New Haven Independent

Harp, a prominent New Haven architect and builder, asked his question at the July meeting Thursday of the Connecticut Housing Finance Authority (CHFA).

CHFA, a quasi-public agency created by the State of Connecticut to lend money for affordable housing, held its July board meeting in New Haven City Hall, after which board members toured New Haven building projects with city officials.

CHFA officials defended the agency’s record but said Harp raised good points about the lack of minority developers building affordable housing in Connecticut.

CHFA’s directors also voted at Thursday’s meeting to grant Harp a six-month moratorium on principal payments on five affordable-housing developments — four in New Haven, one in Ansonia — in the interest of helping him make repairs and keep low-income families there.

Barriers Cited

CHFA began the meeting by inviting the public to speak. Harp was first in line.

Harp said he’d been waiting three decades to confront the board with its policies toward black and Latino housing developers.

“In my 30 years’ experience, I have been the only minority developer that I know, African-American or Hispanic,” doing business with CHFA, he said. He praised the board’s current leadership, as well as the lower-level staff he has dealt with over the years. But he said that top staff has historically put “impediments” in his way and blocked the ability of other developers of color to obtain CHFA financing for affordable-housing projects.

Click on the play arrow at the top of the story to watch a sample of his remarks.

When he got into the business in the 1970s and early ’80s, he wasn’t able to obtain loans by approaching CHFA directly through the “normal participation process,” he said. He had to enlist the help of then-U.S. Rep. Larry DeNardis and then-State Treasurer Hank Parker.

He gave an example of another “impediment”: He said CHFA charges him higher interest rates than it charges other developers. He pays 12.5 percent interest on his CHFA loans, he said; white developers pay as little as 5 or 6 percent.

As a result, he had to take out more loans to make his project work, Harp said. He has $4 million in debt from secondary funding on his current projects, while other CHFA-funded developers have been able to pay off their loans, he said.

CHFA officials shouldn’t have a “unilateral ability” to set different rates for different borrowers, Harp said. As a leading lender in cities, CHFA affects the ability of black and Latino professionals to succeed, “our ability to be contractors, developers, lawyers, architects,” he said. He stressed “the importance of diversity and opportunity in the housing field, which is a tremendous vehicle for the transfer of wealth and empowerment.”

He called for uniform lending rates. “”It’s almost as if the state of Connecticut, when it sets tax rates for gasoline, would choose to not tax gasoline, say in Stamford, let people buy it for a dollar, and in Hartford charge people three dollars,” argued Harp, who’s married to New Haven State Sen. Toni Harp.

CHFA’s policies hurt low-income families who rent from CHFA-backed projects, Harp said: Higher interest payments can lead to either higher rents or deferred maintenance.

Besides making its policies fairer, CHFA should proactively recruit minority developers to back, he suggested.

6-Month Time-Out

Interviewed after the meeting, CHFA Board Chairwoman Rolan Joni Young (pictured with Vice-Chair Tom Dubno) and CHFA Executive Director Tim Bannon defended the agency’s record.

They said interest rates on loans depend mostly on when they’re issued. Harp’s rates are higher than many other developers’, and lower than some others’, because interest rates in general were high when he obtained the loans.

Young agreed with Harp that there are too few black and Latino housing developers, not just in Connecticut, but nationally. Public and quasi-public lending agencies throughout the country wrestle with this problem, she said.

“It’s hard to define how to address it in a specific way” just through CHFA, she said.

She and Bannon did sympathize with the challenges posed to harp specifically by the high rates. That’s why the board voted to give him the six-month moratorium on some $200,000 remaining principal payments on the five projects.

The projects are the Robeson Elderly, Renaissance Hill, Legion Avenue, and Howard Apartments complexes in New Haven; and Ansonia’s Capitol Plaza. They have a total of 125 apartments.

Harp is current in his payments on the loans, Bannon said. The various loans expire soon.

According to the meeting’s agenda, Harp’s Renaissance Management Company reported that an “inadequate rental subsidy stream” at the projects have led to an operating deficit, and difficulty in making $1 million in needed capital improvements. The federal Department of Housing and Urban Development has also cited and fined the company “in connection with mandated lead paint removal activities which remain to be remediated.” CHFA estimated the five properties need a total of $5 to $6.7 million in repairs.

CHFA wants to make sure Harp has the money to make repairs — and to negotiate to enable him to keep the five projects affordable to subsidized families, Bannon said. Once the loans run out, Harp is under no legal obligation to, say, accept renters eligible for the federal Section 8 program.

The six-month moratorium gives CHFA and Harp time to come up with a plan. Harp will continue making interest payments during that time, according to the deal.