Connecticut’s Connecticut’s Housing Housing SituationSituationMay 2006

Affordable housing has been a problem forpeople who are homeless or very poor.

Affordable housing is now an issue that affect middle-income

residents. It is now an an economic growth issue, too.

A shortage of affordable housing causes other problems:

• Family pressures

• Transportati

on congestion

• Classroom failure

• Public safety risks

The Blue Ribbon Commission to Study Affordable Housing reported in 2000 there was a need for 68,000 affordable units. CHFA has financed slightly fewer than 6,900 rental units and group home units (the vast majority rental) between 1999 and 2004 -- about 10% of the identified need.A new Partnership-sponsored study now concludes that 257,000 households in Connecticut are burdened by their housing situations.

Housing prices have skyrocketed, particularly in areas that have traditionally been affordable:

• Southeastern CT • Naugatuck Valley • South Central CT• Central CT

Capitol Region Council of Governments (CRCOG) just reported:

Only 21% of home sales were affordable to moderate- income buyers in 2005, down from 40% in 2001

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005

Per

cent

Inc

reas

e

WagesHousing

Between 2000 and 2005, housing prices have risen 63.6% while wages have risen 18.5%.

The gap is The gap is wideningwidening

CT Median Sales Price as of December 2005:

$328,000$328,000 (Source: CAR)

Qualifying income:

$74,000 $74,000 (Source: CAR)

$100,000 $100,000 (Fannie Mae)

The “housing wage” is what a person must earn per hour to afford a typical 2BR apartment without having to pay more than 30% of family income on housing. • In Connecticut the housing wage has gone from $14.22 to $19.30 in five years.• About $18.90/hour in the Hartford/New Britain metropolitan area (up from $15.60 in 2004) and $15.60 in the New London/Norwich metropolitan area• Housing wage is $28.88/hour in the Stamford/Norwalk metropolitan area.

The median salaries for 294 of 630 occupations in the state don’t reach the housing wage…

They include:They include:Cargo supervisorsSchool bus driversMetal fabricatorsTailors and dressmakersTiming device assemblersWeldersWoodworkersPlant and systems operatorsPrintersMachinistsBakersBookbindersCabinet makersRadio mechanicsTelephone linemenWatch repairersAuto mechanicsPainters

Carpet layersFloor sandersShipping clerksTelephone operatorsMedical secretariesPolice dispatchersTax preparersLab techniciansEMTsHome health aidesDental assistantsAnimal control workersChefsTree trimmersPest control workersBookkeepersComputer operatorsTravel agentsBarbers and hairdressersFitness trainers

CBIA reported in January 2006 there are labor shortages in 14 skilled manufacturing occupations, from tool-and-die makers to plant managers and R&D staff.

The reasons: applicants lacked skills or found the cost of living AND HOUSING COSTS too high.

Connecticut’s population – and workforce – are getting older. We lost 20-34 year old workers at a rate much greater than the national average from 1990-2000, and the trend has continued.

-30% -20% -10% 0% 10% 20% 30% 40% 50%

Connecticut United States

% Change in Age Category, 1990-2000 Census, CT vs. U.S.

55 to 5945 to 54

35 to 44

25 to 3420 to 24

The new study concludes that 257,000 households in Connecticut can’t afford appropriate housing.The study assumes 10-15% of them – and some households making the median income or more – will leave Connecticut to find housing that’s affordable in other states, resulting in an annual state revenue loss of well over $100 million.In addition, workers and businesses won’t come to Connecticut because housing costs are so high. This “opportunity cost” will cost the state untold “tens of millions” of dollars in never-realized state revenues.

It’s a supply problem…

According to Fannie Mae, Connecticut was 47th in housing construction per capita in 2004.

A recent MIT study in eight Massachusetts communities found that multi-family, mixed-income housing development had no impact no impact on property valueson property values. This replicates other studies.

Misconceptions:Affordable housing will lower my property values

Misconceptions:Affordable housing will increase my town’s education costs

Studies show 4-5-bedroom homes generate more school costs than mixed-income housing, especially if they include few 3-bedroom units.

Northeastern Univ. study for Massachusetts legislature showed additional education cost of affordable housing is negligible.Connecticut’s school-age population (5-17) will shrink from 590,000 in 2000 to 562,000 by 2015.

Misconceptions:Age restricted housing will avoid school costs

As empty-nesters move into 55+ housing, typically in the same town, they often move out of a home that’s bought by a family, resulting in a net increase in students.

States facing the same housing supply shortage as Connecticut are offering various incentives to their towns: • Massachusetts is providing cash grants to cover towns’ additional service costs if they zone for higher density housing. And its Commonwealth Capital program provides financing to towns that make zoning and land use policy less restrictive.• Illinois allows towns to develop regional affordable housing solutions – towns can pay other towns in their region to assume some of the affordable housing burden.

HOMEConnecticut’s Goal: Keep families together and keep workers and businesses in Connecticut by increasing the supply of housing that’s affordable.

• Preserve existing affordable housing.

• Develop rehab, rental, mortgage subsidies to make existing homes affordable.

• Let public know that “affordable housing” has changed: beautifully designed, functional, lower density, needed by hard-working families and individuals.

• Provide municipalities with professional assistance, infrastructure needs and help them cover their costs.

Old Farms CrossingOld Farms CrossingAvon, CT

Metro Realty Group

Watch Factory Watch Factory CondominiumsCondominiumsCheshire, CT

Berardino Realtors

Heritage GlenHeritage GlenFarmington, CT

Metro Realty Group

Southwood Square Southwood Square (HOPE VI public housing redevelopment)(HOPE VI public housing redevelopment)

Stamford, CTStamford Housing

Authority

before after

Mortsen – Putnam Mortsen – Putnam HeightsHeights

Hartford, CTBroad Park Development & Corporation for Independent Living

before

after

215/225 Sheffield 215/225 Sheffield AvenueAvenue

New HavenNeighborhood Housing Services of New Haven

Flagg RoadFlagg RoadWest Hartford

West Hartford Interfaith Housing

Coalition

Hubbard WoodsHubbard WoodsGuilford, CT

Mutual Housing Association of South Central Connecticut

at The Lyceum227 Lawrence StreetHartford, CT 06106

860/244-0066david@ctpartnershiphousing.com

David FinkPolicy Director

www.ctpartnershiphousiwww.ctpartnershiphousing.comng.com