LEGISLATION; HOUSING (GENERAL);
HOUSING;

May 22, 2003 |
2003-R-0451 | |
HOUSING ISSUES AND THE 2003 SESSION | ||
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By: Joseph Holstead, Research Analyst | ||
You asked for information on housing issues in the 2003 Session, including provisions of the governor’s proposed budget that affect housing.
SUMMARY
The Select Committee on Housing reported 13 bills during the 2003 Session. As of this date, one has been enacted and three are awaiting final General Assembly Action. Affordable housing issues led all others, with nine bills focusing on preserving, financing, or redeveloping or renovating affordable housing. Within this category, four bills addressed state-assisted moderate-rental properties. Coincidentally, these properties were transferred this year from the Department of Economic and Community Development (DECD) to the Connecticut Housing Finance Authority (CHFA). CHFA paid the state $ 85 million for these and elderly housing properties (as authorized under Public Acts 02-1 and 02-5, both May 9 Special Session), which have a $ 65 million estimated value, according to Gary King, CHFA’s president and executive director, in his testimony to the Housing Committee on February 25, 2003. King said he does not foresee any immediate changes to the properties due to the transfer.
The governor’s initial tax (SB 1037) and budget (HB 6548) proposals (1) took a total of $ 80 million from CHFA in FY 2003-04 and 2004-05, (2) eliminated tax credits for contributions to the low-income housing and historic home rehabilitation programs, and (3) transferred all DECD housing programs to CHFA.
The General Assembly passed a budget, HB 6720, on May 15, which the governor vetoed on May 16. It also transferred housing programs from DECD to CHFA, but it did not transfer CHFA funds and eliminated other proposals affecting housing under the governor’s bill.
A summary and legislative history for each housing bill follows below.
SUMMARIES AND LEGISLATIVE HISTORIES OF 2003 HOUSING COMMITTEE BILLS
SB 516 — AAC Housing Incentives
The bill requires DECD to study the possibility of expanding housing incentives and initiatives, including home ownership, and report its findings and recommendations to the Housing Committee by February 1, 2004. It also requires CHFA to implement a program to provide mortgage financing to licensed residential care facilities.
On March 11, the Housing Committee reported the bill to the Planning and Development (P&D) Committee, which reported a substitute (File 354) on April 2. The Senate referred it to the Legislative Management Committee on April 23.
SB 517 — AAC Assistance to Moderate Income Public Housing Developments in Hartford
The bill authorizes up to $ 15 million in bonds for DECD to assist state-owned, moderate-income public housing developments in Hartford to pay for capital improvements, modernization, repair, and maintenance.
On March 18, the Housing Committee reported the bill to P&D, which referred it to the Finance Committee on April 2.
SB 615 — An Act Providing Funding for Housing Initiatives
The bill authorizes up to $ 12 million in bonds for DECD to use to provide distressed municipalities with home ownership incentives or emergency homeless shelters and improvements to support services related to (1) substance abuse, (2) mental illness, and (3) job training.
On March 11, the Housing Committee reported the bill to P&D, which referred it to the Finance Committee on April 2.
sSB 897 — AN ACT CONCERNING THE DISPOSITION OF STATE-ASSISTED HOUSING PROPERTIES IN DEFAULT
This bill allows the DECD commissioner, in consultation with CHFA, to take two actions when the developer of any state-financed property lawfully dissolves. He can (1) allow the property to participate in any DECD program with the Office of Policy and Management commissioner's approval or (2) accept ownership of the property for the state and sell it to an eligible developer for a price and on terms he deems proper. Under current law, the DECD commissioner acts as the developer for any housing property the state acquires because of DECD action to preserve the state's interest. As the developer, he can operate the property and receive state and federal funds to help him.
The bill requires, in either case above, that any action the DECD commissioner takes must preserve most of the property as housing for very low-, low-, or moderate-income people. The exception to this requirement is for specified properties in Bridgeport, Hartford, and Middletown.
The bill requires the commissioner to allow the continued use of:
1. Bridgeport’s Saint Joseph’s Residence for Mothers and Children as a day care center,
2. Hartford’s House of Bread as a community day care center and corporate office, and
3. Middletown’s Rainbow Court Cooperative as rental units for low-income people.
“Housing,” under the bill, includes facilities and amenities incidental and pertinent to making affordable housing available and intended primarily to serve the affordable housing development's residents. The facilities and amenities include (1) a community room, (2) a laundry room, (3) day care space, (4) a computer center, (5) a management center, or (6) a playground.
On March 18, the Housing Committee reported the bill to P&D, which favorably reported a substitute (File 420) on April 2. On April 23, the Senate referred the bill to the Commerce Committee, which favorably reported it on April 30. The Senate amended it, adding the housing definition and exceptions among other things, and passed it on May 15. The House passed it (File 420, as amended by Senate “A”) on May 20.
SB 899 – AAC Rental Assistance
The bill appropriates $ 1. 8 million for the Department of Social Service’s rental assistance program for FY 2003-04. On March 11, the Housing Committee reported the bill to P&D, which favorably reported it on April 2. On April 23, the Senate referred the bill to the Human Services Committee, which favorably reported it on May 1. The Senate referred it to the Appropriations Committee on May 7.
HB 991 — AAC Lead Action for Medicaid Primary Prevention Demonstration Project
The bill authorizes up to $ 1 million in bonds for the Department of Public Health to fund a demonstration program that promotes safe housing through (1) education, (2) medical screening, and (3) appropriate house repairs. (The bill does not specify that the demonstration program be used for lead abatement. )
On March 11, the Housing Committee reported the bill to P&D, which favorably reported it to the Finance Committee on March 31.
sSB 1004 — AAC the Revitalization and Redevelopment of Certain Housing Projects
This bill allows New Britain’s housing authority, in cooperation with the DECD commissioner, to revitalize or redevelop Corbin Heights, Corbin Heights Extension, Pinnacle Heights, and Pinnacle Heights Extension, subject to certain conditions and requirements. It also allows East Hartford, Hartford, New London, and Stamford, and housing authorities and project sponsors there, in cooperation with DECD, to revitalize or redevelop any state-assisted, moderate-income or elderly housing developments built before 1970. It allows all five towns to revitalize or redevelop certain housing developments without providing (1) a residential antidisplacement and relocation assistance plan for the commissioner’s approval and (2) the one-for-one unit replacement required by law. But the bill does require all five towns to meet relocation assistance requirements of the Uniform Relocation Assistance Act (URRA).
For East Hartford, Hartford, New London, and Stamford, the bill requires a sponsor, in conjunction with a housing authority, to show that an existing development meets the conditions that allow for revitalization or redevelopment. It also sets conditions for implementing a housing disposition plan in these towns, subject to the DECD commissioner’s approval.
The bill specifies for New Britain (1) the projects it may revitalize, redevelop, or reconfigure; (2) the number of replacement units required and where they should be; and (3) the income level certain units must serve. The commissioner may use funds from the sale, lease, or transfer of New Britain’s projects or other available appropriations or bond funds to assist eligible New Britain residents who are displaced by revitalization or redevelopment.
On March 18, the Housing Committee reported a substitute bill to P&D, which favorably reported a substitute to the Finance Committee on April 2. On May 1, the Finance Committee favorably reported a substitute (File 704).
HB 5133 — An Act Protecting Certain Homeowners from Foreclosure
The bill (1) protects certain homeowners in distressed municipalities from foreclosure for an additional six months after the court enters judgment and (2) appropriates $ 150,000 to DECD for the Homeowners Emergency Loan Program for FY 2003-04 for financial counseling and legal assistance for homeowners threatened by foreclosure.
On March 18, the Housing Committee reported the bill to P&D, which favorably reported the bill to the Judiciary Committee on March 31. On April 11, the Judiciary Committee referred the bill to the Appropriations Committee.
HB 6436 — An Act Authorizing the Issuance of Bonds for Affordable Housing
The bill authorizes $ 25 million for DECD to finance state housing development programs as of July 1, 2003 and $ 40 million as of July 1, 2004. On March 11, the Housing Committee reported the bill to P&D, which favorably reported it to the Finance Committee on April 2.
HB 6438 — AAC Housing Loan Guarantees
This bill makes entities that finance affordable housing eligible to enter a contract for state financial assistance in addition to certain eligible entities that, by law, are eligible. Eligible entities under current law have as one of their main purposes the construction, acquisition, rehabilitation, or operation of affordable housing, or any combination of these activities.
On March 11, the Housing Committee favorably reported the bill to P&D, which favorably reported it (File 330) on April 2. The House referred it to the Finance Committee on April 22. A bond authorization bill, SB 1038, which the Finance Committee Favorably reported on May 1, incorporates the language of HB 6438.
HB 6466 — An Act Expanding the Housing Tax Contribution Program and the Historic Home Rehabilitation Tax Credit Program
This bill expands the historic home rehabilitation tax credit program by authorizing income tax credits for rehabilitating historic homes. Current law authorizes business tax credits for this purpose. Under current law, the Connecticut Historical Commission provides tax credit vouchers to people or nonprofit organizations rehabilitating historic homes. They give the vouchers to business contributors, who must then attach them to their tax returns.
Under the bill, individuals qualify for income tax credits for the amount they spend on or contribute to rehabilitating a historic home. They must access these credits the same way they and nonprofit organizations access the corporate tax credits on behalf of business contributors. Current law authorizes up to $ 3 million per year in corporate business tax credits; the bill makes this amount available for all credits.
The bill also expands the types of businesses that qualify for tax credits under the Rental Housing Assistance Trust Fund Program (popularly known as the housing tax contribution program) to include limited liability companies, limited liability partnerships, limited partnerships, and corporations.
The CHFA allocates the tax credits to businesses that contribute funds to nonprofit housing organizations developing low- and moderate-income housing. CHFA can annually award up to $ 5 million in credits. Insurance companies, hospitals, medical services corporations, air carriers, railroad companies, cable and community antenna companies, utility companies, and any other businesses paying corporate business taxes are currently eligible for credits.
On March 11, the Housing Committee reported the bill to P&D, which favorably reported it (File 343) on April 2. The House referred it to the Finance Committee on April 22.
HB 6505 — AAC the Return of Rental Deposits
This bill includes people, firms, or corporations that manage residential real property for landlords in the definition of landlords under the law on residential security deposits. By law, “landlord” means any landlord of residential real property, including (1) any receiver, (2) successor to a landlord or his interest, and (3) any tenant who sublets his premises.
The law:
1. caps the maximum allowable security deposit,
2. sets the interest rate on security deposits at the same rate payable on savings accounts,
3. specifies when deposits must be returned,
4. sets allowable deductions from a security deposit, and
5. penalizes any landlord that violates these provisions.
On March 11, the Housing Committee reported the bill to P&D, which favorably reported it (File 341) on April 2. On April 22, the House referred it to the Judiciary Committee.
sHB 6516 — AAC the Preservation of Federally-Assisted Housing
This bill requires owners of housing developments that (1) received government assistance under certain Department of Housing and Urban Development (HUD) programs and (2) intend to stop making their rental units affordable to low- and moderate-income people to:
1. provide lease extensions and relocation assistance (i. e. , payments) to tenants, including those receiving federal Section 8 vouchers;
2. notify tenants and various entities two years before terminating a subsidy for the development of their right to first refusal to purchase the development; and
3. notify tenants and various entities one year before an intended termination of subsidy, including a detailed offer to sell.
The bill invalidates the termination of a development's subsidy when an owner fails to provide and file the notice it requires and subjects violators to civil action. Under the bill, an owner is an individual, partnership, corporation, association, joint venture, or business entity with a HUD contract for a mortgage, mortgage assistance, mortgage insurance, or rent subsidy, and includes any person or entity that receives rent for the development.
On March 18, the Housing Committee reported the bill to P&D, which favorably reported it (File 374) on April 2. The House referred it to the Judiciary Committee on April 23, which favorably reported it on May 2. The House referred it to the Finance Committee, which favorably reported it (File 374) on May 15.
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