Committee weighs finance model and Riverwood conversion as alternative to new construction

On June 8 the New Canaan Affordable Housing Committee discussed initial work on a financing model and the tradeoffs of converting existing Riverwood units versus new construction on sites such as the Lumberyard.

A committee member leading the finance discussion said they have prepared a mathematical model that shows how low-income housing tax credits and mortgage financing could interact but that it remains generic until specific project inputs are available. The model has been shared with Scott Hobbs and David McCarthy for feedback. "It's not a model that is useful at the moment because we don't have the inputs to it," the speaker said, adding it "works mathematically" but must be customized for each project.

Committee members focused on a potential Riverwood conversion study to calculate the net cost of paying down debt to convert market-rate units to income-restricted units. The speaker said conversions are easier operationally because the town owns Riverwood, but tax-credit rules and other factors may make conversion more expensive than building new. The group discussed a possible "tipping point" — roughly 40 to 50 percent, the speaker said—at which converting too many units would harm the performance of remaining market-rate units. "I don't know. I mean probably 40 or 50%. I don't I don't know the answer," the speaker said.

Members also discussed seeking Section 8 or other voucher programs to improve project economics; the committee reported an attempt to contact a group referenced in a separate application ("Braid Hill") about voucher applicability but had not received a response.

Next steps: the finance subcommittee will be convened before the next full committee meeting to refine the model, incorporate input from Scott Hobbs and David McCarthy, and calculate conversion scenarios for Riverwood. The finance subcommittee will prepare material the committee can use when advising the board of selectmen.