Connecticut Has the Tools to Address Housing Shortage

Recently, Connecticut non-profit DataHaven published an article looking at where housing has been built within the state using the Address Count Listings data, a new product from the Census Bureau.

Previously, we could estimate new construction by analyzing permit data through the Building Permits Survey.

The Address Count Listings expands our capabilities by showing recently completed unit counts as they are added to postal service address rolls. 

DataHaven’s analysis illustrates some of the key findings we can get from this new product.

Their research shows that 40,000 new units have been built in the state between 2020 and 2025 with just 10 towns, primarily the largest cities, accounting for 39% of housing.

Overall construction is concentrated in just a few census tracts, highlighting that much of the new housing constructed in the state during that period was in large multifamily developments. 

Relative Growth

Our analysis looks to build on DataHaven’s research in two ways.

First, we examine new housing construction in per capita terms to better understand the relative growth in communities across the state, as well as how the state compares to others.

Second, we perform a simple regression to better understand relationships between housing construction and price or population growth.  

Both of these contributions will give readers a better understanding of where housing construction is growing fastest, and the broader impact this new housing is having on the respective communities. 

Interstate Comparisons 

Viewing housing construction figures at an aggregate level is valuable, but it is also important to compare housing construction relative to population.

A state or town might only produce a few units in a given time period, but this can represent disproportionately more units than larger jurisdictions over the same period, even though the larger jurisdiction produces more in total.

In this section, we compare Connecticut construction to other states, and we examine housing construction in Connecticut’s towns based on population. 

From 2020-2025, Connecticut produced 12.5 units of new housing per 1,000 residents. That figure ranks 48^th among states over the period, ahead of only Rhode Island and Illinois.

The Northeast U.S. generally did poorly compared to the nation, with five of the bottom 10 states coming from the region.

The top performing state in the Northeast, Maine, produced 27.7 units of new housing per 1,000 residents, more than double the rate of Connecticut, although still below the national figure of 27.9.

Overall, the region produced 14.4 units of housing per 1,000 residents. 

The top performing region in the country was the South.

South Carolina had the second fastest growth in new housing at 54.3 units per 1,000 residents, more than four times the rate of Connecticut and only behind Idaho.

Other top growth states include common destinations for Connecticut outmigrants, such as Texas (52.2), North Carolina (46.7), Tennessee (46.5), and Florida (45.8). 

If we exclude the Northeast from our calculations, the rest of the U.S. produced 30.8 new units of housing per 1,000 residents over the period, more than twice as much as Connecticut.

Overall, Connecticut is a considerable laggard in new housing construction compared to the nation, despite having one of the tightest housing markets in the country. 

Local Trends

Over the last five years, larger cities and towns built the most housing in raw unit terms. But adjusting for population, we see that Granby led all municipalities at 42.52 units per 1,000 residents.

For comparison, New Haven, the highest-growth city, added 27.34 units per 1,000 residents.

Of the 10 municipalities with the highest per-capita construction rates, six were towns with fewer than 25,000 residents.

In total, these six towns built 2,647 units of housing between 2020 and 2025, 27% more than what was built in the city of Hartford over the same period despite having about 24,000 fewer residents between them.  

Still, even the top-performing towns fall short of national benchmarks.

Seven states had higher per-capita construction rates than Granby over the period. New Haven, despite having the fastest housing growth among our cities, built slower than the nation overall and would only rank 23^rd among states.

The disparity between Connecticut housing construction and the country should be viewed a statewide issue, rather than unique to any group of municipalities. 

Impact on Prices, Population  

In 2025, more than 300,000 people in Connecticut reported being unable to pay for housing, double the 150,000 who reported the same in 2015.

Affordability, therefore, is of central concern to the conversations regarding new housing growth in the state.  

The Address Count data allows us to test the relationship between new housing construction and housing costs directly. Using the Zillow Home Value Index, we compare per-capita construction rates against home price appreciation both within Connecticut and across states. 

Within Connecticut, towns that built more housing saw meaningfully slower price appreciation.

Among towns with more than 20,000 residents, those that built at higher rates saw home values rise roughly nine percentage points less than towns that built very little. 

The relationship is weaker at the state level. Construction and price appreciation are positively correlated across states, which runs opposite to the pattern within Connecticut.

That is not necessarily contradictory. States differ on dozens of dimensions that affect housing costs independently of supply, from income levels to land constraints to regulatory environments to economic conditions.

A simple bivariate comparison across states cannot isolate the effect of construction the way a comparison among Connecticut towns can, where many of those background conditions are held roughly constant. 

These findings largely mirror broader academic research regarding the impact of new housing construction on prices.

One study of over 200 metropolitan areas in the U.S. found that constraints on housing supply had sizeable effects on home prices, with more constrained markets seeing faster price growth over several decades. 

Population Growth

Economists Hsieh and Moretti famously found that constraints on housing supply in high-productivity cities reduce mobility and population growth, limiting long-term GDP growth.

Connecticut’s housing shortage carries the same risk. If the state cannot house the workers its economy needs, growth will flow to states that can. 

Across states, housing construction and population growth are strongly correlated. However, it should be noted that Connecticut’s population is growing faster than its housing stock, placing it well below the trendline.

States like Idaho, South Carolina, and Utah have matched their construction rates to demand, capturing the population growth that follows. 

The same pattern appears at the town level. Several Connecticut towns with strong population growth are building at rates well below what that demand would suggest.

The gap between demand and construction in these communities points to constraints on supply rather than a lack of interest from builders or residents. 

Over the long run, this dynamic can help explain Connecticut’s incredibly low vacancy rate and tight housing market for buyers.

The mismatch between supply and demand squeezes buyers and renters alike and leads to a less dynamic economy in the aggregate. 

Conclusion 

Connecticut’s housing problem is multifaceted, but at its core it is driven by a lack of construction.

As the CBIA Foundation for Economic Growth & Opportunity discussed in its housing report last year, Connecticut’s rate of housing production has not recovered from the 2008 financial crisis and has consistently lagged behind the production rate of the nation.

Last year saw the fastest growth in housing in the nation, but as we discussed here, that still leaves us among the slowest builders among states.  

Despite a sense that some kinds of municipalities build and others do not, our analysis reveals that sentiment is an oversimplification of the facts on the ground.

Although cities like Hartford and Stamford lead in raw unit counts, on a per-capita basis several smaller towns are actually building at higher rates.

The tools to alleviate our chronic housing shortage exist. What Connecticut needs is the commitment to use them.

Distinctions like this are critical as the state continues its housing needs assessment as outlined by legislation introduced during last year’s General Assembly session.

The Address Count data has limitations: it does not differentiate between housing types, and it measures net change rather than gross construction.

That said, our findings are consistent with years of scholarly research on housing supply. While it is not a panacea, expanding available housing supply helps curb rising housing costs and drives growth.

The state should be actively encouraging new construction so that we can begin closing the gap left by years of inadequate supply; reforming zoning, land use, and permitting regulations would reduce barriers to construction.

Expanding financial incentives for developers could further accelerate production.

The tools to alleviate our chronic housing shortage exist. What Connecticut needs now is the commitment to use them. 

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About the author: Aidan Lame is a research assistant with the CBIA Foundation for Economic Growth & Opportunity.