After an initial proposal to sweep the funds in the HOMEConnecticut account to close the deficit in the FY'09 budget, lawmakers rallied behind HOMEConnecticut to save those funds.  Towns are also showing their support, with more than 70 towns actively engaged in the program - click here to see a map of interested towns.

However, we are at a point - because of the recession, revenue decline and uncertain budget situation - that gives us pause. The Office of Policy and Management has stopped approving or even accepting applications for planning grants under the program, and is not acting on the first two Incentive Housing Zone applications from Wallingford and Old Saybrook. Given the popularity of the program, the question will now turn to how financing can be obtained to continue the progress.

The HOMEConnecticut Steering Committee met June 22 to discuss the progress of the Campaign and to also weigh future steps to ensure that the momentum of the program continues. Staff at the Partnership for Strong Communities is preparing options for the Steering Committee to consider in the fall, including discussions with OPM after the budget stalemate is solved.

In the meantime, towns continue to see HOMEConnecticut as a means to accomplish not only the primary purpose - creating housing options affordable and appropriate for municipal workers, commercial workers, elderly empty nesters, young adults returning to their home communities, young professionals and families - but also to create foot traffic and shoppers to develop town centers, support local merchants, keep young families in towns and address other concerns.

May Home Sales "Anemic"; Experts Project Price Rise But Market Changes
Single-family home sales in Connecticut declined 12.5% in May, the smallest monthly decline this year, adding to indications that the sales decline is bottoming out.

Meanwhile, business and housing market specialists on the HOMEConnecticut Steering Committee - from CBIA President John Rathgeber to Fannie Mae's Bob Kantor to economist Bruce Blakey - remarked on June 22nd that, while a shortage of affordable and modest market-rate housing would lead to fairly rapid price increases once unemployment and foreclosure related demand picks up, those increases would not be as large or fast as those seen from 2000 through 2007. The experts observed that structural changes in the economy - lower wages, slower income and job growth - may moderate the pace of price increases.

Robert Kennedy, executive vice president of the Connecticut Association of Realtors, noted that price declines of high end homes in Fairfield County and other locations had not spilled over to affordable, modest and mid-range homes. Hence, their continued short supply might force their prices even higher when job growth returns.

On the home price front, the year-to-date drop of 15.1% statewide showed significant variation - from 4.3% in Tolland County to 22.2% in Fairfield County. The number of bank-owned property sales in Connecticut jumped significantly to nearly 6 percent of single-family home sales transactions so far in 2009 compared to just 1 percent last year, according to The Warren Group, publisher of The Commercial Record. While year-to-date single-family sales dropped 24.2 percent from 9,157 during the same five months last year, 397 involved a bank or other lending institution, according to The Warren Group. During the same months last year, only 105 single-family home sales were of bank-owned properties.  

"The sale of foreclosed homes has become a larger share of the residential real estate market in Connecticut. Still, those sales haven't helped to boost the state's housing market because sales in May were anemic," said Timothy M. Warren Jr., CEO of The Warren Group. "In the late 1990s and into the early part of this century, Connecticut was averaging over 3,500 single-family home sales during the month of May. Last month, we had fewer than 1,900 home sales, making it the slowest sales pace for the month of May since we started tracking changes in real estate sales in 1987."

Click here for a pdf with the May data from the Warren Group. For data from previous years, click here.

Federal Housing Policy Picture: Optimistic and Then Some!
Recent testimony by HUD Secretary Shaun Donovan, DOT Secretary Ray LaHood and EPA Administrator Lisa Jackson - along with new legislation being prepared by U.S. Sen. Christopher Dodd - has given HOMEConnecticut Steering Committee members and housing advocates in Connecticut and across the nation reason for optimism.

At a June 16 hearing before Sen. Dodd's Banking Committee, the three cabinet members announced a Partnership for Sustainable Communities and said they would coordinate planning and spending to ensure creation of affordable homes near transit and other smart growth locations.  Donovan said he would create a $150 million sustainability fund in his next budget, and both LaHood and Jackson said they would devote funding to the effort.

Meanwhile, Dodd is working on legislation that would provide grants to regions to plan and then create housing near transit in the same way that HOMEConnecticut provides planning grants and incentive payments to towns that create housing in areas of density and infrastructure. While Congress has healthcare reform and other major legislation to act upon this summer and fall, it is likely that the new federal budget will contain funds that state housing, transportation and environmental officials can tap to further our goals.

TOD, With Housing, a State and National Focus
The potential to build mixed-income housing near public transit - a way to use HOMEConnecticut to cut housing costs, transportation costs, and harmful environmental impacts - was evident in a Hartford Courant story that focused on the enhanced chances for development of the Springfield-New Haven rail line. The story indicates that housing close to potential stops along the line could reduce the auto emissions and traffic congestion from I-91.

In addition, the proximity to transit could increase the price of market-rate units close to the station, thus allowing developers to absorb the costs of affordable units in the development.  This would also obviate the need for taxpayer subsidy of the transit operation because riders living close to the stations would tend to provide sufficient ridership and, thus, revenue.

Housing Tied to Other Policy Solutions
The connection of housing to not only transportation and environmental policy but also healthcare and education has become a focus across Connecticut and the nation. Those links were in evidence at a June 28-30 Chicago conference, at which workshops focused on housing's ties to those areas, and at a 2009 Lyceum Forum Series sponsored by the Partnership for Strong Communities and the state Department of Economic and Community Development.  

Materials from the 2009 Lyceum Forum Series, which focused on housing and healthcare, education, transportation, environment, municipal government, workforce development and social services, are available here.

Donovan Sets Priorities at Chicago Conference
Declaring that "home is an essential source of family stability," HUD Secretary Shawn Donovan told 400 housing advocates in Chicago on June 30 that he will try to shape a national housing strategy that connects housing affordability to education, transportation, environmental quality and healthcare.  Sec. Donovan made the comments during the closing session of the "Solutions for Working Families" conference organized by the National Housing Conference and its research arm, the Center for Housing Policy.  

The three day conference was held from June 28-30 in Chicago and explored a number of important housing policy issues, including: coalition building, employer-assisted housing, advances in mixed-income and mixed-use development, various effective state and regional programs, shared-equity financing models, inclusionary zoning and much more. Thanks to a generous grant from the Hartford Foundation for Public Giving, three Partnership staff members were able to attend this national conference.

Partnership staff member David Fink presented information about the HOMEConnecticut Campaign and its successes for a workshop on "State and Regional Approaches to Housing" and moderated a second workshop on "Organizing Statewide and Regional Coalitions."  Partnership's Shelby Mertes attended the day-long institute on "Foreclosure Prevention and Neighborhood Stabilization" while Christy Rubenstein attended the institute on "Preserving and Improving Affordable Rental Housing."  

The conference was capped off by Sec. Donovan's speech, in which he said he would seek to:

• Spur "innovation at the local level" and bring those new ideas forward for others to see.
• Bring funding stability and consistency to public housing and section 8 programs.
• Capitalize the Affordable Housing Trust Fund. "If there isn't equal access to safe and affordable housing, there isn't equal access to opportunity. When you choose a home, you choose the school your child will go to, you choose transportation, you choose a community."
• Further the Sustainable Communities initiative with a $150 million sustainability fund proposed in the new HUD budget.
• Enhance the Choice Neighborhoods program to better link housing to interventions in education, early childcare and other programs. "Planning communities in a more sustainable way is essential to creating economic opportunities" for those we are working to help.
• Continue HUD's partnership with the Department of Energy on weatherization funds and a $100m energy innovation fund, using it to catalyze the home energy retrofit market.

"We need a comprehensive housing strategy" that recognizes that affordable rental housing opportunities are inseparable from economic opportunities, Donovan said in his address to the conference.  "Too often, "Donovan said, "HUD hasn't been a catalyst for change, but a barrier to change.  And that needs to change."  

The conference was also addressed by Bruce Katz of the Brookings Institution, former HUD Secretary Henry Cisneros and Carol Coletta of CEOs for Cities.

U.S. EPA Offers Climate Showcase Communities Grants
The HOMEConnecticut program encourages compact housing development in such smart growth locations as downtowns and near transit, which can reduce auto use, increase walkability and make transit more viable.  Municipalities working on Incentive Housing Zones under HOMEConnecticut may wish to consider applying for new federal funding for climate change initiatives.  

The EPA's new "Climate Change Communities" program will offer $10 million to approximately 30 communities nationwide, with grants ranging $100,000 to $500,000, to be used for planning, research and implementation.  A wide variety of uses are allowed, including land use, transportation or community master planning; reduction of vehicle miles traveled; energy performance in residential buildings - all of which are compatible with HOMEConnecticut goals.

An optional letter of intent is requested by EPA July 1, and application due July 22. Click here for more information and application information.