All Connecticut towns would be required to have fair rent commissions and would have to allow commercial properties to be turned into housing without special zoning approval under a measure that passed a legislative committee Thursday night.

Senate Bill 12, the Senate Democrats’ signature bill on housing this session, touches on issues related to starter homes, creating more construction jobs, increasing state rental assistance and tying school construction reimbursement to housing affordability.

The bill passed the Housing Committee on Thursday in a marathon meeting that is likely to be the committee’s last of the session. Members passed dozens of bills, including a controversial measure that would largely end no-fault evictions, which typically occur at the end of a lease.

Lawmakers have said that housing is one of their major priorities this session as homelessness rises in the state, rents increase and more people are paying large portions of their incomes to housing costs.

“You’re not always going to make everybody happy, but I think we have to figure out how to build more housing. We have to figure out how to build more housing and in the places where they don’t want housing, ” said Housing Committee co-chair Sen. Martha Marx, D-New London.

The bill faced opposition from committee Republicans who said several of the measures would force towns to take action rather than allowing them to make their own decisions.

The bill would require that all towns pass ordinances by 2028 establishing fair rent commissions, which are local bodies empowered to hear and make legally binding rulings on landlord-tenant issues such as complaints about unfair rent increases.

In 2022, the state legislature passed a law that required municipalities with populations of 25,000 or more to have such commissions. The 2022 law required 27 additional towns to create these boards. Before the law passed, 25 towns had commissions.

The new bill would mean that all tenants in Connecticut would have access to a fair rent commission. It would allow towns to work together to create joint commissions or regional commissions established through their councils of government.

Tenants rights advocates have said that fair rent commissions are one of few tools that renters have to push back against rent increases. Marx said she’d seen a situation in her own district in which a fair rent commission was needed when a new landlord bought a property and rents went up.

“East Lyme, Connecticut, they didn’t think they needed a fair rent commission,” Marx said. “They have less than 25,000 people. One of their buildings was bought up by a large private equity company, and they then formed their fair rent commission very quickly.”

But, landlords have said many complaints are frivolous and Republicans feared the law would burden towns, particularly smaller municipalities.

“I mean, in the sense that it is a mandate on towns, I have an issue,” said ranking member Sen. Rob Sampson, R-Wolcott. “The current statute allows it to occur. There’s nothing stopping a town from creating their own fair rent commission. I would much rather see a prohibition on fair rent commissions being created at all.”

The bill would also require that towns allow conversion of commercial properties into housing as-of-right, meaning without needing to ask for permission from the local zoning authority. Developments would still have to go through normal procedures and permitting processes to ensure they meet health and safety requirements.

The goal is to make it easier to build more housing, and conversion of commercial properties has grown more popular nationwide over the past few years as office and shopping spaces were abandoned during the COVID-19 pandemic.

Planning and Development Committee co-chair Sen. MD Rahman, D-Manchester, has advocated for this policy heavily this session.

“I think this is the best way to utilize those properties and use them for good and convert them from commercial to residential,” Rahman said in a previous interview.

Republicans raised concerns that the bill would eliminate public hearings that occur before the zoning commission and would weaken local control. 

“I am terrified of the concept that the local Rite Aid that just closed in my town would suddenly be turned into incredibly dense housing with no public hearings whatsoever,” said Rep. Joe Zullo, R-East Haven.

The bill includes a measure that would allow towns to get increased grant money for school construction if higher percentages of their housing stock is designated affordable under 8-30g, one of Connecticut’s affordable housing statutes.

The percentage can include deed-restricted housing, typically financed by the government, and properties where the rent is paid through a housing voucher program.

“We believe that it would incentivize those municipalities to increase their affordable housing so therefore would get an increase in the school grants program,” Marx said.

Officials at the Office of Policy and Management raised concerns in public testimony on the bill, stating that the measure wouldn’t be feasible because of budget restraints. Gov. Ned Lamont’s administration has limited spending in favor of paying down debt, but critics have said the state is financially healthy and those limitations need to be lifted.

Rep. Tina Courpas, R-Greenwich, said she feared that children in school districts with less affordable housing would suffer if the bill passes.

“You only get one chance to get education right, why should they be penalized for their town’s lack of affordable housing,” Courpas said.

The bill would also add 275 slots to the state’s Rental Assistance Program for families whose young children participate in Head Start. The state Department of Housing has pushed to increase those vouchers, in part to improve outcomes for children.

It would also create a working group to examine barriers to building more starter homes, which has been a major issue in the constrained home buying market as land and construction prices rise. This has made it more difficult to build homes that first-time home buyers can afford.

The bill would allow the state’s Department of Housing to use $50 million in bond funding to start affordable housing projects that boost the construction industry.

It’s likely the bill will change during the legislative process. Marx said there may be other bills that passed committee that are moved into the omnibus bill.

It would next head to the Senate for approval, but may need a vote from the Appropriations Committee first.