An annual assessment of housing affordability in Connecticut finds market forces blunting the impact of the more than 7,000 affordable apartments developed with state aid during Gov. Dannel P. Malloy’s 4½ years in office.
A desire by aging Baby Boomers to downsize contributes to a soft market for single-family homes and increased demand for rental apartments, according to HousingInCT 2015, a study published Wednesday by the Partnership for Strong Communities.
“Right now, the market is being driven by demographics – all these boomers wanting smaller, denser, more affordable, walkable neighborhoods,” said David Fink, the group’s policy director. “Their kids, the millenniala, have a lot of education debt and a lifestyle that doesn’t connect with a four-bedroom Colonial on a two-acre lot.”
Overall, despite steady progress in reducing chronic homelessness and developing rental housing, Connecticut remains one of the nation’s most expensive places to live, ranking 6th in median monthly housing costs.
The state’s “housing wage” – the hourly pay necessary to afford a two-bedroom apartment – rose from $23.02 in 2014 to $24.29, which is the 8th highest in the U.S.
Half the state’s renters pay 30 percent or more of their income for housing. Housing is defined in state law as affordable to low- and moderate-income households if it costs no more than 30 percent of income.
The report indicates Connecticut, whose housing stock is 64 percent single-family homes, is seeing a shift toward multi-family housing. The state needs to come off the “autopilot” that churned out suburban homes for decades, Fink said.
Forty percent of the homes in 122 of the state’s 169 cities and towns have been built since 1970. Most of the exceptions are in lower Fairfield County, which grew rapidly in the 1950s as suburbs of New York.
“All these towns built single-family homes,” Fink said. “For the last 40 years, all these towns have been on autopilot.”
The shift to rental is reflected in the flatness of home prices as the number of sales increases. The value of real property on municipal grand lists fell in 151 communities from 2008 to 2013, though not enough to significantly drive down median home values, still the 8th highest in the U.S.
“All the towns need to create what we don’t have, which is what the market is demanding – multi-family housing,” Fink said.
Permits for multi-family units in buildings with at least five apartments nearly tripled from 2011 to 2014, reflecting a national trend. The state Department of Housing reports that another 3,000 units of affordable housing are in the development pipeline.
Connecticut now has 168,655 units of affordable housing, which is 11.3 percent of all homes. But only 32 communities have reached the state’s goal of having at least at least 10 percent of all housing in a community to be affordable.
The number of renting households grew to 455,778 in 2014 from 451,382 in 2013. The percentage of Connecticut households living in rental quarters rose from 30 percent in 2007 to 34 percent.