This article was produced in partnership with The Connecticut Mirror, which is a member of the ProPublica Local Reporting Network. ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

HARTFORD, Conn. — The moon pulls 6-year-old Romeo Lugo to the window at night.

The autistic child loves to gaze up at it, howling like a werewolf as it rises like a luminous pearl over the horizon of city buildings and trees he sees from his second-floor apartment.

But on one particular evening four years ago, his mother, Aida, noticed something else as they stood at the window: a man getting out of a gray car in front of their building and walking toward the nearby barber shop, gun drawn.

She grabbed Romeo and ducked.

“Bam, bam, bam,” Aida Lugo recalls hearing seconds later. “I couldn’t move.”

After the incident, the single mother explored moving from Frog Hollow — one of the state’s poorest and toughest areas. She even visited nearby towns. But the only units in her price range were located no more than a few blocks from the gunshots and the drug dealers in her neighborhood, so she remains marooned there — in the same apartment.

That’s because state officials have chosen, year after year, to direct the bulk of public funding for affordable housing to Connecticut’s most impoverished communities.

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Since the mid-1980s, almost $2.2 billion in low-income housing tax credits have been awarded to construct 27,000 affordable housing units in the state. Just 10% were built in prosperous towns, an investigation by The Connecticut Mirror and ProPublica has found. About 80% were located in struggling communities, literally erecting pockets of poverty. The rest fall somewhere in between.

While many state leaders across the country direct those credits to poor areas, arguing that’s where the need is greatest, Connecticut stands out on the national stage. In a recent federal study of 21 states, it had the second highest concentration of affordable housing in high-poverty neighborhoods, behind only Mississippi.

Today, Lugo’s unit is one of more than 700 apartments funded through the tax-credit program within a six-block area of her home. The neighborhood is host to a homeless shelter, a juvenile jail, public housing and a profusion of unoccupied storefronts and apartments plastered with “for rent” signs. On several utility poles are devices that notify police when gunshots are fired. Surveillance cameras abound.

“You know, you don’t have any other option but to try and get used to it and the things around you,” Lugo said. “I just keep to myself with my kids, and we do what we have to do.”

A vigil near Aida Lugo’s neighborhood in Hartford, Connecticut. (Monica Jorge for ProPublica)

Most of the funding to build affordable housing in the U.S. comes from the federal government, with states receiving a set amount of low-income housing tax credits, or LIHTC, each year based on their populations. State officials then decide how and where they are used.

Connecticut’s extreme concentration of affordable housing in poor areas owes largely to its selection process. The state requires developers to obtain local zoning approval before they even apply for a tax credit, a practice that has been flagged by federal regulators as potentially discriminatory. In May, The Connecticut Mirror and ProPublica reported that many zoning boards in the state rely on their finely tuned regulations to keep housing segregation firmly in place. The news organizations found that more than three dozen towns have blocked construction of any privately developed duplexes and apartments within their borders for the last two decades.

Developers, in turn, look to cities, where local leaders are often more receptive to any development that could help replace blighted properties or vacant lots. In Connecticut, that has meant a deepening racial divide in a state that’s home to some of the most segregated neighborhoods in America. According to the Connecticut Economic Resource Center, at least half of the homes in Lugo’s neighborhood are reserved exclusively for the poor. Nearly all of the residents of the area are Hispanic, like Lugo, or black, U.S. Census Bureau data shows.

“We have an affordable housing crisis and a segregated housing crisis. The state has opted to only address the affordable housing crisis,” said Erin Boggs, executive director and civil rights attorney with Open Communities Alliance, a nonprofit that advocates for housing reforms.

Gov. Ned Lamont’s administration says it favors a balanced approach, encouraging affordable housing both in “high opportunity” communities with good schools and low crime rates, and in more impoverished neighborhoods. “Connecticut recognizes the value of increased opportunity and growth in all of our communities,” the governor’s office said in a statement.

The numbers, however, tell a different story.

Gov. Ned Lamont. (Monica Jorge for ProPublica)

The Connecticut Mirror and ProPublica compared the location of LIHTC-funded units with so-called opportunity maps developed for the Connecticut Department of Housing by researchers at Ohio State University. Of the nearly $100 million in tax credits awarded by the state this spring, 88% of the new apartments will be in “low opportunity” areas. That means high crime, low homeownership rates, little access to working-class jobs and lackluster school performance.

Connecticut’s Democratic senators say they are troubled that so many of the tax credits are going to high-poverty areas. The tax credit program, they say, is long overdue for a reevaluation.

“It’s concerning, and I want to know why,” said Sen. Richard Blumenthal, in response to The Connecticut Mirror and ProPublica’s analysis. “I think we have to examine the reasons for it — whether they are economic or discriminatory — and determine whether there are remedies necessary and appropropriate.”

Sen. Chris Murphy added: “I think we should be spreading out low-income housing tax credit dollars to projects throughout the state. You’ve got to give people choice. Folks that have lower incomes or need rental support shouldn’t only have a handful of neighborhoods in Connecticut’s cities as their only housing options.”

Meanwhile, developers say they are just building what the state is most likely to fund. At the same time, they are conflicted about constructing housing reserved for the poor mainly in poor communities.

“To be honest, this system discriminates against poor people. You are forcing these people to live in communities that don’t have the level of resources needed to educate their kids,” said John McClutchy, founder of JHM Group, which is one of the largest recipients of tax credits in Connecticut. “We are looking to build housing that better reflects the community. … It shouldn’t just be warehousing poor people.”

The construction site of a new subsidized development in Lugo’s neighborhood. (Monica Jorge for ProPublica)

Housing Segregation by Formula

Created by Congress as part of a massive tax overhaul during the Reagan administration, the low-income housing tax credit was designed to lift the poor amid surging home prices.

By many measures, it was a success. Since 1987, the tax credit has funded the construction and rehabilitation of more than 3 million apartments for the poor — 30% of the country’s affordable housing units. Conservatives and liberals alike lauded the program. But over time, housing advocates and civil rights groups say, officials in some states funneled a disproportionate amount of credits to poorer communities.

In 2008, a community group in Texas pressed that case against the state’s Housing Department, arguing in a lawsuit that the agency had violated the Fair Housing Act by concentrating low-income housing tax credits in the Dallas metro area. The U.S. Supreme Court agreed, ruling that there are limits to building subsidized housing in mostly impoverished neighborhoods because the practice has a “disparate impact” on minorities.

Questioning how and where credits are awarded “may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping,” wrote Justice Anthony Kennedy in the majority opinion in 2015.

Meanwhile, the IRS, which oversees the LIHTC program, cautioned states in the waning days of the Obama administration against requiring local approval for affordable housing projects. Giving what is essentially a “local veto” to municipal leaders, the agency found, is “perpetuating residential racial and economic segregation.”

Some states made sweeping changes. In Maryland, for instance, housing officials settled a long-running dispute with a community group in Baltimore, agreeing to stop requiring local approval and promising to open 1,500 LIHTC-funded apartments in prosperous neighborhoods.

But in Connecticut, efforts to overhaul the system stalled.

A “for sale” sign in front of neglected property in Lugo’s neighborhood. (Monica Jorge for ProPublica)

State Rep. Jason Rojas, a Democrat from East Hartford and the chair of the House’s powerful tax-writing committee, proposed legislation in 2015 and 2016 that would have reserved at least 60% of the tax credits for developments in wealthier areas. Despite support from the state’s Latino and African American commissions and numerous other civil rights organizations, Rojas faced stiff opposition from his own party. Leaders argued that such a monumental change would do nothing to solve the problem of local opposition.

As a compromise, the Connecticut Housing Finance Authority — the agency that administers the tax credit program — tweaked its grading system for LIHTC projects. (The Housing Finance Authority is separate from the Department of Housing.) Evaluated on a point scale, developments in “areas of opportunity,” or ostensibly better-off communities, would now receive additional points in the annual selection process.

The Lamont administration has endorsed that approach. Seila Mosquera-Bruno, the state housing commissioner and chair of the Housing Finance Authority board that awards the credits, says the extra points are “precious when applying.” “I think that the points that are there for building into these high opportunity areas are allowing to do a little more,” she said.

The new formula, however, has not produced much change. Developers must still win local zoning approval before seeking the tax credits. “A lot of developers aren’t willing to take on that fight,” said McClutchy, whose developments are primarily located in high-poverty communities. “The roadblocks that the suburban communities put up cost time and money. I do not think there is an incentive to take that on.”

Applicants can still win points by proposing to preserve and expand rundown affordable housing or develop polluted land. Likewise, they are rewarded for proximity to daily public transportation. All are prominent features of urban areas.

Even the newer “opportunity” points are misleading, affordable housing advocates say. For example, a project can win points if it’s located within 10 miles of a community college — an incentive intended to place people closer to educational opportunities. In fact, such schools are generally located in struggling communities.

Projects in districts with good schools can also win extra points, but the housing agency’s list of such districts includes several that the state Department of Education has labeled as low-performing.

The result: Of the 20 projects awarded federal tax credits in the past three years, just one is in a “high opportunity” community, as defined by the Ohio State researchers. Located in the small shore town of East Lyme, the project of 56 affordable housing units broke ground recently — after six years of local opposition. That pattern seems unlikely to change anytime soon. Of next year’s tax-credit applicants, a single development is located in a “high opportunity” neighborhood.

“We are still warehousing low-income people, who are largely women of color with children, and putting them into neighborhoods where people with the ability to choose where to live do not choose to live,” said Cori Mackey, the executive director of the Center for Leadership and Justice, a grassroots organization that has raised attention to the subpar living conditions in Hartford. “The question is why does everybody but those who are poor have a choice about where to live?”

“We Lack the Political Will to Do Anything”

A home on Scarborough Street in one of Hartford's most affluent neighborhoods. The neighborhood sits blocks away from a slew of subsidized housing projects in the city's North End. (Monica Jorge for ProPublica)

The consequences of racial and economic isolation are stark.

Research shows people living just a few blocks from each other often have drastically different life outcomes. For example, the life expectancy of those who grow up in Lugo’s neighborhood is 12 years shorter than those living just 1.5 miles down the road in the middle-class town of West Hartford, according to National Center for Health Statistics data compiled and released by the Robert Wood Johnson Foundation.

Separately, a team from Harvard, Brown and the U.S. Census Bureau found that children in Frog Hollow were four times more likely to be imprisoned on April 1, 2010, than those over the West Hartford line. Nearly every student in Romeo Lugo’s elementary school is a minority and multiple grades behind in math and reading.

Rojas, the Democratic lawmaker, grew up in a similar neighborhood. Becoming friends with middle-class kids in his middle school was life-changing, he said, because it helped him think about his future differently and inspired him to go to college.

“I wouldn’t say success can’t come from places where there is a lack of social capital, or where there is significant racial and economic isolation, but we also know how much harder it can be when you live in a community like that,” Rojas said.

Some of his Democratic colleagues agree, arguing that the administration should diversify the locations of LIHTC developments.

“If you only build more of it in the cities, then you are never really addressing the problem of diversity and integration,” said state Senate President Pro Tem Martin Looney, D-New Haven. “There has to be a push to increase affordable housing in the suburbs.”

Those sentiments, however, are rare in the state legislature, where Democrats have held power for more than two decades.

State Rep. Brandon McGee, a co-chairman of the legislature’s Housing Committee, grew up in public housing and prefers the bulk of funding to go to places like his district in Hartford, where a tax-credit project broke ground this year. “Our people are living in some of the worst conditions I have ever seen in my life,” he said. “I do not subscribe to the mindset that you need to move out of Hartford to have a better life. … When you are talking about concentration of poverty — well, address poverty. You can’t run from it.”

For their part, GOP legislators are typically resistant to moves that could undermine local control and make it easier to build affordable housing in their districts. Former state Rep. Brenda Kupchick, a Republican from Fairfield who served as the ranking member of the legislature’s Housing Committee from 2013 to 2018, said she would not want to reroute the tax credit funding to build housing in well-off communities like hers. “I wouldn’t want to take money from urban neighborhoods that is helping them,” she said. Recently elected to Fairfield’s top post of first selectmen, she said the town has little land suitable to build and support affordable housing.

As a result, both parties are united in maintaining the status quo. “We lack the political will to do anything,” Rojas said.

State Rep. Jason Rojas of East Hartford. (Monica Jorge for ProPublica)

Efforts to link unrelated state funding to a town’s openness to affordable housing have gone nowhere. And, in fact, lawmakers have successfully pressed in recent years to weaken one of the few laws that encourages affordable housing — a measure that allows developers to bypass local zoning decisions by going through the courts if they set aside 30% of a project’s units for poor people. In 2017, the legislature passed a bill to make it easier for towns to win state-sanctioned waivers from the law. Support was so strong that lawmakers garnered enough votes to override a veto from then-Gov. Dannel Malloy.

Lamont, the state’s current chief executive, is a Democrat and a multimillionaire who owns a mansion in the wealthy town of Greenwich and multiple other properties in affluent communities. He has defended local control and avoided the politically thorny issue of exclusionary zoning, declining numerous requests over the last 10 months to be interviewed.

Lamont previously told The Connecticut Mirror his goal is to “work collaboratively with the locals in terms of what they want and what they are not willing to take. At the end of the day, that community will probably take the lead on making that choice.”

While some federal lawmakers are calling for a reassessment of the LIHTC program and stricter enforcement of anti-discrimination laws, executive action in Washington seems unlikely.

The Trump administration has proposed weakening the federal “disparate impact” rule — the legal doctrine at the heart of the landmark Supreme Court case. The change would effectively limit the ability of civil rights groups and others to challenge how states run their tax-credit programs.

“There are a myriad of considerations that go into where housing should be placed,” J. Paul Compton Jr., general counsel for the U.S. Department of Housing and Urban Development, told reporters this year. “It is not the department’s role to broadly dictate to the thousands of communities across America [and question] local decisions that are made in good faith.”

Unintended Consequences, Concentrated Poverty

Six years ago, Aaron Gill was looking for a place for his family. The engineer wanted to live close to downtown Hartford. On its face, nearby Frog Hollow seemed perfect. It was within walking distance of the train station, as well as the restaurants and theaters around the state Capitol, and several apartments were open.

There was just one problem. “The only options available had income restrictions on them,” Gill said.

If Connecticut’s distribution of tax credits has kept poor people in poor neighborhoods, it has also kept middle-class and wealthy people out. And housing advocates say that lack of economic diversity can deprive struggling communities of sorely needed investment.

Nearly all of the renovated homes and apartments in Frog Hollow, for instance, are reserved for low-income residents. That creates a barrier for thousands of potential residents working in the immediate area. Among the nearby employers are Trinity College, two hospitals and a host of state government agencies.

“The unintended consequences of some of these policies has been to reinforce the pattern of concentrated poverty,” said Melvyn Colón, executive director of Southside Institutions Neighborhood Alliance, a nonprofit that builds affordable housing in Hartford.

Each year, he too has to turn away a handful of interested buyers because they make too much money; his group receives state funding, and officials require the homes be sold to those who make below-average income.

The only housing stock left for others are aging properties.

Aaron Gill stands outside the building he purchased and renovated with his wife. He lives in the same neighborhood as Lugo. (Ryan Caron King/WNPR)

In Gill’s case, he and his wife ultimately purchased a rundown apartment building and renovated it. To make the finances work, they rented out the extra units and leased the ground floor, where entrepreneurs have opened a cafe and ice cream shop.

Gill acknowledges that he is the exception; few have the money or desire to become a developer just to live in the area. “This was a personal interest for our family. Instead of spending money on cars or clothes, we put all our money into this property,” said Gill, who is now a commissioner on the city’s planning and zoning board.

Nothing in the federal requirements for tax credits requires housing developments to be exclusively reserved for the poor; in fact, the rules allow as few as 20% of the units to be marked “affordable.” But developers say demand among middle-class and upper-income renters is weak in these struggling neighborhoods, so that pushes them toward higher concentrations of subsidized units.

“It is a lot easier to build a 100% affordable project than it is to build a mixed-income project,” said Dara Kovel, a former state housing official who oversaw the tax credits and is now a developer.

The Willow Creek development in Hartford. Of the 135 new apartments, 92% are reserved for poor residents. (Monica Jorge for ProPublica)

Connecticut’s point system also rewards projects that devote a large share of units to the poor.

For example, the state recently demolished a rundown and mostly abandoned public housing complex in Hartford’s Blue Hills neighborhood, about three miles from Frog Hollow. Officials awarded development firm JHM Group $35 million in federal tax credits and $18 million in state funding to build in its place Willow Creek, a series of smaller apartment buildings. Of the 135 new apartments, 92% are reserved for poor residents. McClutchy, the firm’s founder, says he would have preferred more income diversity, but added: “It’s a competitive process and you want to win, so you adapt.”

U.S. Rep. Jim Himes, a Democrat who represents southwest Connecticut, worked for a nonprofit that helped build affordable housing in Connecticut and elsewhere before he was elected to Congress. States, he said, should tweak their formulas to reward mixed-income developments.

“I think you should get more points for having forward-looking, mixed-use, mixed-income, sustainable projects,” Himes said. “That would be one way to deal with the challenge that in the previous generation you had isolated, concentrated developments. And those just don’t work very well.”

The lack of income diversity in many cities has resulted in a shrinking tax base to pay for schools, law enforcement and other infrastructure. On the verge of bankruptcy in recent years, Hartford scaled back its police force and trash collection of large items, leaving old mattresses and furniture littering Lugo’s neighborhood. Romeo is regularly sent home early from school when staff is stretched too thin, making it impossible for Lugo to keep a job. “School calls me all the time to pick him up. If I don’t pick him up, they see me as an irresponsible parent,” she said.

Mattresses and broken furniture sit outside in Lugo’s neighborhood. (Monica Jorge for ProPublica)

Some housing authority leaders and state officials defend Connecticut’s practices, arguing that the bevy of tax credits in poor areas have lifted struggling neighborhoods. “It has taken housing that cities have had to actually condemn as unfit for human habitation and transform[ed] a neighborhood,” said Karl Kidruff, who served as the executive director of the Housing Finance Authority during the previous administration.

He cited the city of Norwalk, about 70 miles south of Hartford. There, state officials awarded tax credits to raze old housing and develop new low-income units. A market-rate apartment building later opened across the street, he said. Kidruff doesn’t believe that would have happened without the injection of federal tax credits. He predicts that pattern will emerge in Hartford, too.

Research on the effects of the low-income housing tax credit is limited. One study, largely based on LIHTC properties in California and the country’s largest metropolitan areas, found that these developments can help low-income communities. Home values in struggling neighborhoods adjacent to the new affordable housing increased by 6.5% after 10 years, professors at Stanford University’s business school concluded. These properties also attracted some white homeowners to isolated communities, they found, resulting in “decreased segregation in lower income areas.”

The impact of affordable housing is not absolute, however, says Anika Singh Lemar, a professor at Yale Law School.

“The urban planning answer is that housing doesn’t revitalize,” she said. “It can be part of a larger revitalization strategy — imagine a plan that includes jobs, job training, infrastructure investments in grocery stores and day cares and other neighborhood amenities — but a housing development on its own doesn’t revitalize.”

Nowhere Else to Go

A street side vigil site in Hartford. (Monica Jorge for ProPublica)

In Frog Hollow, Lugo is still waiting.

A devout Catholic, she’s placed religious symbols around plants and toys in her apartment, as if to protect the family from the violence just beyond her door. Reminders of the threats, however, are everywhere.

A mother whose daughter was killed outside regularly grieves over a makeshift memorial filled with notes, religious mementos and a drooping balloon. Bullet holes pock a neighboring building. The abandoned house next door was recently boarded up after two homeless sisters were raped inside. Police conducted multiple drug raids there, but the dealers haven’t really dispersed. Lugo blames neighborhood addicts for multiple break-ins of her basement storage unit. Someone recently stole Romeo’s bike.

Despite this, Lugo says she’s grateful for the apartment; her last place was infested with rats and roaches. “As a single parent, you struggle. I have to be grateful for what I have,” she said, noting pest control comes to her building monthly.

Lugo is rooting for the neighborhood’s comeback, imagining a time when Romeo can play outside. “I want to feel safe,” she said. “I want to feel that when I go to sleep each night.”

Lately, she’s been thinking about moving. Her older son will graduate high school soon, and she’d like to downsize. She’s eyeing one of the new tax credit-funded apartments greenlighted by the state last year.

They’re just around the corner.

Read More Separated by Design: How Some of America’s Richest Towns Fight Affordable Housing In southwest Connecticut, the gap between rich and poor is wider than anywhere else in the country. Invisible walls created by local zoning boards and the state government block affordable housing and, by extension, the people who need it.