New DECD Economic Strategic Plan Focuses on Housing,
Cites HOMEConnecticut Program as Example

September 21, 2009 -- Devoting more than a fifth of its 541-page report to the vital connection of economic growth to an adequate supply of affordable housing, DECD's much-awaited Economic Strategic Plan released September 16 concludes that housing costs in Connecticut are too high and have increased sharply over the past several years in great part because the supply of existing housing is constrained.

The state needs to "raise the prominence of quality, affordable housing to the top of the local, state and federal agendas" so that it becomes a concern of businesses, trade organizations and many others because the existing shortage has an "impact on economic competitiveness, responsible growth and the cost of infrastructure, not just roads and bridges but also the cost of municipal services and local schools."

The huge report, more than a year in the making, focuses on 13 "Factors of Economic Growth" ranging from transportation and taxation to healthcare and energy costs. But it devotes the largest single focus to housing markets and affordability. The report provides considerable data on everything from homelessness to the hazards of substandard housing, but its recommendations offer little detail or the tactical methods for accomplishing the outlined goals.

"There is no question a critical lack of qualify affordable housing exists in Connecticut," the report says. "Equally, it cannot be disputed that this lack of quality affordable housing has a negative effect on the state's economy and is constraining job creation," the report asserts. "The approach to remedying the affordability problem should be rooted in expanding the supply of quality affordable housing in Connecticut and not in overt manipulation of wage rates and/or the labor market."

Among the recommendations:

• Ensure there are funding mechanisms for the HOMEConnecticut program and the Housing Trust Fund to increase workforce housing in the state, both of which has received no new recent resources during the budget crisis.
  
  
• Coordinate grants and loans from the Housing Trust Fund, Flex and HOME programs.
  
  
• Expand the gap financing program administered by CDA.
  
  
• Establish a Green Tax Credit for housing projects, an initiative recently vetoed by Gov. Rell.
  
  
• Consolidate discretionary municipal grant programs and into a responsible growth program that gives grants based on scores that include such municipal initiatives as higher density zoning and Incentive Housing Zone creation, expedited zoning processes and training of land-use staff.
  
  
• Create an Executive Branch Responsible Growth Cabinet with a Secretary reporting directly to the governor which would recommend disbursement of development funds.
  

While the report offers little direction on how to accomplish the recommendations, it paints a clear picture, buttressing the contention of housing advocates, economists and the business community, that the state's failure to produce rentals, condos, town houses, starter homes and other affordable options for workers, families, young professionals, the elderly, homeless and disabled, has driven workers, population and jobs away from the state. The report offers other significant conclusions:

• Citing the National Low Income Housing Coalition's "Out of Reach" calculation of the state's rental market, the report concludes that "many state residents simply do not earn enough to live in the state without being burdened by housing costs."
  
  
• The state has a shortage of affordable and adequate housing for the elderly, disabled and abuse victims.
  
  
• Regulations and density limits have blocked the creation of denser, energy-efficient and less costly housing.
  
  
• Multifamily rental housing does not impose greater costs on local government, increase traffic or parking problems, reduce property values if well-designed and situated or attract residents who are "less neighborly or less involved in the community."
  
  
• Zoning and land-use regulations contribute to higher construction costs and exclusion of affordable home construction.
  
  
• High housing prices increase the wages local businesses must pay to retain workers.
  
  
• The demand for rental units is increasing while the availability is shrinking, so "action must be taken to rectify this issue."
  
  
• The existing stock of 117,000 affordable rental units must be preserved as nearly 40,000 may lose their affordable restrictions over the next two decades.
  
  
• Half of renters but only a third of homeowners are "cost-burdened" because they pay more than 30% of their income for housing.

The report does not put timeframes or targets on the Strategic Plan "until such time as public input is received."  The document also cautions that initiatives must be considered "in the context of Connecticut's overall state budget." 

- Download the plan here.