Eastern Connecticut legislators are protesting a proposal from the Connecticut Housing Finance Authority that they say could make it more difficult to build affordable housing in the region.

The CHFA is considering a change to its qualified allocation plan (QAP), which “is the policy document that governs the allocation of the Federal low income housing tax credits in CT for affordable housing,” according to CHFA Executive Director CEO Nandini Natarajan. The change would institute “new rules governing how the state distributes millions of dollars in tax credits for affordable housing development,” according to state Sen. Cathy Osten, D-Sprague.

Osten explained why the rules could harm the development of affordable housing in the region in a news release.

“The CHFA has long emphasized opportunity score when deciding what affordable housing projects will receive state tax credits, thereby lowering the cost for builders,” the release reads. “Cities and towns are graded according to the degree of 'opportunity' in the surrounding community, usually defined as a town's school rating, its poverty rate, its proximity to community colleges, and its jobs-to-population ratio. A high opportunity score is desirable, and a low opportunity score makes it virtually impossible to receive state grants for affordable housing construction.”

New London, Windham and Tolland counties would be adversely affected, Osten argues, as under the new guidelines, 1% of the counties count as “high-opportunity” areas, compared to an average of 20% statewide.

A June 24 letter from Osten, also signed by Democratic state Sens. Norm Needleman, D-Essex, and Mae Flexer, D-Mansfield, and by Democratic state Reps. Christine Conley, D-Groton, Brian Smith, D-Colchester, Emmett Riley, D-Norwich, Kevin Ryan, D-Montville, Anthony Nolan, D-New London, Joe de la Cruz, D-Groton, and Susan Johnson, D-Windham, asked that the CHFA delay implementing the new rule. The CHFA did grant a one-month delay and review of the proposed change.

Natarajan said the plan “is reviewed on an annual basis, and changes, if any, reflect the affordable housing policy priorities of state of Connecticut, which change from time to time. Any changes to the QAP are required by Federal law to go through a public hearing/comment process.”

Osten took exception to Natarajan’s answer about the motivation for the rule change.

“I didn’t know that the new housing policy priorities were to ignore three counties in the state. That makes no sense to me whatsoever,” Osten said. “Eastern Connecticut gets ignored like that, so that’s not something we would agree with. We agree that we should have affordable housing all over the state.”

“CHFA’s Board voted to delay approval of the QAP at the last Board meeting,” Natarajan added. “We are convening a meeting with the legislators to listen to their concerns, and look forward to exploring their concerns in further detail.”

Osten said Friday that a meeting is planned for July 12, where she hopes to “reverse the decision that they have put forth to make sure Eastern Connecticut is given a fair shake at development.”

“A lot of people think affordable housing is low-income housing, it’s not,” Osten said. “It’s beginning workforce housing that the new teacher, the new police officer, or people working down at Electric Boat or the sub base (can afford). It’s not the old Section 8 housing.”

Local developments such as a mixed-income housing project in Stonington could be threatened, Osten said. She was alerted to the issue by Winn Companies, which is spearheading a proposed project in downtown Pawcatuck. The company told Osten in a letter that this new system, which changes the factors used in the scoring system, would disadvantage eastern Connecticut.

“The result is that under CHFA’s proposed policy, it will be virtually impossible for communities such as New London, Norwich and Stonington to compete for affordable housing resources,” the letter reads.

The company uses its own proposed Campbell Grain redevelopment in Pawcatuck as an example.

“Under CHFA’s existing policy, the location is treated as ‘high’ opportunity because of Stonington’s strong school system and low poverty rate, and the nearby availability of community college,” the letter reads. “This would position the project for tax credit financing, making the dream of a Campbell Grain redevelopment a reality. However, under CHFA’s proposed policy, the location will suddenly be treated as ‘low’ opportunity, which would put it at a strong disadvantage from the possibly of receiving tax credit financing. The quality of Stonington’s schools, the town’s low poverty rate and the availability of community college have not changed. What is changing is the way CHFA measures opportunity.”

s.spinella@theday.com