The Board of Alders approved tax breaks for two residential building projects aiming to add 219 new apartments—105 at “affordable” rents—to Dixwell.
The board also voted to drop, at the developer’s request, a proposed tax break deal for a Ninth Square project.
Local legislators took those three votes Thursday night during their latest bimonthly full board meeting, which was held online via Zoom and YouTube Live.
The votes came just a week after two aldermanic committees held joint public hearings on the proposed deals that offered a view on how the city is currently using local tax incentives to promote affordable housing.
“This is what the Board of Alders has committed to this term, last term, and probably going forward about affordable housing,” Beaver Hills Alder and Community Development Committee Chair Brian Wingate said Thursday night. “I ask my colleagues for their support.”
The two deals approved by the Board of Alders Thursday were for:
• A planned new 150-unit apartment building to be constructed at 291 Ashmun St., 309 Ashmun St., and 178-186 Canal St. by the local firm RJ Development & Advisors LLC. One-third of that project’s total apartments will be set aside at affordable rental rates.
• And a planned new 69-unit apartment building to be constructed at 316 Dixwell Ave., 340 Dixwell Ave., and 783 Orchard St. by a partnership between the Dixwell neighborhood developer Beulah Land Development Corporation and the New York City-based HELP USA. Eighty percent of that project’s total apartments will be set aside at affordable rental rates.
The third deal that was dropped by the alders Thursday was for a planned new 60-unit apartment building that the Boston-based Beacon Communities intends to build on a surface parking lot at 300 State St.
Fair Haven Alder and Tax Abatement Committee Chair Jose Crespo said that a Beacon representative requested earlier on Thursday that the alders “leave to withdraw” the proposed tax abatement deal they had been seeking for the project.
Beacon Director of Development LeAnn Hanfield told the Independent by email that the builder put a pause on seeking a local tax break for this project because it has decided not to apply this year to the Connecticut Housing Finance Authority for 9 percent Low Income Housing Tax Credits.
“Given that we will not be applying to CHFA this year, we are not pressed for immediate decisions and have time to refocus our efforts on how best to move this project forward ahead of a 2021 CHFA submission,” she wrote. “We will continue working to develop a viable financing package for 300 State with the City’s support and look forward to furthering this important initiative.”
150 Apartments Planned For Ashmun-Henry-Canal
The Development and Land Disposition Agreement (DLDA) for the RJ Development project freezes local property taxes for the 50 dedicated affordable units at $400 per apartment for the first five years of the 15-year deal. For the remaining decade, that $400 per-unit cap will increase by 3 percent per year.
The DLDA also requires the developer to pay the city $500,000 in exchange for the publicly-owned 1.7-acre lot that sits immediately adjacent to the Farmington Canal and near Science Park.
Downtown Alder Abby Roth was the sole alder to speak up in opposition to the tax break.
“This amount is too low compared to other affordable housing projects,” she said about the $400-per-unit cap and the initial five-year freeze on that cap. “Given our city’s financial challenges, it’s critical to ask the developer to contribute more.”
Roth lamented the fact that the city does not have a “clear standard” for how much of a per-unit tax break to give to developers looking to build affordable housing. She also noted that the planned 150-unit apartment building will have a significantly smaller share of its overall housing units set aside at affordable rates than will the Beulah project (see more below), and yet it is receiving a better local tax break deal because the developer is not seeking state and federal subsidies.
Roth also pointed out that the city recently granted a tax abatement deal to another planned affordable housing complex at 16 Miller St. that capped property taxes on affordable units at $700 each.
“We should be incentivizing all developers to seek state funding vs. city funding” when looking to develop affordable housing, she said. That way the public subsidy for such development is spread across all of Connecticut, and not just New Haven taxpayers.
And Roth criticized the developer for not providing the alders with underlying financial information that would justify the local tax break. “He just stated that it was needed.”
The planned development’s 50 affordable units will include 25 set aside for renters earning no more than 80 percent of the area median income (AMI), 15 for those earning no more than 60 percent AMI, and 10 for those with Section 8 Housing Choice Vouchers. The remaining 100 units will be rented at market rates.
In a subsequent voice vote, an overwhelming majority of the alders voted in support of the deal, with Roth and East Rock Alder Anna Festa voting against.
69 Apartments Planned For 340 Dixwell
The Beulah tax break deal and DLDA, meanwhile, caps local property taxes for that project’s 55 dedicated affordable units at $400 per apartment, with a 3 percent increase per year over the course of the 15-year deal.
The public land deal also requires the developer to pay the city $280,000 in exchange for taking over the city-owned property at 316 Dixwell Ave.
The developers said during an October aldermanic committee hearing that they plan on applying to CHFA this month for 9 percent Low Income Housing Tax Credits to help fund this project.
Prospect Hill/Newhallville/Dixwell Alder Steve Winter urged his colleagues to support the project, not just for its affordable set asides, but also for its environmentally friendly construction method.
“Its novel mass timber construction means that most of the structure is made entirely of wood,” he said, which should improve indoor air quality, reduce tenants’ utility bills, and allow the building to “store rather than emit carbon.”
The planned development’s 55 affordable units will be restricted to renters earning between 30 percent and 60 percent AMI. The remaining 14 units will be rented at market rates.
The alders voted unanimously in support of the tax deal and DLDA in a subsequent voice vote.