What We Know About Affordable Housing

 

Out of Reach

Although median income in Connecticut is high at $66,441, housing prices in the state have grown substantially since 2000.  The price for a single-family home in Connecticut rose by 62 percent from 2000 to 2008, while personal income rose by only 38 percent. Additionally, Connecticut rental costs are up 55 percent statewide since 2000 and the housing wage (what a renter must earn per hour to afford a typical 2BR apartment) is up to $23.37 statewide or $48,600 a year, up from $23 in 2010, and is $18.50 even in rural areas.

In 2011, more than 6 in 10 of Connecticut's 410,000 renters spend more than 30 percent of their incomes on housing, leaving little for food, clothing, transportation, healthcare and other necessities. Nearly half the 683 occupations in Connecticut -- including machinists, mental health counselors, ambulance drivers, pre-school teachers, corrections officers and other vital jobs --  pay an average wage less than the housing wage.

Young People Are Leaving

Connecticut is losing a higher percentage of its 25-34 year olds than any other state.  These young adults are the "new blood" of our economy -- and they're leaving for other states, in large part because housing is less expensive elsewhere. With higher numbers of young people pursuing higher education, college and the years right after are a decision-point on where to live and establish roots.

The Largest Expense

Housing is usually the largest expense in a family budget, so high housing costs can strain that budget.  That means there is less money available for other needs, such as utilities and other bills, education, health care, transportation or saving for retirement or emergencies. This is frequently a direct cause of homelessness.

Job Creation and Economic Development

In a competitive economic climate, high housing costs make Connecticut a less attractive place to do business.  Because of high housing costs, employers in Connecticut have to pay higher salaries to attract and retain employees and have trouble recruiting employees from other states, especially for highly specialized fields. And even though Connecticut's businesses pay a good wage, housing prices keep rising faster than those wages: from 2000-2005, incomes in Connecticut rose 18.5 percent but housing prices rose by 63.6 percent.

Connecticut has been 47th among the states in construction of units per capita since 2000.  By creating more affordable housing, the state will benefit from the tax revenues generated through sales and income taxes related to housing construction.  In addition, the economy in general will benefit from job creation and increased spending in the local economy, while workers will have access to safe and decent housing that they can afford.

  • Housing creates jobs - 800 to 2,600, according to CHFA, for every $75 million invested, depending on how it's spent or used to leverage other investment.
  • Housing creates economic activity - The Department of Economic and Community Development, in a report on the $57 million in Housing Trust Fund spending since 2006, said it has leveraged $519 million in other resources for housing development, which doesn't take into account the economic multiplier effect. In fact, economic studies support the conclusion that for every dollar spent in housing construction, there is an additional $10-12 in economic activity that ripples throughout the economy.
  • Housing creates new tax revenue - $7,400 in sales and income tax when a multifamily unit is built, $12,000 when a single-family unit is built, and nearly $4,000 annually for any unit once it's occupied, according to Boston Foundation consultant Ted Carman.
  • Housing creates the homes we need for our workers, our parents, our children, our young professionals and families.
 

Related News