Affordable housing would get tax-credit boost

(Feb. 22, 2008) More than 20 years ago, the legislature created a Blue Ribbon Commission on Housing that studied, and ultimately released a report outlining, the problems with housing in Connecticut. They found that rents and home sale prices in the state were increasing to a point where not even middle-income people could afford them.

Two decades later, Connecticut is facing the same issue but on a much larger scale. Many workers cannot afford to live in Connecticut and employers are concerned that the available talent pool is shrinking because of the problem.

According to Peter Francese, principal demographic forecaster for the New England Economic Partnership, the median sales price for a house in Connecticut in 2006 “was five times the median income of a 25-34 year-old worker.” Which meant that workers could not “afford to take out a huge loan to buy a house in Connecticut.” The result, he said, was that thousands of young people left the state.

To help stem the outgoing tide, the legislature’s Housing Committee has proposed SB-346, which would set aside $1 million in corporate income tax credits to support development of housing affordable for workers in Connecticut.

Under the bill, the state would issue a business tax credit voucher — in an amount to be set determined by the Connecticut Housing and Finance Authority — for a company’s cash contributions to approved nonprofit housing-development programs for low- and moderate income people.

While the legislature has recognized that workforce housing is a problem, more needs to be done to attract and keep a skilled workforce in Connecticut. The state has lost more 25- to 34-year olds than any other state in the U.S., and the current workforce in Connecticut has many baby boomers who are nearing retirement age.

CBIA believes the state needs to expand the supply of housing affordable for workers by encouraging the departments of Economic and Community Development and Transportation to coordinate and develop housing, transportation and economic policies that maximize growth, and reduce regulatory barriers.

For more information, contact CBIA’s Jesmin Basanti at 860-244-1929 or jesmin.basanti@cbia.com. n