Old Lyme – Town officials are encouraging affordable housing, one 3-acre lot at a time.

The Board of Selectmen, based on the recommendation of the Old Lyme Affordable Housing Commission, will be selecting a nonprofit developer to construct two houses adjacent to hundreds of acres preserved as open space.

Affordable Housing Commission Chairman Michael Fogliano said his group explored two “highly experienced” local organizations: Essex–based Hope Partnership and Habitat for Humanity of Eastern Connecticut. The list was reduced to one when HOPE deferred to Habitat as the more appropriate partner.

First Selectman Tim Griswold said the Board of Selectmen will likely hear from the public and endorse the town’s affordable housing partner at its June 5 meeting.

The land to be developed comprises six acres at the end of Flat Rock Hill Road set aside for affordable housing as part of a 2019 open space deal. The $600,000 purchase resulted in the creation of the 312-acre McCulloch Family Open Space trail system on the eastern side of Whippoorwill Road extending north of Interstate 95.

The deal cut by members of the Open Space Commission included two lots at $50,000 each to be turned into affordable housing by September 2024. The purchase agreement stipulated that only one, single-family home could be built per parcel.

The other development option would have been for the town itself to go into the affordable housing business. That means building the houses and selling them at affordable rates with deed restrictions to keep sales prices down going forward.

Fogliano said the commission decided there were others better suited than the town to own the project.

“We don't necessarily have the expertise within town government to do it,” he said. “And that was juxtaposed with having two potentially highly experienced and highly qualified partners. So we went the partner route.”

Habitat for Humanity of Eastern Connecticut executive director Sarah Lufler described those in her organization as excited about the potential partnership.

“It’s gorgeous,” she said of the property after a recent visit. “It’s close to 95. It’s a great place for a family.”

The group has 107 houses built or currently under construction, including active projects in Norwich, Willimantic, Ledyard and Montville. The houses are affordable in part because the homeowners themselves, along with a large swath of volunteers, serve as the construction crew.

“We work alongside vendors and residents and families and friends to provide housing opportunities for folks who are ready for homeownership,” she said. “So I think it’s a terrific opportunity for the community to come together and work alongside us.”

She said the organization has built three houses in Lyme and three in East Lyme, but none yet in Old Lyme.

No HOPE

HOPE Partnership executive director Karla Lindquist this week said the project is not aligned with her group’s mission.

“Single-family homes are not HOPE’s model,” she said. “It is Habitat for Humanity’s model.”

HOPE is currently focused on building apartments and houses for multiple families through developments like a neighborhood of 16 houses in Old Saybrook and 17 apartments mixed with commercial space in Essex.

The group several years ago proposed a 37-unit housing development on Neck Road near Interstate 95 in partnership with the Women’s Institute for Housing and Economic Development. They ultimately withdrew the proposal based on "intense" local opposition.

HOPE owns the land underneath three houses in town currently. It’s part of an affordable housing model through which the houses themselves – built in the early 1990s by the grassroots Old Lyme Affordable Housing Corp before it merged with HOPE – are marketed to low-income households under the terms of an agreement limiting the profit owners can make when it comes time to sell.

Two of the existing HOPE properties are next door to the two proposed affordable homes on Flat Rock Hill Road.

A house is considered affordable when those making less than 80% of the area median income spend no more than 30% of their income on housing-related expenses like the mortgage, utilities and taxes.

In Old Lyme, a family of four making $90,080 a year would qualify for affordable housing.

The town’s plan for affordable housing, published last year as required by state law, found 935 households, or 29%, fell into the low-income category.

Only 1.57% of the town’s housing stock is affordable by state standards, according to the most recent data from the state Department of Housing. Most of those homes are for older adults.

The Affordable Housing Commission last year received a $150,000 grant through the town’s $2.16 million allocation of pandemic-relief funds. Fogliano said the nonprofit partner can use the grant money for expenses including a $100,000 reimbursement to the town’s Open Space Fund to cover the original purchase price.

The Affordable Housing Commission is also recommending the formation of a steering committee to guide the process from start to finish. The recommended membership includes professionals in affordable housing development, finance, fundraising and law, as well as representatives from several boards and commissions.

Fogliano said the project will be the first affordable housing project in decades.

“It does represent the opportunity to break a 20-year drought in affordable housing in town, which we’re very excited about,” he said.

e.regan@theday.com