AN ACT CONCERNING HOUSING DEVELOPMENT IN ENTERPRISE ZONES.

This bill specifies that Department of Economic and Community Development (DECD) grants to community development organizations in enterprise zones may be used to build or rehabilitate decent housing only for low- and moderate-income people.

Under current law, DECD community development grants in enterprise zones may be used to build or rehabilitate decent or affordable rental or owner-occupied housing. The bill eliminates the reference to “or affordable” and instead refers just to building or rehabilitating decent housing for low- and moderate-income people. Thus, it explicitly targets projects that may receive grants to those for low- and moderate-income people, as opposed to those for affordable housing, which potentially can serve people with slightly higher incomes (although current law on its face does not appear to exclude from grant funds projects for low- or moderate-income families).

“Affordable” housing includes housing for people with slightly higher incomes because Connecticut law defines affordability based on the proportion of income a family earns and spends on housing. By law, a housing unit is affordable if a family earning no more than the municipality's area median income (AMI), according to the federal Department of Housing and urban Development, pays no more than 30% of its income for the housing.

Low- and moderate-income housing, on the other hand, typically refers to residences for people earning 80% or less of AMI (with low-income referring more specifically to those earning 60% or less of AMI).

The law requires DECD to establish a financial assistance program for job development and creation, neighborhood revitalization, and business stability and development promotion in enterprise zones. DECD's commissioner must solicit applications from community development organizations (which the statute does not define) located in enterprise zones to operate the programs. Applicants must indicate a strategy to achieve neighborhood economic development in the zone.

Under the law, the commissioner must contract with and provide grants within available funds, to qualified community development organizations. The organizations may provide grants, loans, or deferred loans to eligible applicants. The law requires the DECD commissioner to set criteria for eligible applicants and activities.

The law explicitly authorizes 15 enterprise zones, all of which have been designated. It also authorizes the designation of additional zones under narrow criteria, and two of these have been designated. The municipalities with enterprise zones are: Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury, and Windham.

By law, these zones offer generally the same types of incentives—property tax exemptions and corporation business tax credits. In most cases, a business must improve property and create new jobs.

Yea

Nay

(03/10/2009)