Lamont is right – affordable housing is key to economic development
Connecticut’s lack of affordable rental options is eating into paychecks and local economies alike. State policy can make a difference in bringing down housing costs for working-class Connecticut residents – and Governor Ned Lamont has done the right thing by investing in housing for all levels of income.
At a recent meeting, the State Bond Commission allocated $46 million in bond dollars for building affordable housing. The governor remarked that the need for affordable housing isn’t just “a matter of folks having a place to live, it’s also a matter of economic development and growth.”
Gov. Lamont is correct: Affordable housing is a crucial component of economic development. Building affordable homes generates millions of dollars in new economic activity, creates jobs, and broadens the state’s tax base. Analysis from the National Association of Home Builders shows that, for every $1 the state invests in building affordable homes, $4.57 in private investment is leveraged. The facts are clear: Affordable housing is an important, beneficial, and cost-effective investment for the State of Connecticut.
From a business perspective, the need for housing affordability is clear. When our workforce must spend more and more of their income on housing, they spend less on goods and services in the local economy. Connecticut employers understand the need to provide more affordable rental and home ownership options for low and moderate-income families. For example, the expansion of Electric Boat in southeastern Connecticut has been accompanied by the creation of affordable housing in towns like Norwich and Stonington.
Our state has a long history of partnering with local builders to create quality, low-cost housing. In the past decade, Connecticut has invested over $2 billion in affordable housing. Gov. Lamont’s Fiscal Years 2020-21 capital budget, however, proposed no new bond authorizations for affordable housing development. While the allocation of $46 million for affordable housing is a positive change, builders need consistent investment in order to keep the development pipeline moving.
Without regular new funding, new construction will be put on hold, preservation of existing affordable housing units will fail, construction jobs will be at risk, and Connecticut residents will not be able to access the affordable housing they need to succeed. In May, the legislature’s Finance, Revenue and Bonding Committee passed a bond package that included $255 million in new affordable housing authorizations over a two-year period. Lamont and the legislature should use this number as a baseline for significant, regular funding for affordable housing construction in the upcoming legislative session.
Connecticut residents want to live in affordable, vibrant communities with housing options for all levels of income. Too many of our neighbors, however, are feeling squeezed by high rental costs, with over one in four renter households in Connecticut spending half or more of their income on housing.
Any budgeting process will involve making tough decisions on which state investments are essential, and which are expendable. Affordable housing is not a frivolous expense. Housing is by far the largest expense in most Americans’ budgets, and Connecticut has the ninth-highest housing costs in the nation. A relatively small investment by the state can generate economic growth, unburden our residents, and convince young families and seniors to stay in – or move to – Connecticut.
Sean Ghio is Policy Director for the Partnership for Strong Communities.
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