You asked for (1) the percentage of its tax-exempt private activity bonds the Connecticut Housing Finance Authority (CHFA) set aside for multi-family housing developments in 2009 and (2) the number of affordable units CHFA funded since the passage of PA 07-234. This report updates OLR report 2008-R-0078.

SUMMARY

By law (PA 07-234), CHFA must use at least 10% of its annual private activity bond allocation for multifamily residential housing in calendar year 2008 and at least 15% in every year thereafter. These bonds are capped at $180 million.

In 2008, CHFA approved $80 million (44%) in private activity bonds for multi-family developments. The agency's 2009 lending plan provides approximately $159.7 million (88%) for this purpose. By law, CHFA exists to finance housing for low- and moderate-income state residents and since the enactment of PA 07-234 it has significantly increased the allocation of private activity bond funds for affordable multi-family housing developments.

CHFA funded three developments, totaling 276 affordable units, in 2008 with private activity bond funds. Nearly all the units in these developments were reserved for people earning 60% or less of the area median income (AMI), although a small percentage were available to those earning 80% or less of AMI. (A housing unit is generally considered affordable if a family earning no more than the municipality's area median income as determined by the federal department of Housing and Urban Development pays no more than 30% of its income for the housing.)

CHFA'S 2009 MULTI-FAMILY HOUSING DEVELOPMENT FUNDING

Of the $159.7 million CHFA is setting aside for multi-family rental housing in 2009, $34.2 million (21.4%) has been designated for developers who applied for funding in 2008 for forthcoming projects (i.e., for mortgage commitments for developments), according to CHFA. Additionally, the authority is reserving $8.3 million to fund a remaining 2008 project (the acquisition and rehabilitation of Sycamore Place Apartments in Bridgeport). CHFA plans to issue a notice of funding availability (i.e., an invitation to submit proposals) to multi-family housing developers to compete for the remaining bonding authority of approximately $117 million.

AFFORDABILITY

In 2008, most units funded are for people earning 60% or less of AMI, with a small percentage in one development also slated for those earning up to 80% of AMI. Table 1 below indicates these affordability levels among other things.

TABLE 1: CHFA's 2008 Multi-Family Private Activity Bond Issuance Developments

*SOURCE: CFHA

To put the table's affordability percentages in context, the median incomes are (1) $81,100 for Bridgeport and Hartford and (2) $117,800 for Stamford. Thus, 60% of AMI is $48,669 for Bridgeport and Hartford and $70,680 for Stamford (for the Hartford units at 80% of median income, that amount it $65,440). In Hartford, a family earning $48,669 or less could qualify to live in 56 of the development's units and a family earning $65,440 or less could qualify for the other 14 units.

According to CHFA, occupants in the Hartford and Stamford developments may spend more than 30% of their annual income on rent. (Presumably, allowing people to spend more than the 30% of their income will give greater flexibility in providing homes to those with incomes that are less than 60% of AMI and who need them.) But, all the “Bridgeport Elderly” development units are subsidized under the federal Section 8 Project-Based rental assistance program, which means that all residents will have incomes of less than 50% of AMI and spend no more than 30% of their income on rent.

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