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Representative Luxembourg proposes 'Propel CT' housing authority to buy existing units and create permanent affordability
Summary
Representative Jeff Luxembourg outlined "Propel CT," a proposal to revive a housing authority within CHFA seeded with $25 million to buy existing housing, deed-restrict units, and recapitalize the fund with rental income to scale permanent affordable housing.
Representative Jeff Luxembourg told the Housing Committee he is sponsoring a proposal he calls "Propel CT," which would reconstitute a housing authority within the Connecticut Housing Finance Authority to acquire existing housing — rather than primarily build new units — and hold those units as permanently deed-restricted affordable housing.
"Propel CT acts like an affordable housing real estate investment trust," Luxembourg said. Under his proposal, the authority would be seeded with a one‑time $25 million bond allocation, leverage CHFA lending and private bank lending, acquire residential units across the state and lease them to qualified tenants, and re-invest rental income to buy more units.
Luxembourg said purchasing existing units can be far less expensive per unit than building new affordable housing. He told the committee existing units in some Connecticut markets can be bought for far less than the $300,000–$500,000 cost he and others cited as the per‑unit price of newly built affordable units in the state. Using vouchers and wrap certificates, Luxembourg said, can help fund recurring rent streams that allow the authority to repay debt and expand the portfolio.
Members of the committee and other witnesses asked detailed questions about governance, leverage, projected returns, oversight and potential tax impacts on municipalities. Representative Lauren Corbus (sic in transcript: Corvus) asked whether private market REITs already operate in this space; Luxembourg said affordable housing REITs exist, and he envisions Propel CT returning more modest annual yields (he estimated 4–6% in testimony) than private REITs so the vehicle can balance social mission and financial returns.
Luxembourg said the authority could buy multifamily houses, three‑family homes where one unit is deed‑restricted, and mix market rate and deed‑restricted units to achieve financial viability. He suggested that federal housing vouchers and state wrap certificates could be redirected in part to recapitalize the fund rather than channeling all those dollars to private landlords.
Committee members asked about oversight mechanisms and whether CHFA, DOH, or the state treasurer or legislature should have seats on the authority's board. Luxembourg said the proposal would benefit from committee feedback and that he envisions fiduciary oversight and tenant protections built into the governance structure.
No formal vote occurred at the hearing. Members asked staff to explore statutory language and fiscal implications and to get more data on comparative costs and models from Maryland and other jurisdictions cited in testimony.
