Construction vehicles will begin delivering new homes to low- and moderate-income residents in a project that could save thousands of lives.
In a statement Thursday, the Department of Housing and Urban Development said the construction of 100 housing units is expected to start by the end of 2018.
The housing would be located in the city of New Haven, Conn., which is a suburb of Hartford, Conn.
It will be the first time the government has built new housing for low and moderate income residents in Connecticut since 2010.
More than 1,400 people, most of them low-wage workers, will be living in the homes.
Housing Secretary John Sullivan said the program would be a boon to the city, which is grappling with the opioid crisis and other issues.
The Housing Authority of New England, which has a $2 billion contract to build the homes, is an alliance of housing companies.
Construction of the project began in June and is expected start in 2021, with the first units to be delivered in 2021.
The construction is part of a federal initiative known as the Low Income Home Affordable Revitalization Initiative, or LIHEIR.
Its goal is to improve the quality of life for low income households, Sullivan said.
It’s a win-win, he said.
“It’s an opportunity to make this a more equitable economy and to help New Haven residents achieve their aspirations of homeownership.”
The first LIHEIG project in the United States was in Detroit in the 1970s, when a government-subsidized program built houses for people on low incomes.
Sullivan said LIHEI is a “unique” program that provides financing and helps communities build their own housing, with help from the federal government.
The federal government paid $3.5 billion for the homes in the first phase of the program, but the state of Connecticut is responsible for construction.
The program has proven effective in cities like Detroit, Sullivan noted.
The average number of LIHEIs built per city rose from 10,000 in 2006 to 100,000 today, he added.
The total cost of the first six phases is expected at $40 billion, he estimated.
The city’s new home will be about 20 to 25 percent smaller than the current home it will replace.
It’s expected to have a two-story, six-bedroom home that has a swimming pool and a deck that can accommodate up to 50 people, Sullivan added.
The first homes will be delivered through a private company, which will provide the financing and provide oversight, Sullivan explained.
The cost of financing will be covered by the government, which can charge a one-time fee of $50 for a new home or $250 for a replacement home.
The new homes will come with a $250 monthly payment.
For those with incomes of $80,000 or less, the monthly payment is $125.
Residents will be able to apply for a loan and will be eligible to receive a $150 credit for the purchase of a home.
The amount can be waived if the property is used for a nonprofit or community service, Sullivan also said.
The project also will provide affordable housing to low income veterans.
Sullivan will announce the first of 10 affordable housing projects in New Haven next month.