Even with real estate downturn, affordable housing remains elusive in NWC

Despite a downturn in sales prices nationwide and in Connecticut, it was even harder last year to find affordable housing in most Northwest Corner towns, according to a comprehensive study released earlier this month.

Last year, 142 of the state’s 169 municipalities were deemed unaffordable by HOMEConnecticut, the legislative arm of the nonprofit Partnership for Strong Communities.  Seven towns in the Northwest Corner failed the same test, although some had made modest gains in affordability. Those towns are Cornwall, North Canaan, Norfolk, Sharon, Salisbury, Kent and Falls Village.

From 2000 to 2007, median home sales prices in Connecticut rose by almost 70 percent while personal income rose by only 34 percent. The disparity is largely the result of surging real estate prices in the state and in several towns in the Northwest Corner.

HOMEConnecticut determined affordability rankings by comparing median sales prices with median household incomes against the income needed to make a typical mortgage payment.

The town of Salisbury, for example, ranked as the 15th least affordable in the state in 2006. In 2007, Salisbury leaped to the 10th least affordable. Last year the median sales price of a home was $500,000 (up from $425,000 in 2006), while the median household income only rose to $64,697 from $60,870 during the same period. Yet in order to qualify for a mortgage to buy a home at the 2007 median price with 10 percent down, a buyer would need an annual income of $150,000, leaving a gap of more than $85,000.

Sharon’s gap, while significant, actually dropped to $41,628 from just over $46,000, while Kent’s is almost $35,000. Even North Canaan, long considered the Northwest Corner’s bastion of affordability, still has a gap of more than $13,000. In 20006, North Canaan’s gap was $21,751. The narrowing was directly attributable to the drop in median sales prices from $210,000 to $195,000.

“The bottom line is people can leave Connecticut, or stay here and have no disposable income,� said David Fink, HOMEConnecticut’s policy and communications director.

Fink added that the situation has worsened with the national credit crisis. So-called subprime mortgages, for example, rarely required a down payment. And the tightening of credit, combined with still-high real estate and rental prices, has put an incredible strain on the service industry workers who have become an increasingly vital part of the workforce.

“Where are these people going to live?� Fink asked. “The jobs created are not sufficient for people to afford to rent or own.�

Leo Gafney, spokesman for the Salisbury Housing Trust, sees the HOMEConnecticut study as confirmation of what he and other affordable housing advocates have witnessed for a generation. The nonprofit Salisbury Housing Trust, which has built or rehabilitated eight homes in the town, grew out of Salisbury 2000, a series of forums in which residents discussed ways to improve and preserve the quality of life in the town.

“It’s just another indication that regular people can’t really live here anymore,� said Gafney, a former school principal and education consultant. “But I was surprised we were in the top 10.�

It’s possible the HOMEConnecticut study exaggerates the disparity of income and housing in Salisbury because the median household income figure does not include part-time residents, but the median sales prices do include weekenders who purchase expensive homes in the town.

“But they drive up the [housing] cost for everyone,� said Fink, referring to part-timers.

Fink said his organization is also committed to increasing the availability of rentals in the state. The so-called housing wage — the hourly wage required to afford a two-bedroom apartment at fair market rent in Connecticut — remained high at $21.11.

A town of about 4,000 full-time residents, Salisbury only has between 60 and 70 rental units. And the town’s zoning code prohibits apartment buildings containing more than three units. There are a few buildings that contain more than three units, but they predate the regulation and are grandfathered in. Still, affordable housing advocates have cited the regulation as an impediment to increasing the number of available rental units.

Last year Fink was hoping for the passage of Bill 1057, which would have created powerful incentives for towns to build and allow affordable housing. Those incentives could have cost the state tens of millions of dollars. What affordable housing advocates got instead was considerably less.

The successful legislation offers towns payments for affordable units in newly created zones; payments for building permits issued in those zones; and technical assistance. Under the bill that was passed (SB 1550), those items will be paid for with $4 million in funds from a budget surplus that exceeded $900 million last year.

Gone, however, was the big-ticket item: the reimbursement for the net costs of educating the children of those who would live in the affordable housing. But Fink said at this point towns seem more interested in capital grants to help them with creating the housing than in educating the children who will live there. School enrollments are either flat or falling in most of the state anyway.