Connecticut should push up homeownership, not prices
Among the many complaints about the Malloy administration and Connecticut is that residential real estate prices have been stagnant or declining. The Republican candidate for governor, Bob Stefanowski, has pressed this point often.
Of course homeowners usually like their property to increase in value, but not always. Retirees are not so happy about it when their rising property wealth is reflected in higher property tax bills. More important, housing is not a financial asset for the whole population, since many people are renters, nor is housing a financial asset alone. Rather, housing is first of all a necessity of life as much as food, electricity, gasoline, heating oil, and medical care. Nobody except the vendors of those necessities celebrates when those prices go up.
Because Connecticut state government policies long have been so mistaken and counterproductive, the state’s economy has been lagging the nation’s for many years, and that has tended to depress housing prices. But those policies have depressed incomes as well, making housing more expensive for ordinary people anyway. Further, the state’s land use policy, giving great discretion to municipal zoning agencies, makes housing more expensive still, since most towns prohibit or discourage multifamily and inexpensive housing.
Just last week, the zoning board in Newington, a town where “affordable” housing constitutes less than 10 percent of the supply, rejected a plan to build 81 low- and moderate-rent apartments near a stop on the bus highway between Hartford and New Britain. The board purported to oppose the project because of the difficulty of building an adequate sidewalk from the apartments to the bus stop. But being so low, Newington’s affordable housing supply suggests that the zoning board is mainly unenthusiastic about admitting people who will be renters instead of homeowners.
Such disdain of renters is common and is fair to an extent. Connecticut’s poverty policy long has failed, creating poverty more than eliminating it, and the poor often are a drain on their communities, consuming more in public services than they produce in taxes. But concentrating the poor in the cities, the few places where multifamily housing is allowed, has profound social and financial costs too.
As long as Connecticut is content for poverty policy to create rather than reduce poverty, the cities can’t be improved without exporting their poor to the suburbs, and politics has yet to summon the nerve to force the suburbs to take them. It probably never will.
So Connecticut might do well to examine housing policy in Singapore, a city-state with little income inequality and a homeownership rate of 90 percent. This has been achieved in large part because the Singaporean government lets people use their social insurance tax withholdings to purchase housing, whose construction the government arranges — beautiful condominium towers with many amenities, largely owneroccupied. The poor become property owners, gain respect for property, build equity, and become middle class.
Singapore does something Connecticut can’t. It forces ethnic integration in housing so people of Chinese, Malay, and European descent cannot isolate themselves. But Connecticut could achieve integration in governmentsponsored condos by arranging residency by income levels, which is sometimes done already in privately built housing and indeed was planned for those apartments in Newington.
Poor people who are about to become owners of modest condos might be more welcome in the suburbs — and more successful.