— Cate Hewitt, 3.1.2023
The controversial Fair Share bill – affordable housing legislation that was killed in committee in 2021 – was back on the table at Tuesday’s Housing Committee public hearing along with a number of other bills up for discussion.
“There’s a consensus that we are in an affordable housing crisis. Connecticut, led by its political leaders, has an important decision to make – do we want to address zoning over-regulation and plan and zone for a sustainable economy and equitable future or not? It’s really that simple,” said Erin Boggs, executive director of Open Communities Alliance, who spoke in favor of the bill.
Boggs said her organization was a member of the steering committee of Growing Together Connecticut, which she described as “a statewide consortium of organizations advocating for equitable investments and policies in under-resourced communities and expanded affordable housing choices in all parts of the state.”
She said the Fair Share bill would “implement a new statewide housing policy framework based on an effective process in New Jersey’” – modeled on the Mt. Laurel Doctrine.
The bill would require the Office of Policy and Management to determine the need for affordable housing in each planning region, and distribute the need to towns within each region based on grand list value, median income, lower poverty rate and other factors. Towns with a poverty rate of more than 20 percent would not need be included in Fair Share.
Municipalities would be required to submit a Fair Share plan to the state. Failure to submit a plan would result in default state zoning replacing a town’s local zoning authority. Any housing nonprofit or developer could sue a town for failing to submit or for a plan that did not create a “realistic opportunity.”
Boggs told the committee she wanted to “correct some misinformation” about Fair Share.
“Fair Share is not a radical override of local zoning – to the contrary, it is critical that residents of municipalities come together to plan how they will meet their Fair Share goal, and creative ways that meet their vision but in accordance with existing laws, particularly the Zoning Enabling Act.”
She said that Fair Share is not a requirement that towns themselves build housing, “Fair share is about municipalities allowing a range of housing in a way that’s already required by law.”
“Fair Share is not one size fits all. It’s the exact opposite. It’s calibrated for each town. Fair Share is not a policy to create only very low income housing. It’s a policy that goes up to 80% of area median income or $80,000 a year for a family of four, and it does not require towns to build tons and tons of housing.”
Boggs said that beyond each town’s actual Fair Share number, there are options: 100% affordable developments, inclusionary developments, or converting existing housing into mixed income housing. She said that in New Jersey, the formula has created “over 160,000 units of affordable housing and about 200,000 units of market rate housing.
If Fair Share is implemented, Boggs said – based on combining outcomes in New Jersey with a Connecticut-specific report from the National Association of Homebuilders – the estimate for state residents was an income increase of about $47 billion over 10 years, an increase in state and tax and local tax revenue of about over $9 billion and at least 63,000 jobs that would be created.
“This would be an incredible boon to Connecticut and would help us economically but it also would allow a rising tide to lift all ships,” she said.
Frank DeFelice, chair of the Regional Planning Commission for the Lower Connecticut River Valley Council of Governments, which represents 17 of Connecticut’s municipalities, told the committee that the need for “affordable, attainable and workforce housing has never been greater,” however, “there are several significant problems with the language in HB 6633.”
“First, no definition has been provided for the term ‘realistic opportunity.’ Without a definition, even municipalities that have made the creation of affordable, attainable and workforce housing a priority can expect to engage in protracted and expensive litigation with interested parties,” he said.
Second, he said, if the amount of housing stipulated by the bill is not constructed by the private sector – which the municipality has little control over – an actionable cause is created.
“Municipalities can be sued and forced to build housing at the expense of their taxpayers, most of whom are already housing burdened. It is unfair for the legislature to expose Connecticut’s municipalities to litigation for conditions over which they have no control,” he said.
DeFelice said that the bill requires that affordable housing be equitably distributed within a municipality – which he said is an impossibility for municipalities that are served by both septic and sewer systems.
“The equitable distribution stipulation would result in additional development in more rural areas of a municipality, which runs counter to the state Plan of Conservation and Development that recommends new development occur along transportation routes and currently built areas.”
DeFelice told the committee that incentivizing the adaptive reuse of existing older and abandoned buildings was the most efficient way to increase the number of affordable, attainable and workforce housing units and reduce housing costs.
State Rep. Jonathan Steinberg, R-Westport, told the committee that when the concept of Fair Share was first introduced a few years ago, he was “extremely hopeful.”
“…the bill that’s before you today, I could not be more disappointed. You have turned me from a moderate into a radical.”
Steinberg said that the bill implies a “punitive wealth penalty” that “seems to indicate that if you have a high grand worth, or your median income is higher, therefore, you should pay more.”
“I don’t see how that relates to the number of units you need to build. It just seems to be vindictive. You are effectively alienating 80% of the towns in Fairfield County with this kind of legislation,” he said.
State Sen. Jeff Gordon, R-Woodstock, said he was opposed to the bill because it “replaces people and their town officials with a state government takeover of local planning and zoning. It does not create an inclusive, collaborative, meaningful way to tackle the issues of affordable housing but also attainable housing here in Connecticut in our towns.”
He said the Fair Share requirements were not realistic for rural towns that “do not have the infrastructure, transportation or even the number of local jobs to sustain a big increase in the number of new affordable housing units mandated upon them – forcing them to meet a metric created without regard to the unique factors and features of each town would cause a situation by which towns would be destined to fail of no fault to their own.”
“HB 6633 puts the cart before the horse – it does not do good planning, but mandates a one-size-fits-all zoning on every town,” he said.
Danielle Dobin, chair of the Westport Planning and Zoning Commission, told the committee that the bill not only fails to address any of the myriad of issues surrounding development changes outside of zoning, “it also shifts responsibility for the cost of money, the cost of land, the choice of developers to sell versus develop or sit on a property, to individual towns.”
Dobin said that Westport has focused on leveraging town-owned land for affordable housing.
“Because experience has taught us that even in the most affluent of suburbs, where the average or median home price is $1.9 million, the private sector cannot be relied upon to solve this problem for us,” she said.
She urged the committee to focus efforts on creating funding for “right-sized affordable and deeply affordable housing.”
“The current federal tax credit programs generally require a minimum density of 50 plus units. These projects are too large given the infrastructure and traffic issues in most towns, and worse, they result in only a small percentage of affordable units.”
Adding units to the 10 percent calculation
HB 5326 would amend 8-30g, the 1989 state statute that allows affordable housing developers to override local zoning laws. The legislation would “include dwelling units that meet certain income requirements into the calculation of the ten per cent threshold for the affordable housing appeals procedure.” The bill would also “remove the deadline for any municipality to opt-out of the as-of-right allowance of accessory apartments.”
State Sen. Ryan Fazio, R-Greenwich, told the committee that less dense, “discreet” affordable housing “enjoys strong local support and includes apartments, condos, small houses, accessory dwelling units, senior and workforce housing.”
“If we give the municipalities the ability to count this naturally occurring affordable housing in their 8-30g calculations and enable them to subsidize it, we will see much more of it constructed,” he said.
Fazio said the bill would incentivize towns to encourage and subsidize all forms of affordable housing that “have a lot of local buy-in, that fit the tastes, the preferences of a given community.”
“We have 169 diverse towns that are all different and giving them that sort of flexibility, I think is proper in the style of local democracy that we have in the state… it keeps 8-30g but it creates substantial reforms in a manner that will give localities the flexibility and the incentive to create affordable housing in a way that they have the strongest support for.”
State Sen. Jeff Gordon, R-Woodstock, said the bill provided a step in the right direction by counting housing that meets certain income requirements towards a town’s overall affordable housing goals.
“You look at the specifics in each community, you work with people in each community, you develop a plan to address housing that works and that is sustainable and realistic growth for each community,” he said.
But Raphael Podolski, an attorney with Connecticut Legal Services, said that if the bill was going to include other kinds of housing, then the 10 percent threshold would need to be reevaluated.
“This comes in part from the unfortunate decision many years ago to use the term ‘affordable’ to talk about the housing that’s in the 10 percent. It has never been a measure of affordable housing – it is a measure of government assisted housing in the town,” he said. “And that then leads people into the wrong direction to say hey, I’ve got affordable in my town. Why doesn’t that count? It doesn’t count because that is not what 8-30g is using as your trigger.”
Tim Hollister, a land use attorney, called the system proposed by bill 5326 “administratively impossible” because it required that the towns and the state Department of Housing calculate and verify that a unit is affordable every year.
“And the formula in the bill is not 8-30g compliant. It assumes a standard undefined mortgage loan and talks about an average primary mortgage which would be a complete disconnect as we know in the current mortgage interest rate market where the rates are going up and down. So it’s a completely fictitious calculation.”
Property tax abatements for seniors
HB 6777 would provide a municipal property tax abatement for senior homeowners who converted their properties to a 40-year affordable restricted deed — a change that would provide a town with Housing Unit Equivalent points that could be used to apply for a 4-year moratorium from 8-30g projects.
State Sen. Melissa Osborne, D-Simsbury, said the idea for the bill came from listening to seniors who were struggling to pay the property taxes on their homes – which she combined with the need for more affordable housing.
“I’ve been really thinking about that and how can we help these folks age in place – and there really isn’t any anywhere that they can downsize to and have that dignity in their old age,” she said.
The purpose of the bill is to provide senior tax relief for seniors “for whom it voluntarily makes sense” to deed-restrict their properties with a 40-year deed restriction, under the requirements of 8-30g in exchange for a property tax abatement.
Osborne said it was important that the bill not prevent intergenerational wealth building, so she had included a one-time buyout, available with certain requirements.
“… Only if the owner of the property paid back 100% of the property tax abatement that had been enjoyed so nobody’s using it to game the system, and 50% of the profits they might realize between the deed restricted value and the non deed restricted value, so that the town is being compensated for the loss of the time value of money and the interest.”
She said the town could use the buyout funds to reinvest in creating more affordable housing – or, if affordable housing goals had been reached, then investing in energy efficiency or disability accessibility in the available affordable housing.
She said the purpose was not to game the system or allow towns to unfairly achieve a moratorium.
State Sen. Rob Sampson, R-Wolcott, told the committee that he saw property taxes as the “number one impediment to Connecticut’s future success and the number one thing affecting seniors in a big way.”
He said he was concerned that seniors were informed that this is “a forever decision” to restrict the deed on their property.
He said the abated taxes would also be offset by raising taxes for the rest of residents in a town, while simultaneously “potentially reducing the property value of the homes that surround this particular property because now this is affordable housing.”
“You can say that these towns don’t want to see affordable housing built, or they’re somehow discriminatory or that kind of thing, but ultimately, they’re the people that have the skin in the game. It’s their town. They live there, they own the property, and they’re the ones that ought to be making the policy,” Sampson said.
Sampson asked Osborne why Hartford should be writing policy that tells towns and their individual property owners and taxpayers how they should operate and “potentially affect their individual property taxes negatively, and reduce their property values.”
Osborne responded that while not everyone will agree on the role of state government, the bill helps towns achieve a policy goal in a way “that is very little cost for what they’re getting,” within “the framework of 8-30g.”
Hollister told the committee that bill 6677 had what he “charitably” called a “false front” that would allow a group of homeowners to deed-restrict their properties, build up Housing Unit Equivalent points for a 4-year moratorium, and then repeal their deed restriction the following year.
“This moratorium would be achieved without the town having to achieve a single housing unit that is affordable,” he said.
The Housing Committee hearing included 276 people who signed up to testify. On Wednesday at 12:25 a.m., number 169 on the list was giving testimony.
Cate Hewitt is a reporter and Associate Editor for CT Examiner. Hewitt covers planning and zoning firstname.lastname@example.org