top of page

Affordability FAQ: We answer your questions about "affordability" and "workforce hous

Frequently Asked Questions about Affordable and Workforce Housing

1. What is Affordable Housing?

“Affordability” is a standard set by banks and lenders that is based on a percentage of household income. Income limits are provided annually by HUD (US Department of Housing and Urban Development), as well as rent levels based on household composition and household income. Most financial advisers recommend that a household should spend no more than 30% of its gross annual income on housing costs. For home buyers, that would include mortgage costs (principal and interest), insurance, taxes, and association fees, if any. For renters, that figure would include rent and utilities.

In the current environment, you may also hear it called “attainable housing” or “workforce housing”, but, technically, any housing that meets this generally accepted standard is affordable. Affordable housing can also be any type of housing – purchase or rental, single family, multi-family, condominium, town house, or apartments.

Affordable housing provides a solid foundation for a strong community. Residents who live in a home that is affordable have funds to purchase food, provide health care and satisfy other living needs. Residents of affordable homes also have the economic means to purchase goods and services in their communities. Affordable housing helps to create economic stability.

2. What happens to a community when there is not enough housing that people can afford to rent or buy?

  • The inability to pay rent or the mortgage costs lead to evictions, foreclosures, homelessness and transience

  • If paying the rent or mortgage exceeds 30% of income, too little is left for food, clothing, health care, transportation, and other necessities

  • Connecticut is losing young people aged 18-35 at the fastest rate in the nation

  • Research directly points to the lack of affordable housing as employers have jobs but can’t pay workers enough to afford to buy or rent a home

  • The loss of the 18-35 age group deprives towns of their skills and labors, shrinks volunteer groups that provide needed services, and compromises the vitality all communities need to thrive

  • Old Lyme’s median age is now 50.4, far above the state average of 40.2 years old

  • Essex's median is now 53.7, also well above the state average

  • When people can’t afford to live in the towns they work in – its teachers, firefighters and service workers - their personal investments in their neighborhoods are never realized

  • Rentals are so scarce that many families live in area hotels and the problem is so severe that local churches have created after school programs for children who live there with their working parents.

3. What is HOPE Partnership?

HOPE is a small non-profit, governed by a volunteer Board of Directors whose members include local clergy, business leaders, bankers, a police chief and community members. Based in Old Saybrook, HOPE is dedicated to developing affordable housing options in Lower Middlesex County and surrounding towns.

In 2001, members of a local church group began meeting to respond to the troubling trends of families with children that were living in local motel rooms with nowhere else to live. The group grew to include local residents and business leaders concerned about the increased cost of housing in the community. In 2015, HOPE merged with Old Lyme Affordable Housing, to continue their mission. HOPE incorporated as 501(c)(3) in 2004.

Our mission is to create a continuum of affordable housing options in Lower Middlesex County and the surrounding towns in order to help ensure an eclectic economy and housing choice for all citizens through the collaborative efforts of governments, businesses, religious communities, civic organizations and individuals.

4. How and who pays for affordable housing?

Developments are funded using a mix of public and private financing. Because we restrict the rents of our housing to ensure that it remains affordable to households who can't afford quality housing in our area, we need to leverage a variety of sources to provide a mix of debt and equity that will sustain the project for decades to come. River Oak Commons in Old Lyme will be funded through a variety of sources, such as a mortgage from Federal Home Loan Bank and Guilford Savings Bank, private investor equity through the Low-Income Housing Tax Credit program (LIHTC), and CT Dept. of Housing bond financing.

After the housing is occupied, rental income paid by the residents is utilized to pay debt, utilities and maintenance similar to any apartment community.

5. How can HOPE Partnership help this situation?

Because HOPE is a non-profit organization, special funds and grants are available to us to help reduce the costs of creating new affordable housing. This helps us to control rent or mortgage costs over the long term for the people who live in our buildings, so that they will not have to pay more than 30% of their annual gross household income.

6. Will HOPE Partnership actually build the houses?

Generally HOPE Partnership (HOPE) will be responsible for the following:

  • Pre-construction feasibility and due diligence study and analysis.

  • Contract to purchase or lease the property.

  • Zone change if needed.

  • Work with attorneys, architects, engineers and other consultants to develop site plans and architectural drawings.

  • Obtain all municipal, state, and federal approvals necessary to begin site development.

  • Perform all public outreach activities to inform and educate the community about affordable housing and the specific proposed project

During this process, as the project becomes more feasible, HOPE will begin to interview candidates to be HOPE’s development partner. HOPE will choose the candidate most capable of:

  • Obtaining any necessary financing and grants.

  • Providing working capital.

  • Building the project according to the plans and specification.

  • Initial rent-up, continuing re-rent, and property management according to all applicable laws and regulations.

  • Providing periodic financial and other operational reports to HOPE

  • HOPE, together with the development partner, will be the owners of the project usually in the form of a separate Limited Liability Corporation (LLC).

  • From time to time, HOPE may become involved with a for-profit or non-profit entity that is proposing an affordable housing project. That involvement may include acting as a consultant or advisor. Generally, HOPE would not be involved in the actual development, financing, ownership, or ongoing property management.

7. What are the facts about River Oak Commons I & II & The Lofts at Spencer's Corner?

River Oak Commons (As of 4/30/2018. All unit mixes, including the number and location of market units and unit rents are subject to change based on financing and approvals)

River Oak Commons I, Old Lyme (Neck Road HOPE Housing, LLC, Women’s Institute on Housing & Economic Development (WIHED) and HOPE, members)

7 Residential Buildings + Pump House Building – 23 units, 47 bedrooms

Six 3 Bedroom, Twelve 2 Bedroom and Five 1 Bedrooms units

River Oak Commons II, Old Lyme (Old Lyme HOPE Housing, LLC WIHED & HOPE, members)

4 Residential Buildings + Community Building -14 units, 26 bedrooms

Three 3 Bedroom, Six 2 Bedroom and Five 1 Bedrooms units

Maximum Allowable Family Income ranges from $25,000 - $89,000.

Rent estimates for 2020 range from $500 - $1,250, all based on Fair Market Rent, AMI and Maximum Allowable Family Income.

The Lofts at Spencer’s Corner

(As of 4/30/2018. All unit mixes, including the number and location of market units and unit rents are subject to change based on financing and approvals)

Lofts at Spencer’s Corner, Centerbrook (existing structure)

17 Flat & Townhouse Style Units / 2nd and 3rd floor

One 3 Bedroom, Nine 2 Bedroom and Seven 1 Bedrooms units

8. How will River Oak Commons and the Lofts at Spencer's Corner handle septic and water?

After studying the soil conditions, the engineering team determined that the sites can accommodate a state of the art septic system design.

As of this writing, for River Oak Commons, the development team has completed multiple soil testing on the site and determined that an onsite water system will be built, utilizing two wells. The water system will be owned and maintained by Connecticut Water company, which is overseen by the State of Connecticut Public Utilities Regulatory Authority.

9. Does the town still collect property taxes if it is affordable housing?

Yes, property taxes are assessed and paid to the town.

10. How do these properties compare to other developments in the area?

Other than a very limited supply of affordable housing units operated by local Housing Authorities (mostly Section 515, 202 and other senior housing), there are only 3 developments in the Primary Market Area that provide "affordable" housing units with 2 of these being private, for-profit properties developed under 8-30g. Post & Main in Old Saybrook and the newly constructed Essex Station development in Essex together provide 54 affordable units, all at the 80% AMI, with the exception of 8 at 60%AMI. The only comparable property is Ferry Crossing in Old Saybrook developed and operated by HOPE Partnership and the Women's Institute for Housing and Economic Development. Ferry Crossing has 16 units serving households at 25%, 50%, 60% and 80% of the AMI. The property has a waiting list of 10 households which represents many years of demand based on historical turnover rates.

11. Who lives in homes built by HOPE?

Our commitment is to families who live and work in our Shoreline communities – some who are already here, living in substandard housing; some who work here, but who have to drive long distances to work, and would like to live nearby – generally, individuals and families who make a positive contribution to the Shoreline communities.

According to HUD, as of April 1, the Area Median Income (AMI) in Old Lyme and in Essex is $84,800. This new neighborhood will have units designated for families making between 25% of the AMI up to Market Rate units. Here are some examples from the Partnership for Strong Communities of occupations and the median annual income:

income graphic

12. Who decides who gets one of these places?

HOPE Partnership and WIHED will partner with an experienced management company to screen and select applicants for the housing it builds. This was a positive experience for both HOPE and the residents.

13. What are the criteria?

The criteria are mainly financial, which change from year to year and the figures are based on a percentage of the town or state median income. When Ferry Crossing was built, there was a preference point criterion and the definitions are below. This was based on Fair Housing Laws and a similar plan will be put into the affordability plan that our team will produce upon financing and approvals.

  • Current resident (3) points – a household in which one or more members is living in the town at the time of application, in Old Lyme for River Oak Commons, and in Essex for The Lofts at Spencer's Corner.

  • Municipal Employee (3) points – a current employee of the town, such as teachers, janitors, firefighter, police officer, librarian, town hall employee etc.

  • Veteran (3) points – a household in which one or more members serves or served in the United States armed services. Documentation of Veteran status must be provided.

  • Least Likely to Apply (10) points – a household that included persons who are not likely to apply for this housing without special outreach efforts, as identified in the affordability plan.

14. How will the property be maintained?

HOPE Partnership hires experienced property managers to watch over and care for the building on a daily basis. The management agency oversees the lease up and rent collection for units, makes sure repairs are made and that the buildings and land are maintained throughout the year, and deal with resident or community issues that arise.

HOPE’s developments rely on private and public financing, which requires that property managers are certified and have the necessary experience to successfully oversee the daily operations. The funders will also require that there are the necessary reserves and rental income from the units to maintain the property in good condition for 40+ years.

15. What will the impact of this housing be on our community?

There are many positive impacts to building affordable housing – including new property taxes that go to the town from the project, greater savings and more stable home lives for families due to greater options for affordability, and economic development opportunities for businesses whose potential employees would be able to live and work in the same community.

A new development can have an impact on infrastructure, traffic, and the environment. HOPE Partnership minimizes these impacts by working within the town’s plan of conservation and development. In the case of these two projects, the team is studying the effects of potential traffic changes, researching the historic and environmental sensitivities to the site, and limiting the project scale to what is allowable by local septic and water regulations. These factors all influence the project scope and design to ensure that the positive impacts outweigh the negative.

16. Who is the Development Team?

HOPE has partnered with the Women’s Institute for Housing and Economic Development, Point One Architects, and Indigo Land Design for this development. The Women’s Institute is a nonprofit developer with a successful track record of building and owning high quality housing across the state, and has jointly developed Ferry Crossing in Old Saybrook with HOPE. Point One Architects is located on Shore Road in Old Lyme and understands the design priorities of the community as well as the need for creating a durable and complete community. They were the architects on Ferry Crossing with HOPE and Women’s Institute. Indigo Land Design is also based in Old Saybrook, and has extensive knowledge of the site, land features, and health and safety regulations for the community.

Contact: Lauren Ashe, Executive Director, HOPE Partnership

bottom of page