Hartford Business Journal

8 HARTFORDBUSINESS.COM | NOVEMBER 2, 2026 The historic row homes at 5 Front St. in Brooklyn were renovated into 15 apartments with financing from Capital for Change. Photo | CoStar Smaller Scale Lower-cost loans help CT developers expand affordable housing management and ownership strategy. Participants typically purchase properties with fewer than 20 units, and most buy buildings with fewer than 10, Smith said. "They're repairing them and either holding them to own and operate them- selves or to sell them," she said. A family venture For the Kemps, experience managing rental properties in the area helped shape their approach to the Brooklyn project. The family also owns a self-storage facility in Plainfield, and Carl Kemp has a long background in construction. "We get feedback from potential tenants of the conditions of other housing in this part of the state," he said. "And the big picture is there's a lot of rundown New England housing, kind of inadequate and not always safe. I knew there was a demand for people looking for safe, clean, nicely put together apartments." Martha Kemp-Neilson, 25, is a recent graduate of Ithaca College and is pursuing a master's degree at New York University's Schack Institute of Real Estate, with a focus on finance and asset management. "I'm trying to learn different tech- niques that I can use so that we can run the building more efficiently, and so that we are able to continuously reinvest into the building to maintain the condition," she said. Kemp-Neilson said the Brooklyn project — her first foray into develop- ment — was an enjoyable experience. "Seeing the building all boarded up and looking sad on the street and then being able to revitalize it," she said. "It just comes to life when you add plants and decorate the facade of the building. It really changes the way the whole street looks." The father-daughter team isn't finished with small-scale development. They now have their eye on a 16-unit building in Hartford. For Smith at Capital for Change, the Kemps are the kind of developers she'd like to encourage in Connecticut. She said she would also like communities around the state to shift their vision from housing as a social service to housing as economic development. "Housing is real estate," she said. "I'd like to see it integrated more into the conversation around what it adds to economic development, how it improves communities in a really literally valuable way." By Harriet Jones hjones@hartfordbusiness.com W hen the father-daughter development team of Carl Kemp and Martha Kemp- Neilson found a boarded-up building on Front Street in Brooklyn, Connecticut, that was headed to foreclosure auction last year, they saw an opportunity to create affordable housing for the Quiet Corner town. The historic row homes were originally built in the 1880s as workforce housing for the nearby Quinebaug Mill. The Kemps renovated the 16,000-square- foot property in eight months, creating 15 two-bedroom apartments that were all leased this summer within about 60 days of completion. Helping make the project possible was a $1.72 million loan from Wall- ingford-based Capital for Change, a community development financial insti- tution that provides lower-cost financing for affordable housing and other projects in underserved communities. The loan carries a fixed interest rate for 30 years and helped finance the Kemps' $800,000 purchase of 5 Front St. and the renovation work. Carl Kemp said that kind of long-term, fixed-rate financing can be difficult to secure for commercial properties. The loan also helps the owners keep rents affordable. As Connecticut struggles with a housing shortage, Capital for Change sees smaller developers and lower-cost financing as a way to expand affordable housing in communities where larger developments may face resistance or infrastructure constraints. "It's … affordable housing in a place that you wouldn't normally find it," said Capital for Change CEO Diane Smith. The Kemps' proposal was not the first to try to create much-needed housing out of Brooklyn's vintage industrial infrastructure. A 2024 development proposal would have turned the 34-acre Quine- baug Mill site into 180 new housing units, but the plan from an out-of-state developer was scrapped because of the strain it would have put on the town's sewer infrastructure. For Smith, the Kemps' project fits Capital for Change's philosophy of meeting communities where they are. About 8% of Brooklyn's housing stock qualifies as affordable under state law — below the 10% threshold that generally exempts municipalities from the state's affordable housing appeals procedure. "If you're a small town like Brooklyn, you're not going to want a 300-unit development in your town. It doesn't fit," Smith said. "Those are the things that I think that some of the smaller towns are more concerned about, having these giant developments that don't feel like they've evolved from the community." Financing smaller projects Capital for Change is Connecticut's largest community development financial institution, or CDFI, and one of 12 in the state. These federally certified lenders provide low-cost capital to low- and moderate-income communities and households. Most of their financing comes from banks that lend funds to CDFIs at low rates to help meet their obligations under the Community Reinvestment Act. The CDFIs then finance projects at interest rates generally 2 to 2.5 percentage points above what they pay to borrow the money. CDFIs also channel federal and state funding. Since 2014, the Connecticut Housing Finance Authority (CHFA) and the state Office of Policy and Manage- ment have invested more than $19 million through the Small Multifamily CDFI Loan Program, partnering with CDFIs to rehabilitate nearly 400 units across 89 properties. Last year, the CHFA board approved an additional $10 million in funding and expanded the program's scope to include single-family homeownership projects. Smith, who became Capital for Change's CEO in 2023, has worked in housing for about 30 years, including positions at the state Department of Economic and Community Develop- ment and CHFA, where she was even- tually director of planning, research and evaluation. She described smaller multifamily developments as the bread and butter of Capital for Change, pointing to reha- bilitation work on Hartford's so-called Perfect Sixes — early 20th-century dwellings with three floors, double bow-fronts and six apartments. The organization is also working to expand the ranks of developers who take on these projects. It has graduated three groups from its new Emerging Developers Resource Initiative, which offers classes in site selection, due diligence, budgeting, financing, project Diane Smith Father-daughter development team Martha Kemp-Neilson (left) and Carl Kemp. Contributed Photo

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