This story has been updated.

After months of negotiations, the governor and state lawmakers have reached a compromise on a new version of sweeping housing legislation, which they’ll take up in a special session next week.

The replacement for House Bill 5002, which passed the legislature in May but was then vetoed by Gov. Ned Lamont over the summer, uses opt-in measures and incentives to push municipalities to allow more housing — rather than the requirements included in the previous version of the legislation. It also strikes a provision known as “fair share.”

Lamont on Friday announced the details of the new bill and called a special session for next week to pass it, among other measures.

“This bill tells mayors and first selectmen ‘What do you want your town to look like in five or 10 years? Start planning accordingly. Where do you want that housing to go? Are you going to zone accordingly? What else do you need? We want to be your partner,’” Lamont said.

The bill says municipalities must either create a housing growth plan or participate in a regional housing growth plan. It includes specifications for what the plan must include, such as: what strategies the town will use to improve access to affordable housing, an inventory of developable land in the town and housing goals.

House Majority Leader Jason Rojas, D-East Hartford, said the bill isn’t as strong as what passed during this year’s regular session but it’s not “painfully incremental” like legislation from past years. He added that it was a “great day for housing.”

“I think when you have a veto and you go into negotiations, I don’t think anybody should expect that the bill is going to be as strong or stronger. There was compromise that had to be made,” Rojas said. “It really reflects a lot of progress, and it gives us the ability to really move forward. I’m less concerned about how we got here, and I’m more focused on the road ahead.”

Friday’s press conference was filled with town officials and members of Lamont’s administration; few housing advocates were present. No members of the Senate were present. Senate Majority Leader Bob Duff, D-Norwalk, was out of town.

“We cannot reduce the cost of housing through inaction, wishes that towns will act alone, and policy carrots without enforcement. Connecticut businesses and residents are desperate for bold action,” Duff said in a statement. He said he was thankful for the leadership of lawmakers in the process. 

“I stated at the outset that I would not support a weak housing bill. We retained much of House Bill 5002 and incorporated new provisions that were important to Senate Democrats. I hope the next time it won’t take ten months to negotiate a bill on one of the top affordability issues facing our state.”

The bill says municipalities can choose between three options to allow more housing. They can sign a contract with the Connecticut Municipal Development Authority, zone for more housing near train and bus stations or comply with the growth plans.

Selecting one of these options makes towns eligible for new state funding.

Towns can sign contracts with the Connecticut Municipal Development Authority and develop plans to increase housing in downtowns or near train and bus stations. The authority was established in 2019, funded in 2024, and started work earlier this year.

They can also opt to participate in what’s known as Work, Live, Ride, which pushes towns to allow more housing density near train and bus rapid transit stations. It’s a concept more broadly known as transit-oriented development that has grown more popular nationwide over recent years.

The bill also says towns can create housing growth plans by working with their regional councils of government or on their own. Regional councils of government will conduct housing needs assessments.

If towns do not create these plans, they are not eligible for temporary pauses from being sued by developers whose affordable housing plans are denied under state statute 8-30g.

A long road

Since the veto, Lamont has faced criticism from his own party and housing advocates. His office negotiated House Bill 5002, and the governor had been expected to sign it. He first publicly showed signs that he was wavering on his support for the bill the day after the legislative session ended in June.

He ultimately vetoed the bill saying he wanted to get local leaders on board with the measure. Behind the scenes, he and advisors fretted over the political implications of signing the measure as they received thousands of calls from opponents and Lamont considered a third-term run next year.

Lawmakers have long been working to address the lack of housing in Connecticut, particularly housing that’s affordable and available to the state’s lowest income residents. Multiple estimates show the state lacks upwards of 100,000 units of housing to meet residents’ needs. H.B. 5002 was the most wide-ranging housing bill to cross Lamont’s desk since he came into office in 2019.

The new bill  includes many of the same measures as the old bill. The starkest difference is the opt-in measure. Previously, towns would have been required to plan and zone for a set number of housing units based on regional housing needs. The bill also previously prioritized existing state infrastructure money for towns that opted to increase density near public transit.

The question of how much the state should intervene to force towns to allow more housing has been central to the debate about Connecticut’s housing policy. 

Many town leaders say they want to preserve local control and create solutions that make sense for them, while housing advocates say towns have had plenty of time to build more housing and simply won’t do so without requirements from the state. The new bill leans on incentive and opt-in structures.

H.B. 5002 also would have removed minimum off-street parking requirements for new housing developments with 24 units or fewer. The new bill lowers that number to 16 units or fewer and allows towns to possibly exempt two contiguous zones amounting to not more than 8% of the land.

In those zones, towns could require a parking needs assessment and developers would have to build no more than one parking space for each studio or 1-bedroom apartment and two spaces for each unit with two or more bedrooms, or the number recommended by a parking needs assessment paid for the developer. The requirement would be for whichever number is lower.

Parking reform was one of the most controversial topics in H.B. 5002. Opponents feared it would mean there weren’t enough spots to park and would have negative consequences for residents. Supporters said it would allow more flexibility and make it cheaper for developers to build housing.

The other controversial piece of the bill, known as fair share, has been removed. It would have required towns to plan and zone for a set number of units based on an assessment conducted by an outside consulting group. The group analyzed regional housing needs to figure out the numbers, and H.B. 5002 would have required that towns plan for a quarter of the recommended numbers.

Fair share has been utilized with some success in New Jersey.

The bill establishes a Council on Housing Development with legislative and executive branch appointments. The council would approve or deny towns’ housing growth plans if OPM fails to act on them within 120 days.

It also says that the Department of Housing can act as a statewide housing authority to develop more affordable housing. The department can partner with municipal housing authorities on projects and can build housing on state land, according to the document.

Several members of the Connecticut Conference of Municipalities and the Council of Small Towns were at Friday’s press conference, where they spoke in support of the bill. They said they appreciated the collaboration and that Lamont took time to listen to their concerns.

“It’s not that nobody wants housing that’s affordable,” said CCM President Mayor Laura Hoydick, of Stratford. “It’s so critically important to our entire economic system. But sometimes, when we’re dealing with statutes that are so old and so laborious, we need a little thing, something different.” (Hoydick, a Republican, lost Tuesday’s municipal election to Democratic candidate, David Chess.)

Ridgefield First Selectman Rudy Marconi said he was glad the children who attend school in his town would be able to get the “social education” of interacting with kids from other socioeconomic groups. Many working families have been priced out of Ridgefield because of housing, he said.

“The lower rung of the ladder, relative to that socioeconomics, disappeared, and that’s the education that we all need to prepare our children for, because the real world is different,” Marconi said. “It is made up of all of us from all walks of life.”

He said success won’t be easy, and that the town is looking to increase its density near train stations.

The councils of government play a big role under the new bill and will work closely with towns on regional approaches to housing.

Matt Hart, executive director of the Capitol Region Council of Governments, said the COGs are excited to get started on work under the bill, if it passes next week.

“We are really looking forward to rolling up our shirt sleeves and working hard with OPM and our towns to conduct those regional housing needs assessments and to come up with targets — realistic targets— for affordable housing for each of our communities,” Hart said. 

Francis Pickering, executive director of the Western Council of Governments, said his COG hasn’t made a decision yet on whether it supports the bill, although he said it’s a better alternative than H.B. 5002. Pickering has been outspoken about his opposition to several of the measures that were in H.B. 5002.

“I think we’re in a position now where we can live with them and they could actually do some good,” Pickering said. “The reality is we know with housing, yes, zoning is part of the issue … but you still have to address state codes, spending, labor, materials.”

Open Communities Alliance executive director Erin Boggs said the bill includes some pieces of fair share, including requiring consideration of residents’ wealth in determining housing growth goals. The alliance has lobbied for a fair share policy in Connecticut for many years.

But, she said, there are loopholes in the bill that might allow towns that don’t want to build more housing to avoid it.

“There are some really big loopholes in here, so that towns who want to avoid contributing to solving the affordable housing crisis in the state are going to be able to do so. And so work will need to be done in the future to address that,” Boggs said.

House Minority Leader Vincent Candelora, R-North Branford, took issue with bringing a housing bill in a special session rather than through the regular process and said he wanted to see more work done to address property taxes.

“While I haven’t yet reviewed the full language in the bill, I’m disappointed that it was developed for a special session outside of our regular legislative process,” Candelora said in a statement. “I’m glad to see that municipal officials who previously raised concerns are now speaking in more positive terms about this revised version. This shift demonstrates that the Governor was justified in vetoing the original legislation, which overreached significantly.”

Housing Committee ranking member Rep. Tony Scott, R-Monroe, said he was glad to see the fair share portions were removed from the bill.

“I’m concerned that there will still be a regional needs assessment because that means there will still be numbers out there, and the end result will be the same,” Scott said. “Having more of the proposed concepts be opt-in rather than requirements is a step in the right direction.”

Other pieces of the old bill, including provisions that ban certain architecture that present challenges for people experiencing homelessness, will remain largely intact, according to a summary of the bill obtained by the Connecticut Mirror. 

Pete Harrison, Connecticut director of the Regional Plan Association, said he’s optimistic about the support for the bill from local officials. His group lobbied for the transit-oriented development piece of the bill and said he hopes it can help towns get more housing built.

“Is this bill building state capacity to do that? I think it is. Is it creating some kind of accountability and targets for local communities to meet? I think it is. Is it putting more resources into some of the logistics to support that? I think it is,” Harrison said. “Is it enough to meet the crisis? It’s not.”

The House is scheduled to be in session Wednesday, and the Senate is scheduled to be in Thursday to vote on the housing bill and other measures.