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Connecticut Caught in Imperfect Storm of Aging Population and High Rent

Aug 12, 2015

Demand for rental properties has been growing for several years, but the market has not kept up.

No one is saying that Connecticut is suffering from a housing crisis, but consider this: The state has far too few rental properties, which means those that exist cost more than many residents can afford.

Meanwhile, a giant portion of the state’s work force is at or near retirement, with expected drops in income.

If this is not a crisis, it’s at least disconcerting in a state where for generations single-family homes in the suburbs have been the stock in trade for developers and planners.

That trend can’t continue because the state isn’t getting any younger. In fact, according to the state Commission on Aging, a third of the state’s residents are older than 50. An interactive map shows that by 2025, older adults will make up a fifth of every town’s population, and they’re going to need affordable homes.

When Leslie Gordon was going through a divorce recently, she looked for a condo in Avon. Location was important, because Avon is where her sons would remain in the family home with their father, and she is co-owner of Be. Yoga on the town’s Main Street.

She could afford a mortgage, but getting one was difficult because she’d never owned a home on her own, and her business was less than two years old. With that, Gordon, 51, plunged into Connecticut’s pricey rental housing pool.

How expensive is Connecticut? The state is the eighth-priciest rental market in the nation, according to Out of Reach, an annual report from the National Low Income Housing Coalition.

Connecticut is home to two of the nation’s most expensive metro rental markets – Stamford-Norwalk, at number two, and Danbury, at number ten.

The state’s housing wage, or the amount of money a worker must earn per hour in order to afford a decent, two-bedroom apartment, is a walloping $24.29. That means a minimum-wage employee would need to work 106 hours a week to afford a decent two-bedroom apartment.

The housing wage for Stamford-Norwalk is even higher: $37.37; in Danbury, it’s $30.44.

Credit cincy project flickr.com/photos/cincyproject / Creative Commons

Joe Simons, who works to house Danbury residents who are homeless through a five-year-old organization called Off the Streets, has lived in the area for decades, and he hears the frustration of clients looking for affordable housing.

“It’s awful,” Simons said. “It’s beyond awful. I don’t know how people live who are looking for rental places. You do the math, and it’s so expensive that unless you’ve got a really good job, it’s really hard to afford any place unless you have two incomes.”

Simons said Danbury rentals are expensive – whether they’re studios or two-bedroom.

“The supply is very limited, and a lot of landlords are very particular about who they choose for tenants,” Simons said. “A lot of people -- even if they can afford a place -- sometimes will be rejected if they have enough income because they’ll run a credit check, and have evictions in the past.”

“This is something we have known and have needed to have planned for,” said Julie Evans Starr, executive director of the Commission on Aging. “We recognize the need for community readiness on a lot of different levels.”

And part of that is making sure people can – if they choose – age in place.

But for that to happen, analysts say planners and developers have to start thinking about housing in a new way. 

Research from the non-profit Partnership for Strong Communities said that 49 percent of Connecticut renters pay more than 30 percent of their household income on housing. The federal Department of Housing and Urban Development said 30 percent is a good target amount of household income spent on housing. If a household spends more than 30 percent, other necessities – food and health care among them – often go wanting.

The demand for rental properties has been growing over the last seven years – but the market has not kept up, said David Fink, Partnership policy director. (Roughly 34 percent of Connecticut households – or 447,000 households -- rent, up from 30 percent in 2007.)

That’s challenging for individuals and families, but towns with high housing costs – and limited rental opportunities -- suffer, as well. A small rental market forces an out migration of Boomers looking to downsize, along with younger people (the Millennials) without sufficient capital to stay in expensive towns.

And since a town’s budget heavily relies on property taxes, a stagnant housing market can make offering sufficient town services challenging – which makes a town less attractive to new residents. When a town has too many unsold houses on the market, the grand list – or the total value of the real estate in town – drops. That’s happened, said Fink, in 109 of the state’s 169 towns. And in about 40 more, the grand list has stayed flat.

To make up the deficit, those towns can raise the mill rate, or reduce services, or both, said Fink. The alternative is going to the state and asking for more municipal aid, but in these lean times, that’s not a viable option.

Leslie Gordon.
Credit Ryan Caron King / WNPR
"This isn't just me not making enough money. ...It's a deeper social issue."
Leslie Gordon

“Last I checked, the state is not able to increase that a lot,” said Fink. “A two-bedroom apartment in a high-resource town is either non-existent or it’s there and it will cost you probably what your mortgage payment was. Healthy communities need all sorts of people, and those people need all sorts of housing.”

Back in Avon, Gordon eventually found a one-bedroom condo to rent for $950 a month – significantly less than the town’s median gross rent of $1,268, according to the Partnership. It’s a short bike ride to her workplace, but she’s considering taking in a roommate once her lease is up, or she may house-sit. Meanwhile, she consoles herself that she’s not alone.

“There are a lot of people who are like me and I didn’t really realize it,” said Gordon. “And I think that’s helped me to feel like this isn’t just an isolated problem that I’ve created myself, somehow. There are a lot of people who are really struggling -- not that that makes me feel better for my struggle, but it makes me feel normal with my struggle, it makes me feel like this isn’t just me making this up. This isn’t just me not making enough money. This isn’t just me failing at whatever I’m doing. It’s a lot deeper than that. It’s a deeper social issue, so I guess I would say, ‘Chin up.’ Let’s get through this and figure out how to make it better.”

A good place to start, says Fink, is for towns to create a variety of housing for people up and down the economic ladder.

“If towns can recognize that it’s good for them to create the kinds of housing options that let the people who work in their communities live there, that lifts all boats,” said Fink.