The lack of affordable housing is a national crisis at the moment, but a new report from the Yankee Institute concludes that Connecticut’s attempt at encouraging it dates back decades.
The report traces the current situation back to former Gov. William O’Neill’s administration and the Blue Ribbon Commission on Housing in 1989. It says that a specific statute that says Connecticut towns must have at least 30% of its housing deemed affordable is not working properly. The statute known as Section 8-30g is: “a convoluted and counterproductive policy that imposes an all-or-nothing scenario on towns and cities and has made housing less affordable.”
The report goes on to say that “burdensome and costly regulations are a contributing factor to constrained housing supply, especially within the entry-level market where there is a pressing need for more inventory.”
There are fewer than 4,000 single-family homes and condos for sale in the state.
According to a 2021 National Association of Home Builders study, 19 costs from fees, standards and other requirements imposed at various stages of the development and construction process account for an average of $93,870 — or 23.8% — of the purchase price of a single-family home.
And from 2019 to 2021, the median wage in Connecticut fell from $87,291 to $80,958 — a 7.2% decline. Meanwhile, the average price of a home rose from $263,405 to $320,723 — a 21.8% increase. Wage data isn’t available yet for 2022 and 2023, but the average price of a home has risen to $380,000.
Sean Ghio, policy director at the Partnership for Stronger Communities, said building permits over the past 20 to 30 years haven’t kept pace with demand and after the market dropped off in the Great Financial Crisis of 2008, it never came back.
He said a lot of the developments, including apartments and multi-family homes, take years to get local approval.
“The response at the local level is still one of denial,” Ghio said.
He said there are still more than 200,000 Connecticut families spending more than 50% of their income on housing, when the number is supposed to be 30%. He said without new housing being built, people will continue to be renters and put pressure on pricing in the rental market.
“That’s increasing the demand on the housing market,” Ghio said.
Regardless of where a person falls on the political spectrum there seems to be agreement that more state investment will be necessary.
The Yankee report suggested “Rather than spending funds on subsidized housing developments, the state would do better to expand its rental-assistance program, which grants vouchers to low-income families. This approach would empower housing consumers — rather than enriching well-connected developers.”
However, Ghio said they also have to make it easier to build at the local level.
Yankee concludes that local zoning decisions should not be made by the state and that’s where the tug-and-pull with lawmakers begins. There are some who believe the state needs to step in and force municipalities to allow for larger scale developments and those who believe local governments should be left alone to make their own decisions.
“Local governments are better suited to formulating solutions that address their communities’ unique needs, and are far more accountable and responsive to housing problems and taxpayer concerns,” the Yankee report concludes.
The General Assembly was unable to address the issue earlier this year, but it’s bound to be back next year for debate again.