iStock photo

The highly-regulated nature of development in Connecticut towns and cities is costing the state “likely tens of billions of dollars” every year, an expert from the state’s biggest business group says.

The Connecticut Business and Industry Association released a report this week arguing that the state is around 46,000 homes short of current needs, and needs to build nearly 139,000 over the next 10 years to get back on an even keel.

That would represent roughly double the current rate of construction, the CBIA report said.

“The economic consequences of this housing deficit are substantial—likely in the tens of billions of dollars per year,” CBIA Foundation director Dustin Nord said in a statement. “The lack of housing not only reduces options for workers, but creates workforce mismatches, impairs business competitiveness, and ultimately constrains economic growth.”

The report analyzed migration and labor data to find that the state is losing people age 18 to 24 right at the age when they make “career-defining relocation decisions” because rents and home sale prices are too high.

The effect is to drain the state’s workforce, productivity and potential for new businesses to form and drive new economic growth.

The report specifically calls out large-lot zoning in many towns, the difficulty developers face in building new housing fast enough to keep pace with rising prices, especially in the corridor between Stamford and New Haven.

To fix the problem, the report identifies a need for voters and officials to stop thinking of the state as “land constrained” – most of the state’s residents live in census tracts less dense than the national median, the report says. Instead, the report argues Connecticut’s generalized low, suburban and exurban density means there’s a “substantial potential” to add new homes with moderate-density infill development.

Specific solutions highlighted in the report include: zoning, parking, setback and lot-size reform; permit process streamlining; standardizing zoning definitions across municipalities; and builders’ remedies, rules like the state’s 8-30g affordable housing rule that let developers build much bigger projects than ordinary zoning if certain conditions are met, like affordability levels.

“For Connecticut to remain competitive economically, the state must expand its housing stock to accommodate our future workforce,” said Nord. “There are multiple avenues that can be explored, but ultimately Connecticut requires a comprehensive approach to enable greater production.”