In a meeting to discuss potential solutions for Connecticut’s housing affordability crisis, state lawmakers heard from the treasurer of the state of Nevada about innovative approaches his state has taken to tackle the national issue.
Nevada Treasurer Zach Conine joined the Majority Leader’s Affordable Housing Task Force, to detail some of the initiatives the his state has undertaken to alleviate some of its housing pressures.
“In Nevada, like in most places around the country, we have an affordable housing crisis,” Conine said at the top of his presentation. “We find ourselves needing about 105,000 units of affordable housing.” That figure includes 85,000 units that the treasurer referred to as “big A affordable”- that is, a unit that has a 60% area median income (AMI) restriction or less. It also includes 20,000 units of supportive housing.
“Our approach comes from a place of moral compass. We believe housing is a human right,” he said.
He admitted there is some NIMBYism in Nevada, but not much because 80% of the land is owned by the federal Bureau of Land Management and not private property owners. That’s where it largely differs from Connecticut when it comes to zoning.
“Connecticut is at a bit of a crossroads right now as to whether we continue kind of beating our head against the wall on working with some of the smaller communities or we just invest in other communities that want to grow and thrive,” Sen. Majority Leader Bob Duff said. “The lack of housing is holding us back economically.”
One of the major tools that Conine discussed was the use of private activity bonds to underwrite the costs of developing multifamily housing. These bonds are issued by the federal Secretary of Transportation to allow private projects to benefit from the lower financing costs of tax-exempt municipal bonds. Nevada has received more than $2 billion in bonds.
A more innovative approach that caught the attention of Connecticut’s lawmakers was the creation of an Infrastructure Bank in 2017. The bank was revised in 2021 to focus its lending on social construction such as schools and housing. The bank is capitalized up to $75 million by bonds issued by the Nevada state government, and uses its funds to create public-private partnerships that pay for affordable housing development.
For example, the bank put forward $20 million, which was enough to secure a $200 million commitment from the AFL-CIO’s Housing Investment Trust. The trust helps to fund affordable rental and workforce housing, which both provides housing for communities in need and creates union jobs for workers constructing the homes.
“I think Connecticut is at a crossroads…the lack of housing, as in your state, is holding us back economically and we’ve got to figure out ways in which we can have successes instead of continuing to argue the same old topics year after year,” Duff said. .
Housing affordability is a national problem. According to the U.S. Government Accountability Office, the price of land has increased 60% between 2012-2019. Additionally, the cost of homes more than doubled between 1998-2021. Renters haven’t been spared from the skyrocketing cost of housing either. Rents increased about 24% from 2020-2023.
There are several factors which are contributing to the housing crisis in Connecticut and nationally. Since the Great Recession when housing prices fell drastically, corporations have bought large numbers of homes to use as rental properties. Critics claim that this practice shrinks housing supply, and drives prices up. Corporations counter that they own only a small portion of the housing market and cannot be responsible for price increases.
Another factor was the exodus of families from major cities during the height of the pandemic. According to the Economic Innovation Group, a bipartisan public policy organization, more than two million Americans left major cities for suburbs, exurbs and smaller cities from July 2020 to July 2022. The sudden need for housing put pressure on available supplies, driving prices even higher.
According to Zillow the average Connecticut home value is $377,247, up 10.3% over the past year and goes to pending in around 10 days.
These price increases have hit Black people especially hard. According to a report by the National Association of Real Estate Brokers found at the end of 2022 that only 38% percent of new and existing homes were considered affordable to families with an annual income of $90,000. This places homes out of reach for Black Americans whose median household income is $52,860.
