A LOOK AT THE CONNECTICUT “HOUSING CRISIS”

The claim that Connecticut has a housing crisis is a common theme in politics.  But is there  a real shortage?  If buyers looking for places to live is an indication, the answer is no.  Instead, market pundits complain about the lack of buyers for residential homes.  The combination of high mortgage rates and low inventory are blamed for that.  Some have noted that searches on Zillow, Realtor and other sites includes many homes which are empty.  There are many homes owned by LLCs and the mailing address for the owner is in Florida.  Then, in addition, many other homes are owned by large corporate conglomerates.  Houses on the market built by companies like Lennar and Toll Brothers, are sitting on the market in different parts of the country. 

It should also be noted that with a strong labor market there tends to be a shortage of homes.  There is a case to be made that the Connecticut economy is as close as static as a state economy can get. The state makes projections which need to be challenged.  However, Connecticut has a large older population which chooses to age in place.  Add to that a state that remains at the bottom on national rankings for nearly every business  metric.

So, let’s look at some numbers.  The Connecticut population as of 2020 is around 3.6 million.  A projection had the state’s population at 3.56 million in 2015, growing to 3.65 million by 2040.  That constitutes 1.7% growth over that time, while the national population is growing more like 0.5% per year. By contrast, the Connecticut population is projected to grow 0.068%/yr.  That is a big difference. Over the  period of 2015-2040, the U.S. population will grow around 12%.     It should be obvious that Connecticut is not keeping up with the  rest of the nation economically or demographically.  This raises serious questions about whether or not Connecticut has a “housing crisis”.

Connecticut has seen a considerable drop in housing permits since 2006.  It is a problem found all over the state.  This drop is attributed to a combination of economic and political factors which have discouraged home building.   However, it can also be a reaction to the reality of the state’s population growth declining significantly. It is a trend builders should not fight.  As one anecdotal account, there is a half-done development project in Killingworth, CT.  A builder bought a couple hundred acres and proceeded to build home a couple as a time.  He  got about half of the properties  done, then the project failed and he had to  abandon it.  So, roughly half of the lots remain empty.

According to the internet, In October 23, there were 4,575 permits outstanding.    The recent historical average is 5,00-6,500 per year for Connecticut.  Annualizing the population projection puts growth at 4,400/year.  That suggests there is a balance, and not  an imbalance, between housing growth and  population growth.

The conclusion is that, at best, there could be legitimate imbalances in some parts of Connecticut.  If there was a real shortage, there would be more of a public outcry.  Instead, there is a demonstrable need to improve the state of Connecticut’s economy.  Then, one can address the imbalances between supply and demand for different types of housing in the state.

This data contradicts the messages of a group like DesegregateCT which is frantically looking for ways to put zoning control in the hands of the state government which seeking urbanize towns around the  state without a real need for it based on the data cited  above.  If nothing else, it is a problem that requires further study and should not be someone’s political football.