A $100 million state grant program aimed at boosting economic “vibrancy” in communities around Connecticut is devoting a significant portion of that funding to new housing.

The Department of Economic and Community Development’s Communities Challenge, established in 2021, solicited grant applications for projects supporting economic development around transit hubs, downtown revitalization and pedestrian and public space improvements. Of the 28 grants awarded to a range of multi-faceted developments, 20 include new housing — or the potential for new housing.

The grant awards will go toward more than 2,300 new units of housing, 300,000 square feet of commercial space and a dozen projects incorporating public amenities. 

In the wake of a years-long trend toward online shopping and the pandemic-era shift to remote working arrangements — driving down foot traffic in many central business districts — the Connecticut Communities Challenge program took specific aim at bringing people back to downtowns. 

Meanwhile, businesses across the state, struggling to fill thousands of open jobs, say the lack of available housing stock is also contributing to a workforce crisis. The Connecticut Business and Industry Association partnered with affordable housing advocates this year to push for legislative solutions to support the state’s strained workforce.

DECD Commissioner Alexandra Daum acknowledged at her confirmation earlier this year that housing and employment are intertwined, and she highlighted the agency’s community development grants as one of the ways it’s “moving the needle on this issue.”

The needle may already be moving slightly.

Last year, construction activity picked up in the state, with permits for new houses and apartments rising roughly 30% year over year to nearly 6,500. 

In addition to DECD’s Communities Challenge funding, another agency program — the $875 million Community Investment Fund 2030 — has awarded several grants to projects incorporating housing that could add as many as 1,280 units in the coming years. That includes 541 units in Norwalk, 219 in New Haven and 155 in Hartford.

Read more: CT’s economic development efforts targeting new housing