New Reports Show Connecticut’s Housing Crisis Continues to Worsen

CT NEWS JUNKIE | By: Jamil Ragland

HARTFORD, CT – Several reports released in the past week have shown that Connecticut’s affordable housing crisis continues to worsen, with rising costs and constrained supply making it difficult for renters to find quality affordable housing.

report from the Federal Housing Finance Agency found that Connecticut experienced the 7th highest percent change in housing prices, at 9.64%, from the first quarter of 2023 to the same time period this year. That figure outpaces the average national increase, which stood at 6.6%. Three out of the four Connecticut metro areas listed in the report saw increases even greater than the state average.

Those high costs are a major reason why another report, from Consumer Affairs, lists Connecticut as the worst state for renters in the nation. The other notes a lack of housing supply, as the report indicates that Connecticut has a 3.5% vacancy rate. According to the Federal Reserve, that rate is about half of the national vacancy rate of 6.6%.

To make matters worse, the state is not building enough units to increase housing supply in a significant way to make a difference in housing prices, according to the Connecticut Economic Digest, a joint publication of the Department of Labor and the Department of Economic and Community Development. The digest released its June edition showing a precipitous drop in permits for new home construction. The rate of new home construction permits peaked in 2004 at nearly 3,000 a quarter before collapsing during the Great Recession of 2008-09 and the recovery period that followed. The pace has not rebounded since, with barely over 1,000 new permits issued in the first quarter this year.

“It’s clear that this didn’t happen overnight, and we’ve seen indicators like this for years,” said Sean Ghio, policy director at the Partnership for Strong Communities, a housing advocacy organization. “There’s things that have made it worse, such as the interest rate environment making it harder to buy a home. But the bottom line is, this is a problem ultimately of supply. Not enough in the supply we have, not enough supply where people want it, and not enough of the kind of supply people want. We’re still a state that thinks we should be building big family homes on acre-plus lots.”

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