Norwalk committee debates how to spend $2 million housing account, weighing grants, loans and rehab priorities

Norwalk’s ad hoc affordable housing committee met in April to begin shaping how the city will spend a housing account funded by developer payments in lieu of providing workforce housing units. Staff said the fund now contains a little more than $2,000,000 and must be spent on “eligible” hard costs defined by state statute and local ordinance.

The committee’s discussion focused on who should be eligible, whether awards should be grants or loans, and what projects to prioritize. Staff member Steve Cleppin briefed the panel on possible eligibility criteria and scoring approaches and emphasized that the fund could be expended quickly without clear prioritization.

Cleppin told the committee that under the city’s rules developers of multifamily projects (three or more units) may either provide units at specified affordability levels or pay a fee; the city has collected the fees into the housing account. “By statute, those funds can only be used for specific things,” Cleppin said, explaining that the ordinance that created the account mirrors statutory limits and gives the committee authority to define application and award processes. He estimated the account balance as “north of $2,000,000.”

Committee members pressed on trade-offs. Some members said the money should stretch by recycling funds through loans; others said grants will better serve low-income residents who could be harmed by additional debt. Council member Nicole Ayers and others stressed using the fund to repair and preserve existing affordable housing stock — including units that are deed-restricted and naturally occurring affordable housing in South Norwalk — rather than only subsidizing new construction. Council member Darlene Young said rehabilitation of existing units should be a top priority and noted deed restrictions would likely be required in exchange for funding.

Members discussed program design features staff proposed: a minimum-project-size exemption to avoid excluding “missing middle” developments (small projects up to about 10 units), requirements that workforce units be distributed evenly within developments, documentation of other funding sources, and a timeline requirement so projects do not languish. Cleppin suggested using a points-based scoring matrix for transparency and comparability across applications.

The group debated caps and targeting. Some members favored smaller awards to many projects to increase reach; others noted larger projects can achieve lower per-unit costs, which could be a better return on investment. Council member Goldstein and others singled out mid-sized multifamily projects (for example, projects similar to a current 24 Berkeley Street development) as types that the fund could help move forward. Council member Nicole Eady and others urged that conversions of underused commercial properties to affordable housing be considered, with incentives to encourage affordability rather than luxury conversions.

Committee members also discussed program delivery options and administrative overhead. Cleppin recommended grants over loans to limit monitoring requirements, though he said loans remain an option. The committee asked staff to return with a draft application and scoring matrix that responds to the committee’s priorities — particularly preservation/rehabilitation and conversions — and to clarify program management, deed restriction requirements and any per-project caps.

Procedural items: the committee accepted the March 20 meeting minutes as corrected (motion made by Council member Nicole Ayers; outcome: approved; no objections or abstentions recorded) and voted to reverse the order of the agenda to consider the housing account discussion first (motion made by committee member Nicole Eady; outcome: approved; no objections or abstentions recorded).

The committee made no final awards or decisions at this meeting and directed staff to draft application materials and possible scoring criteria reflecting the deliberations. Staff and committee members flagged outreach and publicity as a priority once application rules are set, so developers and local organizations know how to apply.