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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.