Housing In Connecticut’s State Budget Fiscal Years 2024 & 2025

This week, the Connecticut legislature passed H.B. 6941An Act Concerning the State Budget for the Biennium Ending June 30, 2025, detailing appropriations and revenue (the budget bill), and H.B. 6942An Act Authorizing and Adjusting Bonds of The State, which details bonding (the bonding bill). The budget bill proposes $25.1 billion in spending in FY 24 and $26 billion in spending in FY 25. The biennium budget includes critical new resources to create and preserve affordable housing which are detailed below.

Partnership for Strong Communities is pleased to see the budget includes $810 million in capital support for housing development and assistance, which is a significant increase over the $305M allocated in the last biennium budget. The budget also includes several million in funding for housing stability programs and services. The Legislature and Governor Lamont demonstrated their commitment to maintain and expand investments for affordable housing creation and preservation. They did not choose to increase funding to the state’s Rental Assistance Program (RAP), which has not seen any funding adjustment in nearly a decade. Connecticut’s escalating rental prices have resulted in a decrease in the number of households being stabilized by the program each year. It is disheartening and unacceptable that thousands of Connecticut families, who are eligible for a RAP voucher, are facing difficulties in affording their homes due to the unavailability of funds. Investing in RAP is crucial in mitigating housing insecurity and preventing homelessness.

Summary of Affordable Housing Funding:

Department of Housing (DOH)

  • Housing/Homeless Services line is funded at $92,602,789 in FY 24 and $87,882,789 in FY 25. This is an increase of $7.3 million and $2.6 million in each year of the biennium over the FY 22-23 budget. This increase includes $1.1 million in FY 24 and $1.38 million in FY 25 for the operation of the 2-1-1 Housing Crisis line and $5 million in FY 24 for shelter services.
  • Housing/Homeless Services to municipalities is flat funded FY 24 & FY 25 at $675,409.
  • Up to $2 million of the unexpended balance of funds appropriated to the Department of Housing, for the Housing/Homeless Services account, for the fiscal year ending June 30, 2023, will be carried forward to be used for administering the emergency rental assistance program in FY 24.
  • New bond authorizations for housing development and rehabilitation projects at $100M in each year of the biennium, including $60M set aside to revitalize moderate-income housing units within the Connecticut Housing Finance Authority’s (CHFA) State Housing Portfolio.
  • New bond authorizations for the Housing Trust Fund (HTF) at $200M in each year of the biennium, with no more than $200M of the total allocation going towards a CHFA-administered revolving loan fund for workforce housing projects. HTF may be used for housing affordable to residents with incomes up to 120% of the area median.
  • New bond authorizations for $75M in each year of the biennium for the Time-to-Own program.
  • New bond authorizations for $50 million for the Housing Receivership Fund for the rehabilitation of existing housing that has been put under court ordered receivership.
  • New bond authorizations for $10 million for grants or forgivable loans to Time-To-Own recipients for unanticipated capital improvements to their newly purchased homes.
  • Makes the Department of Housing a standalone agency, rather than within the Department of Economic and Community Development (DECD) for administrative purposes only. This results in annual staff costs for DOH of approximately $235,000 per year beginning in FY 24, associated with hiring two fiscal administrators; the budget includes this funding.

Office of Policy and Management (OPM) 

  • New bond authorizations for grants-in-aid to distressed municipalities at $7M in each year of the biennium.
  • New bond authorizations for grants-in-aid for regional and local improvements and development at $20M in each year of the biennium.
  • New bond authorizations for grants-in-aid for a municipal pilot program to leverage private funds for redevelopment of designated historic preservation areas at $1M in FY 25.
  • New bond authorizations for the Local Capital Improvement Fund at $35M in each year of the biennium, which may include investments in public housing.
  • Requires OPM to study whether any state-owned real property is available and suitable to develop as housing.

Department of Economic and Community Development (DECD) 

  • $600,000 in each fiscal year in DECD for staffing at the Municipal Regional Development Authority to support housing development in MRDA member municipalities.
  • New bond authorizations for the Brownfield Remediation and Revitalization program at $35M in each year of the biennium.
  • New bond authorizations for housing projects at $3M in FY 25.
  • New bond authorizations for the Small Town Economic Assistance program at $35M in each year of the biennium.
  • New bond authorizations to carry out the duties of the Office of Community Economic Development Assistance at $50M in FY 25, which will assist local community development corporations.
  • New bond authorizations to operate a high poverty-low opportunity census tract grant program at $50M for each year from FY 24 through FY 29 ($300M total). This grant program may fund eligible projects, including construction of mixed-income rental housing and owner-occupied housing; workforce development programs, and public infrastructure investments, in areas where 30% or more of residents have incomes below the federal poverty line. DOH will work with DECD in evaluating and funding housing programs proposed under this grant program.
  • Requires municipalities to annually report statistics to DECD on housing permits issued and dwellings demolished.

Department of Energy and Environmental Protections (DEEP) 

  • Authorizes bond issuances for a Housing Environmental Improvement Revolving Loan Fund at $50M in FY 24 and $75M in FY 25. Together with the Department of Housing, DEEP will use these funds for a pilot program to retrofit multifamily residences to improve energy efficiency or remediate health and safety concerns. Eligible residences must be in environmental justice communities or alliance districts, prioritizing projects for residents with income up to 60% of state AMI or 80% of area AMI.

Department of Developmental Services (DDS) 

  • New bond authorizations for supportive housing for individuals with an intellectual or developmental disability at $15M in FY 24.

Capital Region Development Authority (CRDA)

  • New bond authorizations to encourage economic development, at $25M in each year of the biennium. Eligible projects may include encouraging residential housing development.
  • New bond authorizations in grant-in-aid to East Hartford for economic development activities at $10M in each year of the biennium, including the creation of housing units and redevelopment of vacant buildings.

Connecticut Municipal Redevelopment Authority (MRDA)

  • New bond authorizations for capitalization at $60M in FY 24.
  • MRDA to provide financial support and technical assistance to municipalities to develop housing growth zones.
  • Removes the minimum population requirement for municipal membership in MRDA.
  • Requires municipalities that opt to collaborate with MRDA to adopt a housing growth zone near existing infrastructure.

American Rescue Plan (ARPA) Allocations

  • To the Department of Housing:
  • $2 million in FY 24 in ARPA funds to invest in the flexible funding subsidy pool of housing and homeless support to subsidize housing and provide flexible assistance to help individuals, families and youth overcome financial barriers and expedite solutions to homelessness.
  • $1 million in both FY 24 and FY 25 in ARPA funds for housing support services.
  • $10 million in FY 24 in ARPA funds for various additional housing initiatives.
  • $1 million in existing ARPA funds for the Rental Assistance Program reallocated to the Rapid Rehousing Program.
  • To the Office of Policy and Management, $250K in FY 24 to conduct a statewide housing study.
  • To the Department of Mental Health and Addiction Services, $562,500 in FY 25 to increase funding for supportive services accompanying new housing vouchers.

Watch for our complete summary of housing bills taken up by the General Assembly this session in the coming weeks.

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