New Newhallville Home Sales Advance

Plans advanced to sell nine new city-built houses in Newhallville, amid questions at public meetings about whether the sales prices are truly ​“affordable” for the surrounding neighborhood.

The houses in question were recently constructed by the city’s Livable City Initiative and local builder Concrete Creations atop formerly vacant lots at 15, 23, and 27 Thompson St., and at 523, 531, 532, 535, 539, and 575 Winchester Ave.

They represent LCI’s latest efforts to build wealth and stabilize neighborhoods through the construction of new houses that are deed-restricted to low-to-moderate-income, owner-occupants.

During last Wednesday’s Board of Alders Community Development Committee meeting, committee alders voted unanimously in support of allowing the city to negotiate and enter into contracts of sale with prospective home-buyers for the nine publicly-funded properties.

That same night, the City Plan Commission also gave the proposed house-sale order a unanimous favorable recommendation — as well a condition calling on local legislators to make sure the sales prices truly jibe with the surrounding area.

The order now advances to the full Board of Alders for a final vote next month.

During the aldermanic committee hearing, Livable City Initiative (LCI) Deputy Director Cathy Schroeter (pictured) reported that six of the new houses will be sold for $215,000 to homebuyers earning no more than 100 percent of the area median income (AMI), or $92,800 for a family of four.

The remaining three new homes will be sold for $170,000 each to homebuyers earning no more than 80 percent AMI.

“All the homes carry a 30-year, owner-occupancy covenant,” she said. And each prospective buyer is vetted by the city to make sure that they will not have to pay more than 30 percent of their annual income on mortgage principal, interest, taxes, and insurance.

Schroeter said that the city originally had seven houses for sale at $215,000 and two for $170,000. LCI subsequently moved one from the former to the latter sales price in an effort to make the overall project ​“a little bit more affordable for homeowners.”

She said all nine houses were listed with two local real estate agents, and that seven of the houses are currently under contract pending Board of Alders approval. Those seven houses only received one qualifying applicant each, she said. The remaining two houses received two qualifying applicants each, and will therefore be raffled off in a lottery between the two candidates to be held Monday morning.

How long exactly do the homebuyers have to stay in their respective properties? asked Dwight Alder and Committee Vice-Chair Frank Douglass (pictured).

“There’s a 30-year restriction on it,” Schroeter said. That means that each house must be owner-occupied for three decades. If the initial buyer sells the property before that 30-year term is up, they must sell it to another owner-occupant. ​“It will be monitored as such for 30 years,” she said.

When do you expect these houses will actually be sold? asked Wooster Square Alder Ellen Cupo (pictured).

Likely between January and March, Schroeter replied. ​“Most of them have precommitments,” she said. ​“But they can’t get final commitments on their lending because of a stipulation in the contract of getting Board approval” first. Thus her appearance before the committee Wednesday night.

How might the current Covid-19 spike affect this timeline? Cupo continued. ​“Do you anticipate this might affect sales,” especially if the worsening pandemic causes prospective homebuyers to lose their jobs or have their incomes cut?

“I don’t foresee an issue with these homebuyers,” Schroeter said. ​“Some of them work for Yale University. Some of them own their own businesses. They have hung in here this long with us, since May or June, when we were first offering the houses.”

Plus, Schroeter said, each of these houses is a two-family with a potential rental component. Even though bringing in rental income is a possibility, Schroeter said she has not factored that potential secondary income source into her calculations of qualifying-income levels for the homebuyers.

“If they get a tenant and the tenant can’t pay rent, they can still afford their mortgage,” she said.

Out Of Neighborhood Range?

The City Plan Commission also unanimously supported a final approval of the city entering into sales contracts with prospective homebuyers for these nine new publicly-funded houses.

The commissioners added to their approval a recommendation that local legislators take a close look at the sale prices to ensure that they are realistic for the actual income levels of people who live in the city of New Haven.

That prompt came thanks to the questioning of Commission Vice-Chair Leslie Radcliffe.

“The sale price of these homes has given me some concern as to who would be able to afford these homes in the neighborhood.” She pressed for clarification that all of these are indeed two-family houses with rental options.

“If there are two units with rental possibility, that makes getting a mortgage a little bit easier because you have rental income,” she said. ​“But a family of four with an income of $92,000 is quite frankly out of range of the average family of four for the city of New Haven.”

City Economic Development Administrator Michael Piscitelli confirmed that all nine houses are indeed two-family properties. He reiterated the 30-year covenants requiring owner-occupancy for at least three decades. And in addition to the AMI restriction, he said, prospective buyers can also take advantage of the city’s first-time homebuyer assistance program.

Ultimately, the commissioners voted in support of favorably recommending the home-sale order to the board, with the request of taking another look at the $170,000 and $215,000 sales prices.

“Creating housing that’s wholesome and affordable is a key policy goal of many of us in government,” said Westville Alder and City Plan Commissioner Adam Marchand. ​“I think converting big lots into homes that can be purchased by people that have modest means is really good policy.”