LEGISLATION; HOUSING (GENERAL);

HOUSING - FINANCE;

Connecticut laws/regulations;

You asked us to compare the version of sSB 1004, AAC the Revitalization and Redevelopment of Certain Housing Projects, that the Housing Committee reported to the Planning and Development (P&D) Committee on March 18, 2003 against the version that P&D reported to the Finance Committee on April 2, 2003. (On May 1, the Finance, Revenue and Bonding Committee favorably reported a substitute. )

SUMMARY

The Housing Committee version of sSB 1004 focused more on the current residents of New Britain’s moderate-income rental developments, who consist mostly of very low- and low-income families. P&D’s version focuses more on making the revitalized or redeveloped projects in New Britain and in other cities economically viable.

The Housing Committee version of sSB1004:

1. required a certain number of replacement housing units for very low- and low-income people for New Britain and had certain conditions for what counts as replacement units;

2. required (a) close resident participation in the revitalization or redevelopment planning process and (b) state agency financial assistance for them; and

3. authorized (a) $ 15 million in new bonds plus other unallocated existing funds for New Britain’s housing revitalization or redevelopment and (b) $ 15 million in bond funds for Stamford to revitalize or redevelop Vidal Court.

P&D’s version (1) requires less replacement housing for very low- and low-income people and changes what may be counted as a replacement units in New Britain, (2) eliminates residents’ participation in the planning process and appears to reduce state assistance, and (3) eliminates the $ 15 million bond authorization for Stamford. (The Finance Committee favorably reported a substitute that eliminates all of the bond funding. )

P&D’s version expands to East Hartford, Hartford, New London, and Stamford the ability to revitalize or redevelop their moderate-income rental and elderly housing without the one-for-one replacement required by law, subject to certain conditions. It sets other conditions and requirements for revitalization or redevelopment (similar to those for New Britain) for these additional cities. It also expands the authority of the Economic and Community Development Commissioner (DECD) commissioner to dispose of moderate-income rental and elderly housing there.

The P&D version also removes direct responsibility from DECD and the Connecticut Housing Finance Authority (CHFA) to assist a development’s displaced tenants in New Britain, but it requires New Britain to fulfill certain requirements of the Uniform Relocation Assistance Act.

NEW BRITAIN

Required Replacement Unit Numbers and Conditions

Both versions of the bill allow New Britain’s housing authority, in cooperation with DECD’s commissioner, to revitalize or redevelop Corbin Heights, Corbin Heights Extension, Pinnacle Heights, and Pinnacle Heights Extension without the one-for-one replacement of units that is required by law. Both versions require a public hearing for a housing disposition plan, limit the minimum number of onsite units that must be built at 270, and require 635 replacement units overall. P&D’s version caps the maximum number of onsite replacement units at 550 and requires fewer of them to be for very low- and low-income residents.

Following is a more detailed comparison of the two bills’ provisions in these areas.

1. The Housing Committee version required 120 units in the existing state-assisted area (“on-site”) to be rented or sold to people with incomes below the poverty level, but P&D’s version sharply reduces the number to at least 5% of the total on-site replacement units, which means at least 27. 5 if 550 onsite replacement units are built (and at least 13. 5 if only 270 are built). P&D also eliminated the Housing Committee’s condition that the costs for such units may not exceed 30% of the poverty level for the appropriate family size unless the person is receiving a Section 8 voucher, in which case rent may be charged at the current market level.

2. The Housing Committee required that 150 onsite units must be sold or rented to people with incomes below 60% of the area median income (AMI) adjusted for family size, but P&D’s version reduces this to 25% of the on-site replacement (e. g. , 25% of the maximum number of 550 units is 137. 5).

3. The Housing Committee required 50 units outside of the existing state-assisted development, or offsite, go to people earning below the federal poverty level, but P&D’s version requires at least 5% of the total offsite units, which is at least 6. 75 (based on 135 offsite units). For both versions, at least 10 of these units must be built each year that the housing disposition plan is in effect and thereafter until the requirements are met.

4. The Housing Committee version required some offsite units for people at or below 60% of the AMI and restricted their cost to (a) not to exceed 18% of the AMI for the appropriate family size or (b) 30% or less of the poverty level for the appropriate family size, unless the person is receiving a certificate in which case the rent may be assessed at the current market level. But P&D’s version (a) requires the units be for people at or below the AMI and (b) eliminates housing cost restrictions. Both versions set the required number of reserved offsite units at the difference between the total number of off-site replacement units and 5% of the total offsite units required for people below the federal poverty level.

P&D’s version requires at least 10 offsite replacement units to be built each year that the housing disposition plan is in effect and thereafter for people at or below the AMI until the above requirements are met. The Housing Committee version had this requirement for people at or below 60% of the AMI.

What Counts: Types of Replacement

Both the Housing Committee and P&D versions allow, for the final replacement unit count, the replacement units to take the form of (1) new construction, (2) rehabilitation, (3) renovation, (4) federal Section 8 vouchers, or (5) state rental assistance program certificates. The Housing Committee version specified that only a federal Section 8 voucher or state rental assistance program certificate first issued after the bill takes effect can constitute a replacement unit. The P&D version eliminates this limitation.

Under the Housing Committee version, any replacement units had to be declared substandard or be vacant for at least one year before the renovation or rehabilitation. The P&D version excepts rehabilitated and renovated units in state-assisted housing developments from this restriction. It also allows any unit the city declares substandard to count as one of the 635 replacement units once it is fixed. The P&D version could therefore allow any housing unit that New Britain declares substandard to count as a replacement unit when it is brought up to standard, further decreasing the number of actual replacement units, according to Raphael Podolsky of the Legal Assistance Resource Center of Connecticut, Inc.

P&D’s version also eliminates the Housing Committee provision that prohibited rental prices on deed restricted units from exceeding fair market rents for the area as established by the federal Housing and Urban Development Department.

ADDITIONAL CHANGES FOR NEW BRITAIN

Residential Involvement

The Housing Committee version required (1) a sponsor of a housing project to allow for full participation in the planning, review, and implementation of a revitalization or redevelopment plan by a project’s residents and (2) that a plan provides for funding that allows a project’s residents to do so. P&D’s version eliminates these requirements.

The P&D version eliminates the following requirements for residents’ participation in the planning, review, and implementation of a disposition plan:

1. the disposition plan provides for reasonable funding for the residents to hire professionals with expertise in tenant outreach, training, housing policy and law, and organizing;

2. the residents of a development create a committee to choose representatives from these professionals to participate on the committee; and

3. the residents’ hired representatives participate on the committee.

Aid to Residents and the Uniform Relocation Assistance Act

Both versions specify that (1) residents living in the development on or after January 1, 2002 have priority over other families to purchase or rent available housing units and (2) if the number of eligible residents wanting to buy or rent a unit is greater than the number of units available, the housing authority may use a fair system (e. g. , a lottery) to determine who will buy or rent.

The Housing Committee version allowed residents to request a federal Section 8 voucher instead of claiming their right to an available housing unit and required the voucher to be granted if available. P&D’s version eliminates this option.

The Housing Committee version also required DECD and CHFA to assist eligible residents who are displaced by a development’s revitalization or redevelopment to qualify for housing units. It required them to:

1. provide or link eligible residents (a) to public or private mortgage and down payment assistance programs and (b) to state of federal assistance;

2. adjust interest rates and minimum payments for the eligible residents;

3. provide direct mortgage assistance, including Section 8 assistance; and

4. take other reasonable actions for eligible residents to purchase or rent housing units.

P&D’s version eliminates the requirements to adjust interest rates and minimum payments and direct mortgage assistance. It places the remaining responsibilities on New Britain’s housing authority and the sponsor involved in the project’s revitalization and redevelopment, with assistance from DECD, CHFA, and the Department of Social Services (DSS). It also requires New Britain’s housing disposition plan to fulfill requirements of the Uniform Relocation Assistance Act (URRA).

Both versions allow DECD’s commissioner to use proceeds from a development’s sale, lease, or transfer along with available appropriations and bond authorizations to assist eligible residents, regardless of laws governing state real property and the construction and alteration of state buildings. The Housing Committee version also allowed the commissioner to use the proceeds to:

1. enter into contracts and agreements for services, including for meeting the housing unit replacement numbers required;

2. secure federal funds or program participation;

3. provide relocation assistance and meet other requirements for displaced tenants;

4. pay or reimburse DECD for administrative expenses; and

5. act as a developer if a property defaults.

P&D’s version conforms with DECD’s reduced role and eliminates the provisions for the commissioner to (1) enter contracts or agreements and (2) to pay or reimburse DECD for administrative costs.

Uniform Relocation Assistance Act (URAA). URAA establishes policies for people who are displaced from their dwellings or businesses by state and local government programs. A person is eligible for assistance if his home or business is displaced by housing rehabilitation programs, code enforcement activities, or land acquisition programs. The URAA requires the displacing agency to provide advisory assistance and financial benefits. People who are displaced from their homes or apartments are entitled to benefits in addition to any amount the displacing agency must pay the property owner when it condemns or otherwise acquires property.

DECD, CHFA, and More Responsibility for New Britain

The Housing Committee required DECD to assure the number of assisted housing replacement units. P&D’s version requires that New Britain alone assure that 635 assisted housing replacement units are available when the housing disposition plan is complete. It also specifies that DECD and CHFA are not obligated to finance off-site units.

The Housing Committee version required the commissioner to approve and enforce a 30-year deed restriction on affordable units. P&D’s version requires New Britain to do so.

The P&D version also eliminates a provision allowing the commissioner to adopt regulations for implementing the replacement unit requirements for New Britain.

Sponsor and Housing Disposition Plan

Under both versions, New Britain may sell, lease, or transfer all or part of Corbin Heights, Corbin Heights Extension, Pinnacle Heights, and Pinnacle Heights Extension to a sponsor, with the approval of the commissioner.

Sponsor. The Housing Committee version, which addressed only New Britain, defined “sponsor” as (1) a local housing authority, (2) the municipality where the development is located, (3) a partnership comprised of public or private entities, or (4) another eligible developer under the state assisted housing program.

A “sponsor” under the broader P&D version is (1) a local housing authority; (2) any Connecticut corporation, either nonprofit or for-profit, limited liability company, partnership, joint venture, sole proprietorship, trust, or association that has as one of its purposes the construction, rehabilitation, ownership, or operation of housing; (3) persons or a family that the DECD commissioner approved as qualified to own, construct, rehabilitate, manage, and maintain housing; (4) a municipal developer; or (5) any combination of these entities.

Under both versions, New Britain must follow a housing disposition plan created by its local planning committee on or after January 1, 2002. The plan must provide for rehabilitation, reconstruction, or reconfiguration of the development. It may include fewer replacement units if the housing authority demolishes a portion of existing housing subject to the URAA, as discussed above.

OTHER CITIES

The Housing Committee version authorized (1) New Britain to revitalize or redevelop certain of its developments and (2) Stamford to revitalize or redevelop the Vidal Court project. P&D’s version allows the towns, housing authorities, and sponsors in East Hartford, Hartford, New London, and Stamford, in cooperation with DECD, to revitalize or redevelop any state-assisted, moderate-income or elderly housing developments built before 1970 without the one-for-one unit replacement required by law. It requires a sponsor, in conjunction with one of these towns’ local housing authorities, to have a housing disposition plan. The plan must include some continued affordable housing and meet other conditions, including URAA requirements, to qualify for the DECD commissioner’s approval.

Housing Disposition Plan

The Housing Committee version defined a disposition plan as a plan to address the disposition of state-assisted housing developments or a portion of a development.

P&D’s version specifies that a housing disposition plan is one (1) developed by a local housing authority in Hartford, East Hartford, New Britain, New London, or Stamford; (2) that is developed in consultation with the residents of the affected project and officials of the town where the project is located; (3) that addresses the disposal of one or more, or a portion of one or more, state-assisted housing developments that were built before 1970 by the local housing authority for low-income and elderly rental housing. The plan must describe alternative plans for the future of the housing development.

Other Requirements

P&D’s version also lays out requirements and conditions for the additional cities, which the Housing Committees’ version did not. These include:

1. requirements and conditions for revitalization and redevelopment,

2. the commissioner’s authority,

3. demolition and use of funds,

4. housing use restriction and exception,

5. resident priority and assistance to residents, and

6. non-housing uses.

Requirements and Conditions for Revitalization or Redevelopment. The housing authority of an affected town must hold a public hearing on a housing disposition plan before the DECD commissioner can consider it for approval. At least 30 days before the hearing, the housing authority must provide each of the development’s households written notice of the date, time, and place of the hearing and that the plan is available for public inspection at the housing authority.

The DECD commissioner may approve a town’s revitalization or redevelopment project after the public hearing, if the housing disposition plan the town submits (1) shows the need for the project (as specified below) and (2) contains a relocation plan whose benefits are in accordance with the URAA.

The housing disposition plan must show that the development:

1. is severely distressed or obsolete,

2. is in a location no longer suitable for housing,

3. has design or construction deficiencies that make cost-effective rehabilitation impractical,

4. should not be retained because (a) growth in the surrounding area adversely impacts residents’ health or safety or the project’s operation; (b) its sale or lease will allow for the acquisition, development, or rehabilitation of other properties; or (c) existing units will be more efficiently or effectively operated as mixed-income housing.

Additionally, the commissioner may approve a plan when, even if reasonable rehabilitation and management improvements were completed and paid for, the likely revenue for market-based rents would not cover (1) the anticipated operating costs and (2) replacement reserves at 95% occupancy.

P&D’s version authorizes the commissioner to decide that certain developments should be disposed of if he determines that other factors exist, consistent with the above conditions, to make the sale or lease of a development beneficial to (“consistent with the best interests of”) the residents and the state.

Demolition and Use of Funds. If a housing disposition plan calls for demolition of a portion of a development, the demolition must help ensure the useful life of the remaining portion of the development. Any funds from the revitalization or redevelopment must be deposited with the commissioner to be used for the creation or preservation of housing.

Housing Use Restriction and Exception. The plan must require that the real property it addresses, or a portion thereof, will remain affordable housing for at least 30 years after the initial tenants occupy the revitalized or redeveloped units. But if the commissioner decides, the 30-year requirement is void when there is a first mortgage of a governmental or quasi-governmental agency program relating to the real property.

Resident Priority and Assistance to Residents. Like New Britain, (1) residents residing on or after January 1, 2002 in the development that is being revitalized or redeveloped in the other affected cities have priority over other families to purchase or rent available housing units and (2) if the number of eligible residents wanting to buy or rent a housing unit is greater than that available, the housing authority may use a fair system (e. g. , a lottery) to determine who will buy or rent. Families must meet minimum eligibility requirements.

DECD, CHFA, and DSS must reasonably assist displaced residents by linking them (1) to public or private mortgage and down payment assistance programs and (2) to state or federal rental assistance. DECD’s commissioner may adopt regulations to implement these requirements.

Non-Housing Uses. The housing disposition plan must provide that the real property be used only for, or in conjunction with, activities related or similar to programs administered by DECD’s commissioner. The activities must primarily benefit low- and moderate-income people or families.

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