of Connecticut law professor who was co-chairman of the legislative commission that proposed the law. He said the legislature changed the law's emphasis from housing for the working class to housing for low-income people, inflaming local opposition even more.
"The towns fought this thing so energetically that it really made it very difficult to get things done," Tondro said. "I think we need to worry - and I don't see the state worried very much about it - about this growing segregation of rich and poor."
Other advocates say the state is financing less affordable housing overall. The problem, they say, lies in the large drop in state money available to build affordable housing since the early 1990s, and in the decision to fold the state's independent housing department into a larger department whose main mission is economic development, the Department of Economic and Community Development.
State officials counter that federal money has covered much of the state shortfall and that about $450 million in federal, state and private money has been spent on affordable housing over the past five years. By packaging money from multiple sources, "we're doing more with less," Regan said. But even they acknowledge a significant shortfall of quality affordable housing in some parts of the state.
"The state has really withdrawn from its commitment to affordable housing," said Jeffrey Freiser, executive director of the Connecticut Housing Coalition.
Reward, Not Punishment
Increasingly, in states such as New Jersey and Massachusetts, with similar traditions of strong local government and a wide disparity between rich and poor communities, the issue of affordable housing is being linked to statewide policies intended to fight sprawl and boost economic growth.
Connecticut business leaders say this state, like its neighbors, needs to move away from the punitive approach under the 1989 law. Instead of punishing towns that don't build affordable housing, they say, the state should reward towns that build it.
"The old fight [over affordable housing], the moral issue - it's old, it's tiresome, it doesn't work," said Joseph McGee, the former state commissioner of economic development who is a vice president of the Southwestern Area Commerce & Industry Association of Connecticut. "Smart communities build good neighborhoods with a range of housing and good schools. And the role of the state should be to [encourage] that."
He said Connecticut could follow the example of Massachusetts, where legislation passed last year provides state grants to towns that create zoning districts for affordable housing, and additional grants if that housing is built.
The measure also aims to combat sprawl and boost mass transit by encouraging towns to build near developed areas and close to transit. Massachusetts leaders are considering a plan to reimburse towns for the education costs of children who live in that housing.
During the first 10 years after Connecticut's appeals law was passed, state courts overrode local zoning 27 times, ordering local governments to allow affordable housing developments. But, as with the housing proposed in Glastonbury, not all of it was actually built. As of 2000, 384 affordable units had been built or were under construction as a result of those court actions, according to the Office of Legislative Research.
Advocates say the law indirectly has created many more affordable homes, by encouraging towns to approve affordable housing they would have rejected, but for the threat of court action. Some estimate that the law has produced as many as 3,000 affordable units - about 2 percent of the state's current total - since it was passed.
The Flagg Road Cooperative in West Hartford is one housing complex that got built as a result of the law.
The 10-home complex was completed in 1995 by a nonprofit developer, following a court battle with the town. Nancy Geissler, 56, has lived here since the beginning. She never wants to leave.
A decade ago, Geissler had lost her mobility, her career and her Los Angeles home after losing a leg to diabetes. Having moved back to Connecticut to be closer to family, she was paying two-thirds of her $13,000 income from Social Security for rent in Vernon. She lived under an electric blanket because she couldn't afford to heat her apartment above 55 degrees and she subsisted on 10-cent packets of ramen noodles.
"I never thought I'd live in a place this nice again," she said, speaking on a warm fall afternoon in the tree-shaded courtyard of the three-building complex, as school buses dropped off neighborhood children.
The co-op's buildings are immaculate. The grass is neatly clipped. Residents' housing costs are 30 percent of their income, under a form of ownership in which residents have the rights and responsibilities of ownership, but do not keep the equity from increasing property values.
Residents include an assistant parking lot manager, a nurse's aide and a Home Depot warehouse worker. There are black, Latino and white residents. They split the responsibility for maintenance. There's even a commonly owned pet, a stray cat who wandered in and was adopted by the co-op's children, who named the cat Oreo and helped build her a tiny wooden house of her own.
"We're like a little village," Geissler said. "We're dependent on one another to get things done."
Half of the 10 original families still live here. Everyone who moved was able to save enough money while living here to buy their first homes, said Geissler, who heads the co-op board.
It's not perfect, Geissler said. While living here comes with the headaches of ownership, residents don't get the corresponding benefits of rising property values most homeowners get. And Geissler said she's not sure the model would work for complexes much larger than hers.
Geissler doesn't believe the acrimony many towns feel toward affordable housing is gone. When the complex wanted to add six parking spaces recently, the town council rejected its request.
"It's not economic at all," she said of wealthier towns' opposition to affordable housing. "It's totally fear. They don't want mixed neighborhoods. It's like having a prison. If you asked people, would they rather live next to a prison or affordable housing, they'd probably say a prison."
Fiscal inequities among Connecticut's cities and towns and an overreliance on local property taxes to pay for municipal services have combined to create "tremendous pressure" on most communities to expand their tax bases by attracting new development. And the most common and damaging approach to development is "fiscal zoning" that allows the raising of local revenue to become the dominant issue, over-shadowing land suitability and regional needs as considerations. These two related conclusions were central to the message that Myron Orfield brought to the economic summit meeting last week in Bridgeport.
From his experience as regional planner, Midwestern state legislator and lawyer, Orfield has made the argument that this pattern of development has had negative results throughout the state. One of these results is that communities are forced to engage in a struggle against each other for the most lucrative development, according to a regional agenda report Orfield has co-authored.
The report claims that the competition to add the most lucrative, as opposed to the most appropriate development projects, has created a "self-reinforcing cycle of decline" in the communities that lose "early in the game." Those communities then face the unenviable choice of raising burdensome taxes to provide public services that keep pace with their more successful competitors, or providing reduced and low quality services that allow taxes to remain competitive with the other municipalities, according to the report. "Older communities in Connecticut's urban cores are doubly hurt by these trends," the report states.
That is because these communities, the report maintains, have to deal with "aging infrastructure, industrial pollution, concentrations of poverty, higher crime rates and other factors that strain their limited resources." Bridgeport has dealt with this issue for years, turning at times to problematic development projects like casino gambling that provoke opposition in the region. But the report contends that "stressed" and "at risk" communities near the urban cores are also losing, in spite of their growth.
The report claims that these communities tend to rush into development without adequate long-term planning, frequently resulting in more moderately priced single-family housing that ends up costing more in schools, roads and sewers than it produces in new revenue. At the same time, "fiscal zoning" allows affluent communities like Westport to "reap fiscal benefits" by severely limiting residential land-use to large lots and more expensive homes, thereby "effectively excluding low and moderate income people from their border," in the words of the report.
But affluent communities that want to attract commercial development are also hurt in this process, according to the report, by the resulting lack of an adequate workforce in residence. The picture drawn by Orfield in his address before the summit meeting and in his March 2003 report, Connecticut Metropatterns, is that of a state badly in need of regional and statewide revenue raising and land-use planning for long-term development.
The Greenwich Housing Authority hopes to build a pair of two-family duplexes on adjacent lots on Hollow Wood Lane in Pemberwick. Each Cape Cod-style duplex would be 2,046 square feet and have two units containing three bedrooms. The units, on the Byram River, will be offered for sale to those meeting affordable-housing income levels. Housing authority officials will present revised plans for affordable-housing units at 14 Hollow Wood Lane to the Architectural Review Committee at a meeting in Town Hall at 7:30 p.m. tonight.
The committee had recommended a handful of aesthetic improvements to the modular houses following the authority's initial presentation on June 2. The houses appeared to be resting on stilts, the committee said, with disproportionately small front windows, and the backs of the houses were "monotonous."
"Some of the conditions they asked for were impossible. That particular site is in the 100-year flood plain, so any house has to have the first floor above flood levels," said housing authority board member George Yankowich, a local builder and developer. "The houses look like they're up on stilts and they wanted to eliminate that, but technically it's not possible."
said the housing authority
added lattice work, garage doors, shutters and covered porches, among
changes, to satisfy the committee's recommendations.
The housing authority received final site-plan approval for the project from the Planning and Zoning Commission last month, and with a go-ahead from the Architectural Review Committee, can submit its plans to the Building Department for approval -- the last major step before construction can begin.
The housing authority received a $420,000 check for the project from the U.S. Department of Housing and Urban Development three months ago, in the form of a Community Development Block Grant. Designed to help low- to moderate-income residents, most block grants provide housing or improve economic opportunities, and must be spent within a calendar year.
Housing Authority Director
George Howell said he is eager to obtain a building permit and demolish
a bungalow now on the property, but confident that
construction will proceed steadily once begun. "We have to have expended the dollars by the end of the year and I have no reason to believe that that won't happen," said Howell. "We're now poised to move swiftly."
Housing officials have said the project will cost about $1.2 million. Though the grant will allow the housing authority to offer the three-bedroom condos at a lower price, enabling lower-income families to qualify for a mortgage, it is far too soon to guess how much each unit will cost or to solicit applications from potential residents, said Terry Mardula, deputy director of the housing authority. Applicants must meet certain income levels to qualify as buyers, Mardula said. As three-bedroom affordable units are currently defined, Mardula said, four-person families must earn $60,320 or less, five-person families $65,146, and six-person families $69,971.
more than 80 units the housing
authority has added in the past 15 years were already built when the
acquired them, said former board chair
McClenachan. The last time the housing authority built a home from the
ground up was in 1988, Mardula said, when it built 21 family units at
Commonly called a housing "mandate," the statutory provision actually does not require municipalities to build or cause to have built a single unit of affordable housing. But it does provide developers the opportunity for fast track court appeal when they are denied permits by municipal land-use approval bodies for projects that include an affordable component as a set-aside from the balance of the units in the project that are priced for the market.
The statute also places the burden of proof in such appeals on the municipality to prove that the denial was based on a legitimate exercise of its state-delegated power to adopt regulations that protect health, safety, and general welfare, under the so-called "police powers" that are reserved to the states under the U.S. Constitution. Those cities and towns that meet the state's definition of affordability at the 10 percent level are exempt from the fast track appeal, and those that are making progress toward that goal might obtain a three-year moratorium from the measure.
And therein lies the problem. The state standard for defining affordability is local area or state median income level, whichever is lower. The recently released report of the committee for Westport Workforce/Senior Housing (WFSH) estimated that the qualifying income level for a family of two would top off at $66,000 under the state statute.
But the committee's goal for Westport by the year 2013 is that 10 percent of its housing be affordable for families earning up to $100,000, an income level that would be too high for the town to qualify for an exemption from the state statute. Opponents of the state initiative in Fairfield County towns have argued that the statute was nothing more than a zoning-busting measure, designed to circumvent large-lot low density housing in the interest of the real estate industry.
Proponents, on the other hand, have countered with the argument that the measure was designed to release the housing market from artificial restrictions on development that have created exclusionary price levels, especially in affluent suburban communities. Somewhere between the two poles of the debate, conservationists and smart-growth advocates have entered in the last 10 years to make the case with increasing success for open-space and community preservation initiatives that sometimes compete with the goal of developing affordable housing.
The result has been a spotty record of accomplishment for the state affordable housing initiative with only modest gains throughout the state. Urban centers are usually in compliance with the statute because of their low and moderate income public housing, but only a fraction of Connecticut's towns meet the state's 10 percent test. Only 2.4 percent of Westport housing, according to estimates, would qualify, and that percentage for the most part is made-up of housing developed and maintained by the Westport Housing Authority.
Current set-aside rules do not make it easy for developers to use the statute to gain an advantage over local zoning limitations, especially in high land-cost towns like Westport. The affordable component must be at least one-third of the total units in the project, and half of those must be affordable for households below 60 percent of the applicable median income and the other half 80 percent.
Developers typically must also establish deed restrictions on these properties that limit their sale price to an affordable level for 40 years.
A study commissioned by the city two years ago found that Stamford has about 4,600 affordable housing units, putting it ahead of neighboring municipalities. But the report also found that Stamford needed as many as 8,000 more affordable units. The new guidelines can't fill that need, Principal Planner Norman Cole said. The rules seek to include a few affordable units in each market-rate development. So results would have to wait for private firms to build new projects in a city that is increasingly built up.
"We would be very lucky if we could do 100 affordable units a year," Cole said. But the new rules have advantages over developments by agencies that build exclusively affordable units. "The nice thing for us is that it is free of public subsidy," Cole said. In exchange, private developers would get to add a few more units than they would under existing zoning. This "bonus density" would help offset the cost of building the moderate-income units, city officials said.
The city decided it had to do something to encourage affordable housing, in part because the state and federal governments have pulled back from supporting such developments in recent years. Although a state budget has not been finalized, early drafts called for the reduction of Connecticut Housing Finance Authority funds. Meanwhile, the U.S. Department of Housing and Urban Development has prepared to cut Hope VI funding in future years. Both programs have significantly contributed to Stamford's affordable housing in the past.
It is also important to enact the affordable housing regulations now because many city affordable housing projects are reaching an age when they will no longer be required to remain affordable, Cole said. When HUD or another governmental agency funds a project, the housing must remain affordable for a set length of time. After that, the units could be sold at market rate. Many city projects will reach that age within the next few years, Cole said.
The city's three multifamily development zones likely would be most affected by the new regulations and would provide the most new affordable units, Cole said. Some zones already have an affordable requirement, while others are likely to experience little housing growth, he said. "It was definitely one of the things that we strongly recommended," said Alan Mallach, a New Jersey housing consultant who wrote the 2001 report for the city. "There is a lot of experience in other communities (showing) that you can create affordable housing" with such regulations, Mallach said.
Years ago, the myth circulated that friction arose when residents of different income levels lived in the same developments, Mallach said. That has since been disproved, especially when the number of affordable units remains low, he said. Stamford's first experience with so-called "inclusionary zoning" would support that, said Ben Barnes, director of public safety, health and welfare for Stamford.
He watches over the administration of the affordable units in Avalon at Greyrock Place, a downtown development on Forest Street completed in 2001. Of the 306 apartments in the building, 38 are affordable, meaning that their occupants earn less than half the area's median income of about $111,000. "How it has worked there has been great," Barnes said. The city had to address cases in which a resident's income rises above the eligibility threshold while they are living in an affordable unit.
At Avalon at Greyrock Place, residents are not forced to leave unless their incomes rise above 60 percent. If they are still below 80 percent of the median income, residents have a year to find a new home. But if their income jumps to more than 80 percent, they must move in 90 days, Barnes said. The Zoning Board is working on similar measures in the rules they are drafting.
Having some sort of provision is important because some affordable income buildings in the city merely charge a small penalty if a resident's income rises above the eligibility level, Barnes said. That means some of the city's affordable units are occupied by residents earning $100,000 a year or more. The Zoning Board is likely to include an escape provision under which it can allow a developer to provide affordable units in a unique way that they devise, Cole said. For instance, when the planned 59-house cluster development to be called Piper's Hill is built off Long Ridge Road, four existing wooden frame houses on the property will be sold below market rate to city employees, probably teachers, said William Hennessey, an attorney for developer Piper's Three LLC.
"Rather than destroy or move the houses, why don't we keep them and leverage them to create more affordable housing?" Hennessey asked. The money the teachers pay for the houses, probably about $300,000 to $350,000 apiece, probably will go to one of the nonprofit affordable housing organizations in Stamford, Hennessey said. "That will a serve the purpose of providing housing for a segment of the community that needs housing, and create a pool of funds through their purchase of the property which can be used as equity for a nonprofit developer," Hennessey said.
The Zoning Board is expected to finalize the new standards for affordable housing in the next week or two.
"Certainly, Stamford is a leader not only in the state but in the country as far as I'm aware in promoting affordable housing," said Richard Redniss, president of engineering and planning firm Redniss and Mead, and a member of the state's Blue Ribbon Commission to Study Affordable Housing. The number of housing projects completed or in the process of approval in Stamford in the past 10 years is significant, officials said, ranging from the renovation of 330 units at Southfield Village, which will be 70 percent affordable, to the Park Square West complex, which will contain 20 percent affordable units, aimed at families with incomes of 50 percent of the area's median income to the Avalon at Greyrock Place complex, which contains 38 units below market rate.
Spurring that growth is the city's effective use of zoning regulations that require affordable units to be included in development projects and incentives for developers. "I think what we've done well is take a formalized approach by having both requirements and incentives," said Mayor Dannel Malloy. Inclusionary zoning is not a new idea, having been around for close to 15 years in Stamford and Norwalk, but only recently are communities fully recognizing its potential.
"It is one of the most powerful tools available for communities to create affordable housing," said Alan Mallach, a housing and land use consultant who teaches urban planning at Rutgers University to a panel convened by Norwalk Mayor Alex Knopp last fall. Although inclusionary zoning has been around for some time, Stamford has only recently tied in incentives for developers, an evolution that came from some early missteps during Malloy's tenure. "We let some things get out the barn door before we closed it," Malloy said. Developers now receive density bonuses and tax abatements for adhering to affordable housing requirements. It came as a surprise to Malloy early on that so many people in the area were looking for places to live. "I don't think we anticipated the pent-up demand for housing," Malloy said.
When Malloy confronted the problem he realized that the city would need to combine public and private funding for an effective solution that would not burden taxpayers. A prime example of public and private partnerships is the renovation of the Rippowam Park Apartments. By the mid 1990s, the site of the Rippowam Park Apartments was in a spiral of disrepair, according to Malloy. One quarter of the units were legally uninhabitable and health code violations were rampant among the rest of the 430 units. Lead abatement was needed and 53 leaking oil tanks needed to be removed. The State of Connecticut awarded Stamford $6.6 million to replace heating systems, but provided no funds for additional renovations, without which the units would remain dilapidated, Malloy said.
to a private affordable housing developer. The resulting proposal,
leveraged the state's $6.6 million grant to obtain additional capital,
led to the privatization, rehabilitation and transformation of the
The state, city, private developers, several nonprofit organizations,
members of the community joined forces to successfully complete a
that none had sufficient resources to accomplish alone. The state
enabled the project's privatization legislatively. The state's
Department of Economic and Community Development provided direct funding, and authorized tax exempt bonding and low income housing tax credits. Stamford abated taxes to assist rent reductions.
The developer contributed its own capital and raised additional debt and equity from public and private corporations to complete the project. The developer donated space in the on-site community center to a local nonprofit day care provider, thereby benefiting tenant children. The Housing Authority, responsible for co-monitoring operations, issued bonds in order to finance development. Units were gut remodeled, an on site day care center refurbished, and new landscaping and play areas were added. The project was completed in 1998 and currently houses about 1,500 residents. No public housing tenant was permanently displaced during the conversion and no rents were increased. No tenant's income exceeds 60 percent of the area median income, and half are below 50 percent of the area median income.
The successful redevelopment led to the formation of the city's Task Force on Affordable Housing, which issued a report in September 2001 and the passing of the city ordinance that requires developers to replace any affordable housing units that are removed from the current stock on a one to one basis. Of course, for all of the successes, there is criticism that the city can be doing more and should stop leaning on private developers such as Avalon Bay communities to provide affordable housing units.
"Avalon is not my idea of affordable," said Michael Hyman, president of the Stamford chapter of the NAACP during a February interview. Market rate rents at Avalon properties can reach over $3,000 per month for a three bedroom apartment, meaning that even the units set aside for below market rates are out of reach of many lower to middle income families, Hyman said. But ultimately the forces of supply and demand drive the pricing in lower Fairfield County, officials said, and Avalon Bay should not be criticized for having those lofty rents.
In this area, when the economy was strong, demand was far outweighing supply, Redniss said, and anyone with an attic could get someone to pay thousands in rent. "There was always someone who was ready to step in," Redniss said. By adding high quality units to the supply side, Redniss said, Avalon has "raised the bar for what you had to do for the consumer" and helped ease the demand. "We're starting to see rents roll back by as much as a 25 percent net reduction," Redniss said, adding that the weakened job market is contributing to that rollback.
The cost of
land in the area makes it virtually impossible to build housing that
result in rents in the low hundreds, Malloy said, and the Avalons of
world are affordable for many of the residents in the area. "Can
you get an apartment for a couple of hundred bucks a month? No,"
Malloy said. "But can you get a $1,400 apartment for $800? Yes."
Workers struggle with rent
By A.J. O'CONNELL - Hour Staff Writer (Wednesday, May 7, 2003)
NORWALK -- In the past five years, it's become increasingly difficult for employees in lower Fairfield County to find housing in the communities where they work. In Norwalk, for example, local companies and municipal agencies say that large percentages of their work force commute from other communities. Electronics manufacturer Northrop Grumman, Norden Systems, reports that only about 12 percent of the company's engineers and manufacturing workers live in the city. The rest of the work force commutes, with some coming from as far away as Long Island and New Jersey, said Frances DiMeglio, Norden spokeswoman.
"I'm concerned every day that these people may find employment closer to home and may take those opportunities," said Ivory Tucker, chief executive at Norden Systems, who said that he has an "aging work force" and needs to hire more younger employees. But, Tucker said, finding young engineers and manufacturers who are willing to come to the area has proven difficult. "One of the things that happens, especially with new graduates, is that getting them to come to the area (is harder) because of the high cost of living and the lack of available housing," Tucker said.
Slightly more Norwalk Hospital employees live in the city, with about 39 percent of the work force residing in Norwalk, said Mike Dimenstein, the hospital's human resources director. That number includes 57 residents, who live in hospital-owned apartments, but the figure also includes 122 registered nurses, 59 housekeeping aides, 54 patient care technicians, nine X-ray technicians, seven pharmacists, four doctors and several other groups of workers, such as secretaries and engineers.
of those employees, Dimenstein said, are between the ages of 41 and 50,
and probably purchased their homes several years ago. Having an aging
force in a community as a result of a lack of affordable housing is a
that Fairfield County needs to work on, said Joe McGee of SACIA, the
Southwestern Connecticut. "If you can't get young people to work in these companies, you lose your vitality," McGee said. Young workers who do not earn enough to live near their workplaces are only one group that has been displaced by the lack of affordable units, said McGee, who is an advocate for affordable housing in Fairfield County.
Many middle-class families who work in local businesses have also been displaced. "It's strictly labor force," McGee said. "We feel very strongly that there needs to be affordable housing for all income levels." The story in the Norwalk school system is a bit different, with an even split between employees who live in Norwalk and those who commute, said Human Resources Director Fay Ruotolo. However, those who commute and those who live close by break into distinct categories. About 80 percent of the district's secretaries and aides, 72 percent of the district's custodians, and 49 percent of the district's nurses live in the district.
Ruotolo, however, the district's secretaries, aides and nurses often
people who already live in the city, want a second income and want to
the same hours that their children are in school. A smaller percentage
of the higher-paid employees live in the city. About 30 percent of the
principals and 38 percent of teachers
live in district. The rest, including Superintendent Salvatore Corda, who lives in New York, commute. Like Corda, many people who fight the traffic to come to work in
Norwalk drive in from New York communities. Many come from cities and towns in northern Connecticut. Some come from as far away as the Naugatuck River Valley; numerous others come from the Fairfield-Bridgeport area. "Bridgeport is actually developing as a major housing area for the work force," McGee said.
However, the need to commute from city to city is part of the reason that Fairfield County sees such heavy traffic on the highways. Joan Carty, executive director of the Housing Development Fund in Stamford, said that she was not surprised that some people are willing to battle traffic and spend three hours on the road rather than live in the community in which they work. "This is a good job market," she said. The housing market, however, is a different story. Carty's agency helps people to locate affordable housing within Fairfield County. She said that finding housing for her clients has become substantially more difficult in the last few years.
to be addressed now," said McGee.
Name key for housing change
Hour Staff Report (Tuesday, May 6, 2003)
NORWALK -- The Norwalk Common Council has made increasing the city's stock of affordable housing a priority, and recently relabeled their initiative as an effort to provide more "housing for working families." Why the name change? One reason is that segments of the community other than impoverished individuals -- teachers, police
officers, firefighters, nurses and other service workers -- are in desperate need of affordable homes. And with the term "affordable housing" meaning so many things to so many people, the council's specific choice of language helps to better define the parameters of its mission.
"We thought that housing for working families was something the council could tackle more easily than the housing crisis overall," said Council President Matthew Miklave, D-District A. "When I was growing up, our parents' goal was to build a community and maintain a community where their children could live if they so chose. In order to do that, you have to have lots of housing choices for people so they can elect to stay in the community where they grew up." As Chamber of Commerce President Edward Musante explains it: "Our members are very upset there's not enough housing for their workers." Joseph McGee, vice president of public policy and programs for the Business Council of Southwestern Connecticut (SACIA), agrees.
you don't provide a vibrant range
of housing options for people, you'll lose your labor force and
competitiveness," he said. "We're not talking about public
said Common Councilwoman Barbara Hudgins, D-at large. "People are so
about the word 'affordable' that Matt wanted to find a different
It's not what in the past have been called 'projects.' And it is not
needs housing for disabled people or mentally ill people or halfway
As much as the council is trying to define what its initiative is not,
in order to pare down its goals to a more manageable level, "housing
working families" is also politically a much more acceptable choice of
words for a group of 15 Democrats facing re-election in November.
acknowledges that the label "housing for working families" was a
public relations move because the term "affordable housing" not only
confusion but has also been "demonized over the years." "As soon as
about it, some people stop listening," Miklave said. "If you talk about an affordable housing project, people would say 'no, no, no.' But if you say you want to make it easier for cops, firefighters and teachers to live in the community they serve, a lot of people would say 'yeah.'"
study by the Chamber of Commerce
of the area's affordable housing needs that was released in March 2002
stated that one priority should be the promotion of a positive image of
affordable housing "to dispel the inaccurate image ... that currently
The need for an image change originates, according to McGee, with what
he refers to as public housing being "a social disaster." "Public housing is in disrepute, and affordable housing in the public mind is linked to public housing," McGee said. "Public housing in the form of heavily dense family projects has been declared to be a national failure by liberals, conservatives, Democrats and Republicans."
Today, when municipalities and developers talk about providing affordable housing, it is in the form of communities composed of mixed-income residents. For example, a brainstorming forum held last year in Norwalk on the revitalization of Wall Street had several speakers discussing the practical need to build apartment units or condominiums for individuals who will spend money in the area, as well as those who will work in the boutiques and restaurants. That means, for example, including some units with subsidized rents in regular, market-rate developments but also finding creative ways to decrease building costs for developers so they can pass the savings onto their tenants.
As stated in the Norwalk Chamber's report, "housing has been demonstrated to provide the critical mass and 24-hour activity to make such redevelopment projects (like that planned for Wall Street) viable in the long-term." And mixing tenants in well-kept developments gives all involved a sense of pride, McGee said, which keeps the buildings nice, units occupied and landlords happy. "Everyone said it wouldn't work, but guess what? It's a home run," he said. Even among members of a supposedly pro-affordable housing Common Council, there appears to have been a misconception of what such developments look like. Councilwoman Barbara Hudgins, D-at large, recalled a bus tour she and her peers took of various affordably priced housing communities in Norwalk.
of the comments I heard here
and there was 'hey, you can't tell the difference,'" Hudgins recalled.
"What that means is they were expecting the places to look less
less attractive. And these were knowledgeable people." If anyone
the stigma attached to the concept of affordable housing, it is Curtis
director of the Norwalk Housing Authority, which operates several low-income, densely populated housing developments in the city. Law and others say the problem in a city of just 82,000 like Norwalk, as well as in the surrounding suburbs, is that people apply the images of larger cities' projects -- New York City for example -- to local affordable housing proposals.
"There are misconceptions shaped in large part by the horror stories of public housing across the country," Law said. "For example, the notion that drugs begin and end in low income housing is certainly a misconception." Law insists that the authority's tenants -- "many of our clients are unemployed, underemployed or elderly, and on public assistance" -- care about where they live and have aspirations to improve their lives and those of their loved ones. But there is certainly truth to the idea that housing projects create work for law enforcement officials. Norwalk Police Chief Harry Rilling said that, unfortunately, public housing complexes "become hangouts for people (like drug dealers) who want to 'ply their trade.'"
arrested people from out of
town, and I'm not going to say we haven't arrested residents because we
have," Rilling said. "You've got a lot of people who fall in the
of being disadvantaged or disenfranchised. I don't know whose wisdom it
was to put all the disadvantaged people who don't have a level playing
field in one area.
That just creates problems." But, like Law, Rilling emphasizes that his department has found that "the vast majority" of residents of the Housing Authority's developments "are good, decent, hardworking people who are very happy to work with the police. They want a good quality of life and want their property to be crime free." Patsy Selew, executive director of the Westport Housing Authority, said the same holds true for her tenants. "Everyone watches out for each other in our housing complexes,"
Selew said. But she said that because of the perceptions of public housing, the reaction to proposals to build more affordable housing is often "not in my backyard." She said some opponents will talk about how the "dregs of society" are brought into the complexes.
That is exactly why the Norwalk Common Council's choosing the label "housing for working families" is such a safe bet, said McGee. Rather than conjuring up stereotypical visions in the minds of constituents and traditional public housing opponents, McGee said the message is "these are your sons and daughters." And, Musante acknowledges, that specifically the word "working" will probably go over well with some segments of the community that have a perception of those who live in affordable housing as lazy individuals living off of handouts and on the backs of taxpayers.
"I think people generally like to have their money help people who are helping themselves," he said. Musante added that the general public also sees "there have been a lot of assistance programs toward low-income housing." Hudgins agrees that, from her perspective, there is a lot of housing for senior citizens and those with "special needs." "But there's very little for just plain working people," she said. Although understanding why the Norwalk Common Council is choosing to focus on housing for working families, some, including council members themselves, wonder if the term is perhaps too limiting.
Rodin, a housing advocate
in Norwalk, asked: "By phrasing it that way, are they precluding city
for other groups of people?" "If you call it housing for working
families, have you not trapped yourself into the bind that is the only
thing you can be doing?" Rodin continued. "What about families who are
not working and single
individuals?" Musante, who served for several years as Norwalk's director of redevelopment, agrees it is a complicated issue, but the bottom line is every little bit of new housing helps, no matter how it is defined.
"If the council can use the term 'housing for working families' and make some units affordable, that's what counts," Musante said. Please share your thoughts about affordable housing by e-mail to email@example.com, regular mail to Jim Dean, The Hour, 346 Main Ave., Norwalk CT 06851 or by fax to 840-1802.
— The fate of AvalonBay’s
proposed 284-unit complex at Wolf Harbor and Wheelers Farms roads is
in the hands of the city, following a Supreme Court ruling Wednesday
denied the developer’s request for sewer service.
The court denied the Wilton-based affordable housing giant...
And an earlier
article, from another CT area...
Saturday, January 19, 2002 - 6:46:54 AM MST
Officials expect housing to come
By FRANK JULIANO - firstname.lastname@example.org
MILFORD -- City officials for the first time have conceded that a Wilton developer will get to build a controversial apartment complex on Wheeler's Farms Road, despite their vigorous opposition.
"Someday, somehow, that thing is going in," state Sen. Winthrop Smith told about 50 elderly residents at the Milford Senior Center Friday. "It may take five years, but that state law was written for them, and when they go to court, they are going to win," Smith conceded.
Mayor James L. Richetelli Jr., who also attended the center's annual legislative breakfast, agreed that the state's Affordable Housing Act, which supersedes local zoning regulations, presents an almost insurmountable obstacle to municipalities trying to keep dense development out. AvalonBay Communities Inc. is proposing to build 284 apartments on 43 acres at the corner of Wolf Harbor and Wheeler's Farms Road, setting aside 25 percent of the units for families earning less than Milford's median income, pegged by federal officials at $60,000 for a family of four.
Inland Wetlands Agency approved
the project Wednesday with conditions that reduce the number of
to 228. The Planning and Zoning Board will conclude
its public hearing on the proposal Tuesday night, 7 p.m. in City Hall. "It is my position that we'll do everything we can to keep AvalonBay from coming in," Richetelli said. "But they are a national company with tons of money and they keep coming after you."
spokesman Lee Feldman said
Friday the company would rather work with local officials to see that
are applied fairly, rather than win a lengthy court
battle. "This company has made a legitimate, good-faith effort to address all the issues in Milford," he said. Alderman Gayle Slossberg, D-1 and the board's minority leader, said she is disappointed that other elected officials are apparently capitulating. "I am going to stand with my neighbors and fight for what's right," she said. "I don't
care how big AvalonBay is, this is bad for the city." Slossberg represents the area where the development is planned. Some of her neighbors agreed Friday.
retired and living on Social
Security, and I'm not eligible for one of these so-called affordable'
said senior Ginger Burrows. Rent for the apartments is
expected to range from $900 to $1,400. "I'd like to know who is eligible for one of these things?"
Kay Mongillo, a resident of Fresh Meadow Lane, near the AvalonBay site, asked why sewers were being laid to accommodate the apartment complex while homeowners on her street have to wait. Smith said sewers are actually the key to large developments such as the ones AvalonBay builds. "I'd encourage the city to scale back or stop its sewer plan," the state senator said. "We've seen it in Stratford, Orange and Trumbull. As soon as you put in sewers, you drive the value of the land up and you open it to development. So be careful what you wish for," Smith told Mongillo.
Juliano, Milford bureau chief,
can be reached at 878-2130.