Reforms eyed to address housing crisis
Connecticut’s top lawmakers agree: The state is facing a housing crisis and changes must be made.
But they have drastically different ideas on how to address the problem.
Gov. Ned Lamont’s solution focuses almost entirely on spending taxpayer money to subsidize housing construction and homeownership. He is proposing to spend $600 million over the next two years to help build an estimated 6,400 housing units.
Legislative leaders also want to increase funding for construction, however, they worry about how long that will take to have an impact. To provide more immediate relief for residents facing housing struggles now, they are eyeing a deluge of additional major policy changes.
Bills proposed separately last week by two dozen Democratic legislators range from forbidding evictions during the winter to capping rent increases to increasing penalties landlords must pay for code violations. And local governments that continue to refuse to allow affordable housing to be built will be ineligible for certain state grants.
“Sure, we can put a ton of money out there into the system and that will result in additional housing being built — but absent some of the policy changes, my worry is that all that building will actually miss some of the people who are most at risk of being housing insecure, or at risk of becoming homeless,” said state House Majority Leader Jason Rojas, D-East Hartford. “We need more housing of all kinds, but we also need more policy.”
Overall, housing construction has increased nationwide and in New England over the last decade. But Connecticut
“Sure, we can put a ton of money out there into the system and that will result in additional housing being built — but absent some of the policy changes, my worry is that all that building will actually miss some of the people who are most at risk of being housing insecure, or at risk of becoming homeless. We need more housing of all kinds, but we also need more policy.”
State House Majority Leader Jason Rojas, D-East Hartford
has seen a massive drop in new housing being built and has a shortage of 85,000 affordable rental units, Lamont’s annual economic report outlines.
And in recent years, a hot housing market has led to rapidly increasing rent. Tenants priced out of one unit are left with few other places to move within the state because Connecticut has the lowest-in-the-nation rental vacancy rates.
Now, pressure is mounting for state lawmakers to take action as eviction rates surpass pre-pandemic levels with 1,742 evictions filed in January.
“Tenants are getting organized. The legislature better do something soon,” said Sean Ghio, the policy director of the Partnership for Strong Communities.
Last week, hundreds of renters showed up at the state Capitol complex to testify and call on the legislature to control rent.
“We need expanded tenant protections to provide relief now,” said Sarah White, an attorney with Connecticut Fair Housing and one of the tenant organizers.
“Simply funding more housing construction won’t address the deepseeded structural racism at the root of our housing system; whether that’s increasing rent, displacement, or segregation and where multi-family housing is constructed,” White added. “Funding is important, but it’s not enough.”
Landlords are pushing back.
“The proposed legislation is an undue burden on property owners, and creates an environment for tenant abuse,” Eric Polinsky said in written testimony in which he identified himself as a manager at L E Properties LLC in Plainville.
A hearing for the public to weigh in on the proposed changes before the Housing Committee was held Tuesday.
Renter protections
Rojas’s 56-page bill focuses on a long list of changes to help renters.
“It really is an attempt to try to attack a lot of long-standing issues, and recognizing that there’s no silver bullet solution to this,” he said during an interview.
His bill would forbid landlords from charging potential tenants an application fee, make it illegal to deny renting to someone because they have an eviction older than five years and set up a pre-inspection system to ensure security deposits are not withheld inappropriately.
His bill also calls for $5 million to create a regional housing inspection program to help improve housing safety. Fines those inspectors could levy for housing code violations would increase from a $250 cap to $2,000.
Rojas said he hopes the measure would eliminate scenarios where, for some landlords, “rather than fix the issue, it’s almost cheaper to continue to pay the fine and hope that it goes away.”
Tenants in Hartford in recent months have organized to shine a spotlight on their living conditions, and demand better enforcement of housing codes. It is unclear just how often housing inspectors in Hartford find code violations and fine rental property owners; Requests for data by Hearst Connecticut Media has been pending since November.
Senate Democrats’ 37page bill also eyes major changes to help renters.
If adopted, state marshals will be forbidden from forcibly moving tenants out of a property they have been evicted from by the courts during the winter months and cap fees for paying rent late at $25.
The bill would also cap how much property owners can increase rent at 4 percent, plus inflation as determined by the Consumer Price Index.
State Sen. Marilyn Moore, co-chair of the Housing Committee, would like to see rent increases capped lower than 4 percent, but said that may be the level needed to win approval.
“I’m just pushing to see what we can negotiate that everybody can live with as we move forward,” said Moore, DBridgeport.
Residents and advocates have urged lawmakers to set a lower cap for rent increases.
Several residents testified before the Housing Committee last week and shared that figuring out how to afford escalating rent prices can be a matter of life and death.
“I spent two years working the system of homeless services and affordable housing to get my beloved friend into housing only to hold her hand as she died of a gangrene infection — a gangrene infection — because she had been sleeping on sidewalks,” Luke Melankos-Harrison, a tenant organizer, testified. Human beings are not meant to sleep on sidewalks. I have seen what happens when society surrenders housing, a fundamental need.
Research shows as rent increases and the number of units vacant and available to rent shrinks, homelessness rises. In Connecticut — where rent has increased substantially and vacancy rates are the highest-inthe-nation — homelessness rose in 2022 for the first time in years.
Rojas is proposing to increase spending to help those experiencing homelessness by $20 million.
Another measure in both Rojas’ and the Senate Democrats’ bills would require anyone who owns at least 25% of a rental property to be disclosed to the town government where the property is located. This aims to take away the anonymity many property owners have that makes it difficult for tenants and government officials to find who to contact when problematic living conditions or unpaid taxes arise.
Rojas’ bill also proposes changes aimed at improving the housing search for low-income families who receive a government subsidy to help them afford housing, including a Housing Choice Voucher. A recent Hearst Connecticut Media investigation revealed half the vouchers being issued by local housing authorities are going unused because of the hot housing market and government red tape that makes many landlords reluctant to rent to those with a voucher.
Rojas’s bill requires the state to create a program to recruit landlords to participate in various subsidized housing programs and provides $5 million in the fiscal year beginning July 1 to reimburse landlords for rent they lose while waiting for a housing authority to approve the voucher recipient’s selection. His bill would also create a single application for rental-assistance programs rather than separate ones by program and town.
While Lamont’s proposals focus primarily on funding new housing construction, it includes three policy changes: increasing code violation fines to $1,000, capping how much landlords can charge for a security deposit from two months to one and forbidding small landlords from declining to rent to someone because of their sexual preference.
“The answer can’t always be more subsidies and bailouts. Taxpayers can’t afford it. And too often subsidy is an excuse for no structural reform,” he said during his Budget Address to legislators.
Landlords who submitted written testimony ahead of Tuesday’s public hearings are upset with the proposed changes.
“I am shocked by the many aspects of governmental overreach that are presented in this bill,” wrote Joseph Mollica. “Eviction records should stay forever. I can decide to take a risk based upon their story and my research because some people do change, but others do not. The government should not make me accept someone with an eviction history.”
Increasing housing construction
For Lamont , housing is an economic issue.
“The biggest slam on our beautiful state is affordability and economic growth is housing,” Lamont said during his State of the State address to lawmakers in January. “Every business thinking about moving or expanding repeats to me over and over again: ‘Even if you had the workforce, there is no place for them to live.”
Slowdown in the housing market will likely have an economic impact. The Congressional Research Service reports 16.7% of gross domestic product — a key indicator of the economy’s overall health — nationwide in 2021 was tied to spending within the housing market.
The supply of housing available for sale is often used to assess housing market conditions since a low inventory generally leads to upward pressure on house prices, CRS concludes.
Connecticut has struggled over the last decade
to increase housing supply.
While the number of houses that have begun construction has grown nationwide by 7.3% nationwide and 3.5% in New England states, housing starts in Connecticut have declined by 3.4%, according to data included in the governor’s annual Economic Report.
As the housing market faces economic pressure across the nation, Lamont’s attention to housing development is new.
During his first term in office, he steered clear of weighing in on major housing reform proposals and did not propose any major changes aimed at increasing housing construction. He also spent 35% less than his predecessor on affordable housing construction, despite state legislators earmarking funding for such purposes.
Now, he’s proposing to spend hundreds of millions of dollars to fuel new construction.
“Look, time is money, and this housing trust fund will allow developers to move quickly,” he said.
But a key component of Lamont’s plan involves relying on a strategy that’s been tried for years but has struggled to yield results: providing financial incentives to lure towns to loosen zoning rules and allow housing construction.
“Local control will determine how and where to build,” he told legislators in January.
Connecticut has a long history of standing on the sidelines while officials from wealthy towns block the construction of duplexes and other multifamily housing that lower-income residents can afford. That’s left the overwhelming majority of affordable housing being built in cities at a much higher share than elsewhere in the U.S. — and the state being among the most segregated.
Rojas proposes creating a state office to track segregation trends in each city and town, and withhold certain state grants when municipalities fail to allow affordable housing construction.
Lamont proposes doing away with a statutory requirement that his administration report how state construction subsidies fuel economic and racial segregation.
Lamont’s proposal leaves it entirely up to municipal officials to decide whether to loosen zoning restrictions and allow multi-family to be built in their towns. He proposes providing a portion of the $600 million for construction in “housing growth zones” around train and major bus stations.
“I’m also going to urge mayors and first selectmen to develop and act upon a plan of their own, where they will allow more housing in their community through friendlier zoning, and expedited approvals,” Lamont said.
A similar attempt to lure towns to reform their zoning was set up by the legislature in 2007. Called “incentive housing zones,” it led to few affordable housing units opening.
“Pathetically, [the] only thing sadder is the vast number of folks refusing to learn from the recent past,” Anika Singh Lemar, a professor at Yale Law School whose clinic challenges town zoning practices, tweeted of the incentive housing program.
Rojas is proposing other ideas to get towns to step up, including only releasing tens of millions of dollars in certain state grants to municipalities that get state approval for detailed plans outlining how they intend to grow housing in their communities fairly.
“Why should we continue to reward discretionary funds for what I see to be bad behavior on the part of towns and cities that don’t want to do their part around developing more affordable housing or developing housing at all?” Rojas said.
Housing advocates have criticized how existing “Affordable Housing Plans” towns must submit every five years often lack specifics, don’t need state approval and come with no ramifications when plans aren’t followed. The first round of affordable plans were due over eight months ago. One out every five towns still have no plan.
Lamont remains optimistic.
“Most of the remaining communities are finalizing their local affordable housing plans,” his February budget documents explain.
Federal and state attempts to link grants to affordable housing construction have been tried unsuccessfully by President Obama and Gov. Dannel P. Malloy. President Biden is planning to implement such a change soon.
Legislators have not yet released a spending proposal in response to Lamont’s call for spending $600 million on housing construction over the next two years. That is expected to be released by April 20.
“We’ll come up with something that is comprehensive that includes a little bit of everybody[‘s ideas],” said Moore. “We will figure it out.”