Tracking Supply: Study cites decline in affordable housing along 'Gold Coast'

August 22, 2007; As originally appeared in the Stamford Advocate by Doug Dalena

STAMFORD -- Despite efforts to close the gap between residents' income and housing costs, it continues to widen, a study published yesterday reported.

The study of the supply and demand for affordable housing -- published by the South Western Regional Planning Agency -- found that eight southwestern Connecticut cities and towns often nicknamed the "Gold Coast" have become more gilded since 1996, when a similar study already targeted affordable housing as a significant problem.

The supply of government-regulated, moderately priced housing decreased from 1998 to 2006, according to the study, even as housing prices shot up and job growth attracted more residents.

Harrell-Michalowski Associates, the Hamden planning firm that produced the study, examined statistics from Darien, Greenwich, New Canaan, Norwalk, Stamford, Weston, Westport and Wilton. The statistics include the number of housing authority apartments, federal vouchers to subsidize rents in privately owned buildings, units with deed restrictions on their rent or sale price and private homes with mortgages guaranteed by the state or federal governments.

The region's supply of government-regulated affordable housing units dropped by 11 percent from 1998 to 2006, though much of that drop came with the demolition of the Stamford Housing Authority's Southfield Village complex. The crime-riddled, crumbling complex was replaced by a lower-density, mixed-income development seen as a showpiece of the federal government's HOPE VI revitalization program, which replaces outdated public housing.

Since then, Stamford has passed an ordinance requiring developers of multifamily housing to include affordable units in each project. The ordinance was passed in 2003, but units created under it have just begun to be occupied in the past two years. According to statistics from Stamford's land-use bureau compiled in July, about 85 units have been built, with another 47 under construction. Another 200 have been approved, but not built.

"I'm pretty satisfied with what we've been doing," Mayor Dannel Malloy said.

Stamford's own affordable housing study, completed in 2001, found the city needed 8,000 affordable homes to keep up with job growth.

Still, the strides made in the past several years have set the stage for much more affordable housing production, according to Joan Carty, executive director of the Housing Development Fund, a nonprofit affordable housing lender and advocacy group. "The delivery . . . is going to be really much easier now that the infrastructure is in place," she said.

That includes inclusionary housing ordinances such as Stamford's and one passed by Norwalk in January, increased participation from banks in affordable housing lending and a recent focus by state and regional leaders on creating more housing near transit centers, something the new SWRPA study recommends.

"Higher density, which is considered such a bad thing in some parts of the county, is actually considered more acceptable in transit hubs," Carty said.

At the same time, the astronomic rise in the area's housing market has eroded the supply of affordable rental and owner-occupied homes.

Based on 2000 U.S. Census figures, the authors found that only 14.4 percent of homes in the region's towns were affordable for purchase to families making about $82,000 -- 80 percent of the area's median income for a family of four.

For those earning half the median income -- $51,000 -- only 2.6 percent of the market-rate housing stock was considered affordable, meaning people at that income level would spend 30 percent or less of their income on housing.

The percentages were higher if a family could move from one town to another within the region, but the housing market's gains have erased even those opportunities, the study found.

Since 2000, housing prices have essentially doubled in Greenwich, Norwalk and Stamford, but incomes have risen much less -- about 13.5 percent for the region. Sales price increases for all eight towns studied rose 74 percent for single-family homes and 73 percent for condominiums.

The study attributed the overall shortage of government-regulated assistance to a reduction in government spending on affordable housing, combined with increased land and construction costs in the urban areas near mass transit and already densely developed areas where the authors said affordable housing makes the most sense.

"There's just not enough money to build affordable housing, that's why it's not being built," Malloy said. "The two levels of government -- state and federal -- which were responsible for building affordable housing for the last 70 years, have largely withdrawn from the market place.

"For communities that don't want to build it to begin with, that becomes a great excuse."

Malloy acknowledged that the reconfiguration of Southwood Village taught the city lessons about replacing subsidized housing. The Board of Representatives passed a one-for-one replacement ordinance after criticism that the replacement, Southwood Square, created fewer units than the original complex. It requires construction of one affordable unit for every government-subsidized unit that is torn down.

The reduction that the study attributes to the Southfield Village replacement does not account for the fact that a large percentage -- Malloy estimated about 15 percent -- of the complex was vacant because so many apartments were uninhabitable.

"Do I feel bad about Southwood? The answer is no," he said.

The study also made direct connections between the shortage of affordable housing and the area's transportation gridlock. As jobs increase in Stamford and Norwalk, workers have had to travel farther to get to their jobs because housing production has not kept pace with job growth.

The report recommends local and state leaders evaluate 22 areas in the eight municipalities for more dense development. The areas are either near existing train stations, in areas that are served by bus routes or could be, or are already more densely developed than surrounding areas.

The study recommends state and local governments pursue density bonuses and other incentives for developers to create affordable housing in those areas.

Other recommendations include SWRPA becoming an affordable housing information clearinghouse in its role as the region's main intergovernmental planning agency, and urging lenders to create more flexibility in mortgages so home buyers can borrow more within acceptable limits.

Carty urged caution on increasing the percentage of household income that lenders allow to go toward mortgage and housing costs, saying that was part of the problem that has led many less-qualified borrowers into default in the current subprime mortgage crisis that has roiled the stock markets.

"You don't want people one paycheck away from disaster," she said.

Instead, lenders should consider 40-year mortgages, which spread out payments for much longer. Buyers don't build equity as fast, she said, but they can afford much more home in an expensive market.

- The study is available on SWRPA's Web site, www.swrpa.org.