Affordable Housing, Community Development

David Fink Blogs About the Partnership's New HousingInCT2012 Report

 

Among the immutable laws of economic theory are that (1) even modest demand will drive up costs if supply is low, and (2) the market always gets what it wants.

When it comes to Connecticut, both laws are at work.

The Partnership for Strong Communities issued its annual HousingInCT2012 assessment of the state's housing situation on November 13, and the bottom line is bleak.

Connecticut fell to 50th among the states in units built per capita in 2011.
Translation: There’s very little supply.

As a result, Connecticut still has the 6th highest rental costs, and 8th highest home values in the nation. More than two in five Connecticut households are spending more than 30 percent of their incomes on housing, a perilous level that leaves little disposable income.

But fixing the supply problem shouldn’t be a ready-fire-aim endeavor. We have to be sure the supply we build is the supply we need.

What do we need? Homes that are smaller, denser, more affordable, energy-efficient, walkable, and, if possible, close to transit. What don’t we need: large single-family homes.

HousingInCT2012 points to the factors fueling the changing housing market. The two key demographic groups in the state are aging Boomers, who want out of large homes, and younger workers who left Connecticut and need to return to provide the skilled labor pool needed to attract new business to the state.

Young professionals are saddled with an average $26,600 in education debt, according to a Pew Research Center report. With more than a third of mortgages requiring a down payment of 20 percent or more last year, according to the National Association of Realtors, a young couple – even if they can qualify for a mortgage – isn’t likely to have a down payment to buy even a modest condo. They need to rent or buy something small. Similarly, more than half the nation’s Boomers – retired or working -- have less than $25,000 in savings. They, too, need something small.

If low housing prices can be combined with units that are close to mass transit, all the better.

The report’s lessons are clear: More supply, but the right supply. Either Connecticut’s towns will satisfy that demand, or other states will. Massachusetts Gov. Deval Patrick just announced a new effort to create smaller, denser, affordable, energy-efficient, transit-proximate units for his state’s workforce. We’ll follow suit, or we won’t grow.

Read HousingInCT2012 here

 

 

 

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