State needs innovative housing solutions
Connecticut’s 169 cities and towns are on the front lines of addressing our state’s housing needs — responding to emergency calls from the housing insecure, re-evaluating local zoning laws to better facilitate affordable housing development, and partnering with private developers to create innovative housing solutions in communities across Connecticut. But our mayors and first selectmen can’t do it alone.
Work by CCM and local leaders to promote affordable housing is making a positive difference, but we must remember that a one size solution will not work for 169 diverse and unique towns and cities, and that the impact of the property tax on housing affordability is inescapable. Reducing the property tax must be part of any comprehensive plan to increase affordable housing.
Connecticut faces a diverse set of demographic and economic challenges. Population growth is slowing and employment growth is below national trends in key employment groups. Connecticut residents and businesses face high costs and the impact of property taxes, that are over twice the national average on economic development only compounds the process. Regressive property taxes limit needed housing options and present a significant challenge when attempting to attract and retain qualified workers.
The need for an affordable, diverse housing stock is at the heart of economic development. Towns and cities throughout Connecticut have significant potential for accommodating transit oriented, mixeduse development, which includes housing. Transit Oriented Development in particular focuses on integrated planning to bring people, activities, buildings, and public space together around a central transit system.
The creation of mixed-use development, especially in existing buildings, is an economic multiplier that creates jobs, renovates under-utilized and often blighted properties that, when completed, can spur neighborhood revitalization, increase local grand lists and property values. Incorporating transit and mixeduse development helps towns and cities retain their unique charm and provide the type of housing that is in high demand among younger people as they enter the workforce.
Connecticut’s largest cities are critical in serving as the regional hubs, providing needed social services, jobs and arts and cultural centers that benefit all the towns within their region. These cities and their role as regional hubs are at risk. Without adequate funding and support they will no longer be able to serve that essential role, needed services will be lost and the vibrant downtowns that attract young workers will disappear. Strong cities will yield statewide benefits for years to come. Connecticut’s viability and vitality depends on their success.
The challenges faced by our urban areas and inner ring suburbs include a high perâcentage of property that is exempt — by state madate — from taxation, including but not limited to colleges, hospitals, and state-owned real property. Even though the state provides payment-in-lieu-of-taxes, or PILOT, to partially offset this exemption, this program has been woefully underfunded over the years and is an unreliable source of revenue. Exempting property from taxation does not reduce the cost of municipal services it simply shifts the burden to residential and business tax payers.
CCM, in our This Report Is Different study, repeatedly outlined a new path forward for towns and cities and makes the case that we cannot solve our ongoing fiscal, housing, economic development problems by relying exclusively on spending cuts or property tax increases. Long-term solutions must be comprehensive and may contain proposals that fall outside of everyone’s ideological comfort zones. CCM’S State and Local Partnership panel, which developed the report, included 21 municipal leaders representing cities, suburban and rural communities, Republicans and Democrats. We have offered recommendations that would enable towns and cities to: diversify local revenue; provide needed cost containment strategies; and encourage savings through increased regional collaboration.
Following these principles can begin to ease the regressive burden imposed by the property tax, encourage economic development and the development of diverse and affordable housing. These proposals will enable towns and cities to maintain current services, improve and expand infrastructure and provide the needed economic growth and stability that will ultimately result in the creation of a diverse housing stock.
We are pleased to see the General Assembly and Gov. Ned Lamont considering land use legislation to facilitate more housing growth. However, changing local land use laws must fit the needs each community. Municipal officials are eager to partner with the state to solve Connecticut’s housing crisis. We recognize it may take a compromise, and we know our state leaders and local leaders can work together to create more affordable housing across the state.
However, if state policies continue to require local governments to be over-reliant on regressive property taxes and state aid continues to be increasingly insufficient and often unpredictable, then all other attempts to make housing more affordable will simply be an exercise in futility.