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September 2006 — Vol. 84, No. 7

FROM THE PRESIDENT

More affordable housing needed for our economy to grow

By John R. Rathgeber

CBIA President and CEO

Competitive business costs, well-educated workers and world-class transportation systems top the list of issues that Connecticut’s state government must address so our businesses can succeed in world markets. But another issue is also becoming urgent: A growing shortage of affordable housing is making it harder for employers here to attract and retain qualified employees, threatening our economic future.

It’s a New England–wide problem that’s especially acute in Connecticut, Massachusetts and Rhode Island, according to a working paper prepared for the Federal Reserve Bank of Boston. Now, even middle-income households are finding housing too expensive here compared with other regions. Real house prices rose 73% in New England between 1995 and 2004, compared with 44% nationwide. And the Bridgeport-Norwalk-Stamford area was one of the 10 most expensive metro areas in the country in 2004.

One of the biggest reasons for the increasingly unaffordable housing here, according to the Boston Federal Reserve, has been easier access to mortgage credit in the past few years, which has increased demand. Another is strict building regulations, which have both pushed up home prices and limited the supply of affordable housing. The single most important solution to the problem, the Fed says, will be increasing the supply of affordable housing.

So far, Connecticut badly lags the nation in housing construction, ranking 48th among the states in construction of housing units per capita in 2004.

Over the next few months, CBIA will be asking the candidates for governor and the General Assembly about their opinions on affordable housing as well as on business costs, workforce skills, energy and transportation. We will keep you informed about their responses and other election-related information in the CBIA News, the Government Affairs Report and other printed materials, and on our elections Web site, CTbizVotes.com.