Creating Affordable Homeownership Opportunities in Connecticut

We speak with Joan Carty who has been HDF’s President and CEO since 1994. The Housing Development Fund is a Connecticut- based Community Development Financial Institution (CDFI) that focuses on financing the development of affordable rental housing and helping low- and moderate-income households become and remain first time homebuyers. “This is accomplished through a number of innovative programs that provide both down payment and closing cost assistance, as well as education and counselling,” Joan explains. Their ultimate goal is to help hard-working families and individuals find quality and affordable housing in an increasingly expensive Connecticut and New York market where they are often left out. We hear more about the amazing work Joan and her team do below.

What’s been the pandemic’s effect on real estate in Connecticut? Have you seen an increase or a decrease in the number of people looking to buy property?

One of the many unfortunate consequences of the COVID-19 pandemic is an increased demand for homes in Connecticut and New York. Home sales increased 18-20% over the past year, driven in large part by a huge influx of buyers leaving New York City and coming to Connecticut in search of more space. There is also extremely low housing inventory, which drives up prices. While this may have a benefit to current sellers in the short term, there are thousands of income-constrained families who are competing for the few homes that are still affordable to them. Sellers are receiving multiple offers, some of them over the asking price and low- and moderate-income households cannot compete.

What has this meant for HDF and the work you do there?

HDF will need to pivot and innovate in order to meet the needs of the Connecticut communities we serve. For example, we have utilised technology to provide counselling and lending services to clients remotely. In addition, we are anticipating the need for a robust foreclosure intervention program as the eviction and foreclosure moratorium ends in June. After the market crash in 2008, HDF provided foreclosure intervention counselling to people who were in danger of losing their homes to foreclosure with the goal of helping homeowners keep their homes. We have been awarded some start-up grant funding and have launched an updated version of that program.

Home sales increased 18-20% over the past year, driven in large part by a huge influx of buyers leaving New York City and coming to Connecticut in search of more space.

Also, the economic fallout from the pandemic has deepened the need for more housing stock that people can afford, both rental housing and homeownership opportunities. To that end, HDF has launched a Community Land Trust, an initiative that is new to Fairfield County, Connecticut but builds on a successful model. HDF’s first CLT is in Stamford, Connecticut and will bring 22 condo-style homes that will be sold to very low-income families. These hard-working families will benefit from the financial security gained from homeownership. The Community Land Trust model allows HDF to place the land that sits under these condos into a trust, thus preserving the affordability forever. The CLT structure also allows HDF to sell the condos at prices far below the market rate since the cost of the land is removed from the sales price of each condo.

What are the challenges of being at the helm of a non-profit organisation in the financial sector? 

Our biggest challenge right now on the residential side of the business is that down payment assistance and counselling programs cannot alone help people buy their homes if there’s no inventory. That’s why we need new and creative strategies to create homeownership opportunities, like our Community Land Trust.

HDF also finances the building/rehab of affordable rental housing in the state. This is a lesser-known side of our business, but an essential one as there will always be a need for affordable rental housing and the interest income generated from this lending supports HDF’s operational expenses. HDF is constantly trying to raise awareness that we offer this type of financing.

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