This story has been updated.

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 whole name of the game is to create areas of density, of vibrant activity,” said DECD Commissioner Alexandra Daum. “A big part of that is bringing people to those downtowns … through having them actually live there in the first place,” she said.

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. 

“Simply put, this project will bring more residents and businesses to New Britain’s Main Street,” Jack Benjamin, New Britain’s director of planning and development, said in a statement announcing the city’s $4 million grant award. The funds will go toward the construction of a new building on the site where the former Strand Theater stood.

“This project will turn an underutilized parcel where one of our City’s most well-known theaters once stood into a beautiful, obtainable housing option for those looking to call New Britain home,” Mayor Erin E. Stewart said in a statement.

An architectural rendering of the rehabilitated The Strand building in downtown New Britain. New Britain received a $4 million grant through the Communities Challenge grant to convert the building into apartments, restaurant and retail space. Courtesy / City of New Britain

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 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.

Daum said not all of the housing funded through DECD grants meets the definition of “capital-A affordable,” but a percentage of units in many of the developments will be offered at lower-than-market rates. 

“Any housing that we can create will help with the problem, will help create more stock, more affordability and will help bring people in who can fill our jobs,” she said.

More housing attracts more people, and more people attract more shops and businesses, she said. “We think it’s a virtuous cycle.”


A previous version of this story incorrectly reported that the former Strand Theater in New Britain would be converted into apartments. The project will be a new building on the site of the former Strand Theater.

Erica covers economic development for CT Mirror. Before moving to Connecticut to join the staff she worked in Los Angeles for public radio’s Marketplace and, before that, for the Wall Street Journal's L.A. bureau. She grew up in Minneapolis, MN, graduated from Haverford College and earned a master’s in journalism from the University of Southern California.