The Connecticut Mortgage Bankers Association held its “Affordable Housing in Connecticut: Partnerships and Opportunities” symposium last week at Rensselaer at Hartford.

An aging population, the exodus of young people and slow production of new housing do not make for a healthy state economy. But Connecticut is facing all of those trends, and without thousands more units of affordable housing, the state could begin to deal with net population loss and more labor shortages than it is experiencing now.

The state has taken some steps to prevent that from happening, according to David Fink, policy and communications director for the Partnership for Strong Communities, a Hartford-based nonprofit group. The Legislature in its last session passed the $100 million, five-year Housing Trust Fund, he noted. Connecticut is the 34th state to pass such a fund.

“It didn’t exactly slide right through, but we got a lot of support quickly,” Fink said at an affordable housing symposium held by the Connecticut Mortgage Bankers Association last week at Rensselaer at Hartford. “We have some high hopes for it.”

The fund is designed as seed money to leverage private money from banks and other institutions. It is administered by the Department of Economic and Community Development, which has an advisory committee to determine the disbursement of the fund.

Fink said he hopes the fund will be used to build starter homes and more rental housing, and to help local housing authorities increase production. Without more homes for middle-income workers, they will leave the state at even higher rates than they are leaving now, he said. For the past four years, the state’s population has grown slightly, but the population of 24- to 44-year-olds has fallen.

The approval of the fund was good news for the state, but more needs to be done, Fink told a crowd of mortgage bankers at the symposium, which was called “Affordable Housing in Connecticut: Partnerships and Opportunities.” But the bad news is where the state stands now.

A Spreading Need

The shortage of affordable housing causes several trends that are bad for the state’s economy. One is classroom failures. Without dependable affordable housing, low- to middle-income workers tend to move more often, which affects their children’s performance in the classroom.

Transportation congestion is also a major issue in and around Fairfield County. As housing prices there rise faster than anywhere else in the state, people who work there move farther into Connecticut, where they can afford to live. That creates a huge population of commuters traveling down Interstate 95 every day. It also creates a hardship for the companies themselves, because many are forced to pay transportation allowances to keep their employees from seeking other jobs.

Another problem that comes with the lack of affordable housing is public safety risk. Many police officers and firefighters can’t afford to live in the communities they protect, making emergency response times longer.

Although it does not have a direct effect on the economy, the breakup of families is also a side effect of Connecticut’s lack of affordable housing, Fink said. There are many baby-boom parents in the state who would like their grown children to live close by, but with housing prices as they are in the state, many can’t afford to stay.

“They can’t because there’s no place for them to live,” Fink said.

A Blue Ribbon Commission on affordable housing said in 2000 that Connecticut was short 68,000 affordable housing units. The Connecticut Housing and Finance Authority has about 6,900 rental units and group home units, which is about 10 percent of the need identified at that time. But in the past five years, the need has grown and is spreading to new areas of the state, according to Fink.

Southeastern Connecticut, Naugatuck Valley, south central Connecticut and the West Hartford-Avon-Canton area are all experiencing affordable housing shortages.

The market is just not working for people on the lower end of the income spectrum, Fink said. From 2000 to 2005, housing prices rose 49.7 percent, while wages rose 12 percent. After analyzing recent data, Fink concluded that of the 688 occupations represented in Connecticut, 324 of them do not pay enough money to meet what is known as the housing wage. The housing wage is what a person must earn to afford a typical two-bedroom apartment without paying more than 30 percent of the family income on housing. In Connecticut, the housing wage is $18 an hour, or about $37,000 a year, according to Fink. In some parts of the state, it’s more. A family in Stamford or Norwalk must make $27 an hour to meet the housing wage.

Eventually, many lower- and middle-income people will have to move, Fink said.

That will cause a major problem for businesses in the state – especially for businesses that can’t relocate.

“Recruiting [employees] is tough because housing prices are too high,” Fink said.

A recent study by the Connecticut Business and Industry Association showed a shortage of manufacturing workers in several different areas. Without more affordable housing in the state, the workforce will continue to shrink, businesses that can move will do so, and those that can’t – such as utility companies, hospitals, government and universities – will face severe shortages.

The affordable housing crisis has also resulted in “hot-bedding,” a trend where workers – mainly illegal immigrants – sleep in shifts in illegal rooms in makeshift locations, like garages.

The Housing Trust Fund is a good step forward, but the state government needs to take further steps to increase housing production, Fink said. One solution could be to echo actions in Massachusetts, where the state government gives money to cities and towns that allow denser development. The reluctance of communities to allow denser zoning, especially rental housing, has helped make Connecticut 47th in terms of housing production per capita.

Fink stressed that affordable housing does not have to harm the quality of life of people in a community. He cited a recent Massachusetts Institute of Technology study that showed multifamily mixed-income housing developments have no impact on the values of surrounding properties.

Most developers now know enough to build quality housing, even when it is affordable, Fink added.