Report: Connecticut’s Housing Shortage a ‘Significant Barrier’ to Economic Growth

New research from the CBIA Foundation for Economic Growth & Opportunity finds the state’s housing shortage is a significant barrier to economic growth. 

The Economic Impact of Connecticut’s Housing Shortage report notes the state has an estimated shortage of 100,000-150,000 units, with some estimates suggesting more than 350,000 units.

Connecticut’s housing construction consistently lags behind national and regional averages. 

While 2024 marked the strongest post-recession year for housing production, the 6,499 units permitted was 36% below pre-2008 averages.

The research also shows that Connecticut’s housing shortage substantially impacts middle-income and moderate-income households who are fully employed but increasingly priced out of suitable housing options.

“The economic consequences of this housing deficit are substantial—likely in the tens of billions of dollars per year,” said CBIA Foundation director Dustin Nord. 

“The lack of housing not only reduces options for workers, but creates workforce mismatches, impairs business competitiveness, and ultimately constrains economic growth.”

Regulatory Restrictions

The research notes the state’s restrictive regulatory environment as a key factor perpetuating the shortage—particularly its prevalence of large-lot zoning requirements, town-specific zoning policies, and complex approval processes.

“For Connecticut to remain competitive economically, the state must expand its housing stock to accommodate our future workforce,” said Nord. 

“There are multiple avenues that can be explored, but ultimately Connecticut requires a comprehensive approach to enable greater production.”

“For Connecticut to remain competitive economically, the state must expand its housing stock.”

CBIA Foundation’s Dustin Nord

That report recommends reforms including: 

• Process and procedural reforms to modify legal frameworks, approval processes, and administrative requirements 
• Infrastructure enablement to support housing growth in appropriate locations 
• Financial subsidies to create incentives for development, particularly for affordable and workforce housing 

“By establishing a more efficient regulatory framework that enables diverse housing typologies while maintaining community character, Connecticut can enhance its economic competitiveness, support business development, and create sustainable paths for growth across its diverse regions,” said Nord.

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The CBIA Foundation for Economic Growth & Opportunity is a 501(c)(3) organization created to address the evolving needs of Connecticut’s economy. The foundation’s primary goal is charting a course for sustained economic growth that drives further predictability and greater opportunity for all Connecticut residents.

For more information, please contact Scott Beaulieu (860.244.1929).