Connecticut’s Affordable Housing Dilemma: How to Build More with Less

The Connecticut Housing Finance Authority (CHFA) has had lower levels of productivity in developing multifamily affordable housing in recent years relative to neighboring states. The primary objective of the Capstone was to identify reasons for this being so, and to explore policies and QAP guidelines to assess possible inefficiencies or missed opportunities. More specifically, the Capstone team examined Connecticut’s current scoring requirement for the 9% Low-Income Housing Tax Credit (LIHTC). LIHTC is a policy tool employed by the federal government to encourage low-income housing development and rehabilitation. It is a highly competitive process, however, Connecticut does not fare as well in the number of applications relative to comparable states, such as New York, New Jersey and Massachusetts.

They also explored Connecticut’s top three developers, who have accounted for 50% of the LIHTC credit distributed since 2013. The team found that the CT CHFA’s QAP scoring criteria to award 15% of its 9% LIHTC points to development in “Opportunity areas” serves as a hindrance, given that most projects do not occur within these zones.  The Capstone team conducted interviews with developers, syndicators and HFA’s to inquire about the current QAP process and to shed light on their experience. Interviews with key stakeholders provided a great deal of insight into possible challenges or missed opportunities. Finally, they explored the CT CHFA applications for 4% LIHTC bonds to contrast and compare the application process with that of the 9% LIHTC.