Connecticut Post: Housing too high for young buyers

By: KEN DIXON

HARTFORD — Astronomical house prices may be good for longtime property owners, but it's discouraging the state's 25- to 34-year-olds, according to a new study that says 10 percent of that age group is moving out of state.

In fact, Connecticut leads the nation in the portion of its young-adult population that has decamped the state, searching for a more affordable life, said the study's author, Bruce Bluestone, director of the Center for Urban and Regional Policy at Northeastern University. Bluestone said that more housing stock, especially affordable homes for young families, is a key to the state's future.

"The high price of housing is indeed a significant factor in the decline in employment and population in Connecticut," Bluestone said. "An increase in housing supply could actually 'inoculate' Connecticut homeowners against the possibility of a long-term precipitous decline in housing values." During an extended presentation in the Legislative Office Building on Monday, aimed at increasing legislative support for a bill that would give towns and cities a flexible and more affordable way to create housing units, Bluestone joined lawmakers, young adults, housing experts and economists in warning about potentially dire economic consequences.

And if more affordable housing units were built, the economic spin-offs would resound positively through the local and state economies, giving employers a skilled work force while generating sales, personal income and
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property taxes, they said.

Those new revenues would more than offset the additional local cost of educating children in towns that have balked at new housing from concerns that it might affect their school systems, said Bruce G. Blakey, a consultant and former corporate economist for Northeast Utilities.

"There is a real problem with lost jobs and lost income due to affordable housing," Blakey said.

Susan Coleman, an economics professor at the University of Hartford, said it's a common complaint among recent college graduates, many of whom have hefty loans to pay off and $25,000-to-$35,000 entry-level salaries.

"They find it virtually impossible to cover all their expenses," she said. "It seems overwhelming to them."

And after years away, living independently in college, they're not happy bunking back home.

"They don't want to live with their parents indefinitely and their parents don't want to live with them indefinitely," Coleman said.

She said that if their friends find more affordable places in other states, word gets out.

"If they get the feeling that young people are moving elsewhere, they'll move, too," Coleman said.

Kerry Szeps, a graphic designer who lives with her parents in Rocky Hill, said housing costs are prohibitive for people beginning their careers.

"The problem right now is there are just too few homes for us to buy," she said. "There's a lot of high-end development going on but not enough affordable housing."

Nicholas Perna, chief economist for Webster Bank, said while local towns and cities have their zoning powers, the state can't do much but provide potential economic incentives like those contained in the pending legislation.

"It seems that the Legislature has very few levers it can pull," Perna said. "But this is one of the things that can have a potent impact."

"It's not a problem in the future," said Peter Gioia, chief economist for the Connecticut Business & Industry Association. "The problem is now."

Under the legislation, up to $10 million of the current surplus, which was projected Monday at about $850 million, would be used as seed money as part of an optional program for new-housing creation. Called the HomeConnecticut bill, it would be financing through the so-called tax-incremental financing, using sales and income-tax revenue from new jobs to help fund it.

Sen. Eric Coleman, D-Bloomfield, the chief legislative sponsor of the bill, said that local zoning rules prohibit the density of some affordable housing proposals, so the flexibility of the pending bill is an advantage to its possible adoption before the June 6 adjournment deadline.

Sen. John McKinney, R-Fairfield, said the proposal should find many supporters in both towns and cities and the General Assembly. "I think it's an understatement to say it's one of the most-innovative, progressive and important initiatives that I've seen in the nine years I've had the privilege to serve in the state Senate," he said. "It's important because it breaks down all the barriers to creating affordable housing that we see in so many of our towns and cities, towns that I represent." Municipalities could obtain incentives of $2,000 for every unit created in targeted zones; up to $5,000 for every new building; and grants for excess education costs. Local officials would decide on the density.

By the projected 18th year of the program, new revenue to the state should exceed $230 million, according to Bill Cibes, the state's former secretary of the Office of Policy and Management who led Monday's discussion for the nonprofit Partnership for Strong Communities.

"We lead the nation in a dangerous statistic," Cibes said. "If that supply of 25- to 34-year-olds isn't here, it's a problem."

The bill has passed three committees and the majority Democratic budget has approved start-up money in the pending budget.