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The presentation details the housing affordability crisis in Connecticut, highlighting the disconnect between state development goals and local zoning laws. Director James Kowats discusses the state's initiatives to enhance economic growth amid rising housing costs, chronicled by a 63.6% increase since 2000, while wages have risen only 18.5%. The report also examines the implications of growth control areas, local government resistance, and zoning challenges contributing to the decrease in affordable housing options, ultimately identifying potential solutions for sustainable development and collaboration.
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Planning Laws & Housing Affordability in Connecticut 2007 Connecticut Housing Conference James Kowats Director of Acquisitions UniStar Properties, LLC
State Goals vs. Local Laws • Shortage of affordable housing in CT • State initiatives to improve CT economy • Developers caught in struggle between State goals and local laws • Growth control areas associated with highest housing costs in the country, New Haven area second highest home prices* • Many local governments confusing “Smart Growth” with “No Growth” *Source: NAHB, “Growth Boundaries, Permit Caps Pushing up Building Costs”, Smith, 2006
Affordability • Affordable home • Household pays less than 30% of income on housing • Not necessarily “low income”, “subsidized” • Need for affordable housing • Household earns 80% of area’s median income • Household spends 30% or more on housing • Many areas of the state reaching that threshold Source: www.HUD.gov
Source: “New Perspectives on the Need for Affordable Housing Within Connecticut”, Klepper-Smith, 2005
Connecticut Affordability • Since 2000, housing costs have risen 63.6%, wages increased only 18.5%* • 19%, or 1 in 6 households in need of affordable housing† • In 2004, median income couldn’t qualify for median sale price home in 102 of 169 municipalities* • In 2005, median income couldn’t qualify for median sale price home in 157 of 169 municipalities* Sources: * HOMEConnecticut.ORG and †National Association of Home Builders
Impact of Affordability • 70% of CT Business & Industry Assoc. members say housing affordability problem makes attracting employees difficult* • 1990 to 2000, CT lost more 18-34 year olds than any other state* • 2000 to present, CT lost more 25-34 year olds than any other state† • Migration could cost CT up to $133 million annually in lost state income and sales tax* Sources: *HOMEConnecticut.ORG and †www.commercialrecord.com
Local Planning & Zoning Laws • Communities are coming out against development • Towns structuring P&Z laws to limit growth as much as possible • Implications of poorly designed P&Z laws goes far beyond developer inconvenience • Connecticut: Green & Growing order to “build the capacity of municipal staff, boards and agencies to make complex land use decisions” * *Source: www.ct.gov
The Cost of Zoning • Harvard Institute of Economic Research published “ The Impact of Zoning on Housing Affordability” • Looked at affordability in terms of home price relative to construction cost • Studied the time to go from subdivision application to permit issuance • Longer permit issuance lag increased home price • A single category increase in permit lag raises cost of construction $7/sq. ft. Source: HEIR, “The Impact of Zoning on Housing Affordability”, Glaeser & Gyourko, 2002
The Cost of Zoning (Cont’d) • Permit Lag + Impact Fees + Growth Restrictions = Planning Penalties • Planning penalties increase home prices faster than income growth • American Dream Coalition estimates planning penalties add at least $100k to median home price • 12 states account for over 90% of all planning penalties in the U.S. (CA, NY, FL, NJ, MA, IL, WA, CT, AZ, CO, OR, MD) Source: American Dream Coalition, “How Smart Growth Makes Housing Unaffordable”, O’Toole, 2006
Planning Penalties at Work • Eastern CT town in need of “workforce” housing • UniStar proposed single family subdivision, 36 homes in $200k range • Year and a half of resistance by town • Town wide decrease in density by more than half • Anticipated redraw expected to yield 17 homes in $450k plus price range
Resistance to Growth • Growth is a sensitive issue in CT • “Fear” of sprawl puts political pressure on municipalities to halt development • NAHB survey of home buyers finds 49% of respondents find developers responsible for sprawl, 48% blame planning boards* • However, respondents purchasing preferences indicate they share some responsibility for sprawl *Source: National Association of Home Builders
Possible Solutions • Be “smart” about growth • Exclusionary zoning contributes to sprawl • Allow wide mix of land use, alternative lot arrangements, increased density • Allow these things by right • Streamline the process & review laws • Laws and the review process should implement the Plan of Development • Audit for conflicting laws • Establish clear timelines for the approval process • State & municipal cooperation • Regional planning incentives • Funding to encourage responsible development • Training & educational resources available to municipalities
Looking Ahead • Other factors related to affordability • Challenges: taxes, insurance, down payments, Not In My Back Yard (NIMBY) • Opportunities: public & private partnerships, Federal dollars available • Public, private & non-profit sectors must work together • Growth is inevitable, and “no growth” is not “smart growth”
