ML041910072

Housing a Region in Transition: an Analysis of Housing Needs in Southeastern Connecticut, 2000 - 2005. Summary Report. Conducted by Southeastern Connecticut Council of Governments

ML041910072
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Housing a Region in Transition An Analysis of Housing Needs in Southeastern Connecticut, 2000-2005 Summary Report Conducted by:

Southeastern Connecticut Council of Governments In Collaboration with:

Connecticut Department of Economic and Community Development Southeastern Connecticut Workforce Investment Board United Way of Southeastern Connecticut

Steering Committee for the Housing Study James S.Butler, AICP Executive Director, Southeastern Connecticut Council of Governments Steering Committee Chairman John Beauregard Executive Director, Southeastern Connecticut Workforce Investment Board, Inc.

Janet Dinkel Pearce President United Way of Southeastern Connecticut, Inc.

Faith Bessette-Zito, Senior Development Manager, Community & Housing Development Division, Eastern Region, Connecticut Department of Economic and Community Development Housing Study AnalystlAuthor Richard B. Erickson, AICP SCCOG Staff Contributing to the Study James S.Butler, AICP, Executive Director Heidi Samokar, Planner III Thomas Seidel, Planner III Wendy Leclair, Executive Secretary The preparation of this report was financed by the:

Connecticut Department of Economic and Community Development United Way of Southeastern Connecticut Southeastern Connecticut Workforce Investment Board Southeastern Connecticut Council of Governments Published by the:

Southeastern Connecticut Council of Governments Five Connecticut Avenue Norwich, Connecticut 06360 April 2002

Table of Contents

1. Introduction 1

2. A Changing Regional Economy 1

3. Population Trends and Characteristics 4

4. Housing Trends and Characteristics 7

5. Zoning for Housing 11

6. Potential Areas for Higher-Density Housing 13

7. Housing Education Programs 14

8. Selected Housing Assistance Programs 15

9. Opinions and Comments Gathered Through Surveys or Interviews 16

10. Estimates of Housing Need, 2000-2005 17

11. Next Steps 20

1.Introduction Urban Municipalities: Groton, New London, and Norwich.

In the first decade of the new century, south- Suburban Municipalities: Colchester, East eastern Connecticut faces serious housing Lyme, Griswold, Ledyard, Uisbon, Montville, issues of a scale and complexity not previously Preston, Sprague, Stonington, and Waterford.

encountered. This document summarizes an extensive analysis into these issues. The de- Rural Municipalities: Bozrah, Franklin, tails of that analysis may be found in the full North Stonington, Salem, and Voluntown.

study report.

Housing has become a growing regional con-cem since 2000. As a result, four agencies in 2.AChanging Regional Economy 2001 came together to examine in some de-The region's economy has shifted to tail housing needs within southeastern Con-necticut. Participants inthe study are the Con- service Jobs.

necticut Department of Economic and Com- Southeastern Connecticut's economy munity Development, the United Way of South- changed in fundamental ways in the last de-eastern Connecticut, the Southeastern Con- cade of the 20'h century. This shift from a necticut Workforce Investment Board, and the regional economy that was the most defense-Southeastern Connecticut Council of Govern- dependent inthe nation in the early 1990s to ments. The Council of Governments served one now dominated by gaming and tourism as the lead agency for the project and retained isremarkable inat least three aspects. First, Richard B.Erickson, AICP, to conduct the study. the scale of the economic restructuring is so The objectives of the regional housing study large as to alter the region's economic base.

Second, the speed at which the economy was are:

transformed is without parallel in southeast-To compile and analyze a variety of data ern Connecticut's history. Third, given its related to the region's economy, workforce, scale and complexity, the shifts were population, and housing stock. achieved relatively smoothly.

To assess current regional housing needs. In a recent study commissioned by To estimate regional housing needs into the Connecticut's Mystic & More, Dr. Timothy short-range future. Tyrrell of Impact Research Associates, Inc.,

found that regional employment grew by about

• To suggest a process by which a coordi- 15,000 jobs, or 15%, during the 1992-1999 nated plan of action to address regional period. This was a remarkably high rate of housing needs may be developed. growth at atime when the region lost a major The overall geographic focus of the study is share of its defense employment and when the Southeastern Connecticut Planning Re- the region's population grew by only 1%.

gion, as defined by the Secretary of the Con- This rate of job growth reflected the opening necticut Office of Policy and Management. For of two major casinos, the first by the purposes of analysis, the housing study has Mashantucket Pequot Tribal Nation in 1992 divided the municipalities comprising the re- and the second by The Mohegan Tribe in gion into three groups: urban, suburban, and 1996. These generated employment during rural. These classifications include the a critical period to more than counterbalance following communities: the sharp reductions in defense jobs.

1

By 1999 the economic transformation Also reflecting the regional economic of southeastern Connecticut was well shifts are changes in the absolute and advanced. Of a total regional employ- relative concentrations of employment ment in that year of about 118,000, within the major industry groups mak-manufacturing accounted for only 16%. ing up southeastern Connecticut's In contrast, four out of every ten jobs economy. By 2000, about eight out of were in the services sector. Of the ser- every ten jobs within the region were vice employment, about half was attrib- provided by service producing indus-utable to recreation services, which in- tries. A mere two out of every ten jobs cludes the casino employment. were attributable to goods producing industries. The service producing in-Based on 1997 data, Dr. Tyrrell con-dustries include the tourism and enter-cluded that of the four industry clusters tainment employment that was sharply forming the core of the region's stimulated by the opening of the two economy, the Tourism and Entertain-casinos. While this element of the re-ment Cluster isthe "star". Employment gional economy was generating large in this economic cluster isestimated to numbers of new jobs, employment in account for about 40% of all jobs inNew goods producing industries, which in-London County. Incontrast, the Defense cludes manufacturing, suffered signifi-Technology, Engineering & Advanced cant job losses as aresult of downsizing Manufacturing Cluster, which until the in the defense sector.

1990s led the region's economy, now provides only about 10% of the region's Gaming isthe engine of the new employment. regional economy.

It is clear that the Tourism and Enter-By the fall of 2001, the combined em-tainment Cluster now dominates south-ployment of Foxwoods Resort Casino eastern Connecticut's economy. How and the Mohegan Sun approached this cluster fares over time will send siz-24,000 workers. This employment gen-able ripple effects throughout the eration in less than a decade isnothing region's economy, whether for better or short of remarkable. To put this figure worse.

into perspective, the combined casino One very positive effect of the economic employment is more than twice that of changes discussed above is that the the next largest regional employer, the dire predictions of regional unemploy- U.S. Naval Submarine Base. It isesti-ment rates of as much as 20% due to mated that indirect employment result-defense downsizing did not material- ing from casino operations and expen-ize. Instead, growth inthe Tourism and ditures accounts for at least another Entertainment Cluster, stimulated 10,000 jobs.

largely by the two new casinos, in-Nearly two-thirds of the combined creased employment. As a result, un-workforce of both casinos are reported employment in southeastern Connecti-as living in southeastern Connecticut.

cut was cut from 6.1% of the labor force Of the total number of casino workers, in1990 to only 3.3% in 1999. By the fall eight out of ten reside in Connecticut, of 2001, the region's jobless rate had and Connecticut and Rhode Island to-fallen even further, down to 2.5%, com-gether account for 95% of all casino pared to 3.0% for the state as awhole.

employment.

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More than half the casino workers liv- In 2000, the annual average wage of ing within southeastern Connecticut workers in the region's remaining reside inthe group of three urban towns, manufacturing industries was $62,300, Groton, New London, and Norwich. compared to less than $32,000 for Norwich alone is home to about 4,500 those employed in the growing service casino workers, 30% of all those resid- industries. The picture is even darker ing inthis region. Nearly three times as when one looks at the annual average many casino workers live in Norwich wage for employees inamusement and as inthe community with the next larg- recreation services, which in 2000 was est number (Groton). This concentra- less than $27,000. Wage rates are lower tion in the urban municipalities, and still for workers in the hotels and lodg-notably in Norwich, places particular ing places segment of the services sec-pressure on the housing markets, es- tor. Here the annual average wage was pecially for low-moderate-income a bit more than $20,000. For all indus-rental housing, in these communities. tries within southeastern Connecticut Wage rates are a housing concern. in 2000, the annual average wage of nearly $36,800 was about 20% below the comparable wage for the state as a One negative effect of the restructuring whole.

of southeastern Connecticut's economy after 1990 has been a reduc- With respect to housing needs, the shift-tion in the collective earning power of ing economy continues to create a the employed labor force. This is di- growing pool of gainfully employed rectly related to the loss of approximately workers whose wages are not sufficient 11,000 jobs in the manufacturing sec- for them to compete in a tight regional tor combined with the addition of nearly housing market. Employment projec-24,000 jobs inthe services sector of the tions suggest that the region should region's economy. This downward shift expect continued growth in the service in wage generation has a direct nega- sector of its economy into the short-tive effect on the ability of a large seg- range future. Further growth in the ser-ment of the region's employed labor vice industries will heighten the need force to purchase or rent suitable hous- for more housing affordable by low-ing or to have achoice inthe location of moderate wage earners.

their housing.

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3.Population Trends and Characteristics Population growth and distribution The population Is older.

are uneven.

During 1990-2000, southeastern Net total population growth in south-Connecticut's population continued a eastern Connecticut can be described trend of increasing age. By 2000, the as stagnant over the 1990-2000 period.

average median age among the The net increase in population over that region's 18 municipalities was 37.7 decade was amere 1%, the lowest rate years, up from 33.7 years in 1990. Dur-of growth for the region since 1800-10.

ing the last decade, the region's popu-By 2000, the region's total population lation age 65 or older grew at ten times stood at 242,759.

the rate of the total population. As a Population growth was not uniform result, in 2000 the elderly represented throughout southeastern Connecticut. 13% of all southeastern Connecticut The three urban communfties, Groton, residents.

New London, and Norwich, all lost Nearly 30% of these elderly households population. This loss collectively consisted of a single person. This amounted to more than 9,000 residents.

amounted to nearly 9,000 single-per-In striking contrast, the remaining 15 son elderly households. Half of the regional municipalities that are subur-region's elderly who live alone reside in ban or rural gained nearly 11,000 new the group of three urban communities residents. As aresult, all of the net popu-of Groton, New London, and Norwich.

lation growth during the 1990s was due Norwich has by far the greatest number to gains inthe suburban and rural towns.

of elderly living alone, nearly 2,000.

This pattern of declining urban popula-tion and growth in the less developed Both the aging of the region's popula-towns of the region continues a tion and the growing numbers of eld-long-standing trend. erly who live alone have housing impli-cations. These include the types, num-As population shifts geographically, so bers, locations, and affordability of hous-too does the demand for housing ing units needed for this segment of the change, affecting the numbers, loca-population.

tion, and types of housing units needed.

The region's suburban and rural mu-nicipalities can expect continued pres-sure to accommodate additional hous-ing for the foreseeable future.

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Households are changing. Single-parent families are most com-mon in the group of three urban com-Southeastern Connecticut's population munities, Groton, New London, and is structured in several different ways, Norwich, where they constitute nearly with each subgroup differing inits hous-40% of all family households with chil-ing needs. The most general distinc-dren under age 18. Most strikingly, in tion is between the population living in 2000 about one out of every five single-group quarters and those living in parent families with children in south-households. Nearly 12,000 individuals eastern Connecticut lived in Norwich.

in 2000 were living in group quarters.

Group quarters consist of such facili- The most dramatic of the changes in ties as convalescent homes, group household structure identified by the homes, college dormitories, military latest census isthe increase of 22% in barracks or correctional institutions. single-person households between Populations in households typically live 1990 and 2000. Incontrast, the region's intraditional single- or multi-family hous- total population grew by only 1%, and ing units either as owners or renters. At the total number of households rose by the time of the 2000 census, 95% of the less than 7%. By 2000, about one out of region's population was living in house- every four households in southeastern holds. Connecticut consisted of a single per-son. This amounted to about 25,000 Two out of every three households in households. More than half of the southeastern Connecticut in2000 were single-person households are concen-family households, consisting of related trated in the group of three urban individuals. The number and relative municipalities.

percentage of family households ishigh-est in the groups of suburban and rural All of the household characteristics de-towns and lowest in the group of three scribed above result in pressure on the urban communities. region's housing supply and production to meet needs that are changing over During the 1990-2000 period, the num-relatively short time periods. The sharp ber of family households in this region increase in single-person households with children under the age of 18 fell by isparticularly significant. Rapid growth nearly 650 families. This was adecline in single-person households, even dur-of a bit more than 2%. The region as a ing aperiod with little growth in the total whole in 2000 had a total of about population, means a growing demand 30,000 family households with children for housing.

under age 18.

Instriking contrast to the decline (-2%)

in family households with children un-der the age of 18 is the 30% growth in the number of families with children headed by a single parent. By 2000, nearly three out of every ten family households with children living insouth-eastern Connecticut were headed by a single parent, either male or female.

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Income affects housing affordability. Homelessness Is a growing concern.

Household income has a direct Homelessness is a significant social bearing on the ability of the region's issue facing southeastern Connecticut population to purchase or rent housing inthe 21 tt century. Asurvey by the Con-suitable to their needs. It is the major tinuum of Care for New London County determinant of whether ahousehold will (now called the Partnership on Hous-be housed well or poorly. ing and Homelessness) in 2001 devel-oped an estimate of more than 600 Estimates produced by the Connecti-homeless persons within the region.

cut Department of Economic and Anecdotal information suggests that this Community Development indicate that figure isconservative.

the median household income in south-eastern Connecticut grew by about 40% The Continuum data indicate that three between 1989 and 2000. Inthe latter population subgroups account for well year the regional median household over half of all the homeless within the income isestimated to be slightly above region. These groups are: those

$56,000. This compares with an suffering from chronic substance estimated statewide median of nearly abuse; those with serious mental illness;

$60,000. those who are victims of domestic violence. These three groups are Income is not distributed evenly among estimated to contain about seven out of the population. Within the group of every ten individuals identified as three urban towns, Groton, New Lon-homeless and about eight out of ten don, and Norwich, the estimated homeless families with children.

median household income was only three-quarters of that for the region as a Population growth is expected to whole. The gap between the town with require more housing.

the highest median income (Ledyard)

Southeastern Connecticut's population and the community with the lowest (New is expected to grow more rapidly dur-London) is estimated to have been ing the first decade of the 21st century nearly $40,000 in2000. Other analysis than it did during the 1990-2000 period.

of the income estimates suggests that If the forecast growth rate of 4.8%

in 2000 about 28,000 of the region's occurs, the region's total population in households had median incomes of 2010 will be about 254,000. The bulk less than $35,000. More than half of of this growth is expected to be in the these households (nearly 16,000) are suburban and rural towns. This growth believed to reside inthe urban commu-will place more pressure on the region's nties. Fully one out of five of the house-housing stock and, specifically, on the holds in the urban towns isestimated to suburban and rural towns to accom-have a median income of less than modate additional housing.

$21,000.

Even allowing for some level of error in the income estimates, it is clear that the residents of the urban communities are at a financial disadvantage in rela-tion to the rest of the region in compet-ing for housing.

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4.Housing Trends and Charactenstics two out of every three single-family Single-family homes dominated housing homes within southeastern Connecti-growth after 1990. cut were located in the suburban and rural towns. Conversely, approximately During the 1990s, the supply of housing two out of every three housing units that available to the residents of southeastern were not single-family, principally multi-Connecticut climbed to a total inventory family units, were found in the group of of 102,295 units in 2000. This was an three urban towns. This clear separa-increase of nearly 6%and compares with tion of housing types among different a growth of 6.6% intotal households and groups of municipalities carries with it of only 1%in total population. This sug- several economic, demographic, and gests a tighter regional housing market in social implications of long-term signifi-2000 than in 1990. cance.

All of the net increase inhousing units in Housing vacancy rates have declined the decade before 2000 was due to growth since 1990.

in the suburban and rural towns.

Colchester alone accounted for more than Of the 102,295 housing units identified 20% of the region's net increase of nearly in southeastern Connecticut in 2000, 5,600 units. At the other extreme, the nearly 94,000 were occupied. Another group of three urban municipalities, 3,300 were vacant but reserved for sea-Groton, New London, and Norwich, ex- sonal, recreational or occasional use.

perienced a net decline in housing units. The balance was classified by the cen-This was due entirely to the loss of more sus as "Other Vacant Units". Itis from than 400 units in New London. this pool of vacant units that housing for sale or rent comes.

In2000, about two-thirds of the region's total housing stock consisted of single- Vacancy rates for both homeowner and family homes, and from 1990-2000, nine rental units dropped by 2000 from their out of ten new units added to the supply levels in 1990. In 2000, the average were single-family homes. The suburban vacancy rate for homeowner units of and rural towns now dominate housing 1.4% fell well below the 2.5% minimum growth insoutheastern Connecticut. Un- generally considered desirable to as-der this condition, single-family homes will sure a reasonably good range of choice constitute a growing share of all housing for homebuyers. The rental market available to regional residents. This appears to have been somewhat better means fewer options for those who do not in2000, with avacancy rate at the time want or cannot afford single-family homes of the census of 6.4%. This is above insuburban or rural settings. Italso means the desirable minimum of 5.0% but is that the existing stock of multi-family hous- below the rate of 1990. But this conclu-ing, much of which isrental, will be under sion should be viewed cautiously. The increased market pressure that can only region's housing market clearly has result inhigher housing costs. gotten tighter since 2000, and contin-ued employment growth in lower-wage A distinct dichotomy exists between the jobs is increasing the demand for rental types of housing available in the urban units.

towns as compared to the suburban and rural communities. In2000, approximately 7

Housing cost in relation to income Isa In the suburban and rural towns, critical Issue. although median housing prices aver-aged about 20% more than in the Changes inhousing cost over time re-urban group, incomes also were higher.

flect shifts in market conditions. The This resulted inamore affordable hous-level of demand for housing inrelation ing situation for most such towns.

to supply, the types of housing desired, the size and quality of units, location, Analysis of 2001 data on the median financing, and construction costs all sales prices of condominium units affect the cost of housing. How hous- showed that these average about 50%

ing costs rise relative to increases in less in cost than single-family units.

income within a municipality or region However, condominium units constitute determines how affordable housing may only a small share of the region's total be at any point intime. And affordability housing stock.

is the key issue affecting how well or Rental housing cost was analyzed us-poorly a population will be housed.

ing Fair Market Rent estimates for 2001 Utilizing median household income produced by the U.S. Department of estimates provided by the Connecticut Housing and Urban Development for Department of Economic and Commu- the New London-Norwich Metropolitan nity Development and actual median Statistical Area (MSA). The rental sales prices for single-family homes in affordability was based on the standard 2001 compiled by the Eastern that housing costing more than 30% of Connecticut REALTORS" Information a household's income isnot affordable.

Service, Inc., this study analyzed the rela-The analysis showed that a family of tive affordability of this type of housing any size earning at least the MSA me-within southeastern Connecticut. The dian income of $57,300 could afford maximum affordability was defined as the Fair Market Rent of all five sizes of a median sales price not more than rental units studied and remain below three times the median annual house-the 30% maximum defining affordability.

hold income for the region or the towns But, as one moves down the income being analyzed.

curve, affordability issues begin to This analysis indicated that in relation emerge. When the family income drops to income, the prices of single-family below the MSA median to the defined homes were least affordable in threshold limits of low-income popula-Stonington, New London, Groton, and tion, the percentage of total income Voluntown, where actual sales prices devoted to housing rises. It is at the exceeded the theoretical maximum af- threshold of very low income that fordable sales prices. The balance of affordability issues become the norm.

the communities did not exceed this For a two-person household the very maximum, but nearly all were within low income threshold in this MSA is 15% of that level. The least expensive $23,300 and for afour-person family it single-family housing was found inthe is$29,150.

group of three urban towns, but when measured against the median house-hold incomes in these communities, this housing was the least affordable.

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Only atwo-person family inthe very-low- industries. Second, the number of income category renting a unit without single-person households isgrowing at aseparate bedroom would pay less than a much more rapid rate than either the 30% of their annual income on hous- total number of households or the total ing. For one- to four-bedroom units, population. Both trends will place families would pay from 32% to 45% of increased pressure on the regional their income on housing. homeowner and rental housing mar-kets with respect to numbers of avail-For those in the extremely-low-income able units, types of units, and affordability.

category, the issue of rental housing affordability can only be described as Assisted housing meets the needs desperate. Incomes for this group of of some.

the population simply are not high Data compiled by the Connecticut De-enough to cover housing costs within partment of Economic and Community the affordability definition of this study.

Development indicate that southeast-For both the two-person and four-per-em Connecticut contained more than son families, the percentage of their lim-12,000 units of assisted housing out of ided annual incomes that would be spent atotal inventory of 102,295 units in2000.

to cover the Fair Market Rents ranges This is about 12% of all housing units from a low of nearly 45% to a high of in the region. Assisted housing 75%. With rare exceptions, the popula-consists of: 1) units which received tion in the extremely-low-income group financial assistance under any govern-must rely on subsidy assistance in one mental program for the construction or form or another ifthey are to secure safe substantial rehabilitation of low and and sanitary housing.

moderate income housing and those While housing affordability has not been units occupied by persons receiving a major concern for most of southeast- rental assistance through either federal ern Connecticut's population, it clearly or state programs; 2) ownership units exists as a chronic/critical issue for financed currently through Connecticut those households whose annual in- Housing Finance Authority and/or comes fall below $35,000. Income dis- Farmer's Home Administration mort-tribution estimates suggest that as many gages; 3) deed restricted properties.

as 28,000 households in southeastern Governmentally-assisted housing ac-Connecticut may be in this difficult po-counted for seven out of ten assisted sition. Even more pressured are the housing units in southeastern Con-15,000 households estimated to have necticut in 2000. Units financed with annual incomes of less than $21,000, mortgages from the Connecticut Hous-more than half of whom are believed to ing Finance Authority or the Farmer's live in the group of three urban commu-Home Administration represented nities, Groton, New London, and Norwich.

nearly all of the balance. Housing with Two trends indicate that housing deed restrictions was a negligible part affordability will become agreater, more of the assisted housing inventory.

visible issue in future years. First, the region's economy continues to shift from relatively high-paying jobs in the manufacturing sector to much lower-paying employment in service 9

The group of three urban towns, Groton, Some population groups have special New London, and Norwich, had a much housing needs.

higher percentage of their total hous-Within the general category of assisted ing stock provided by assisted housing housing are units intended for occu-(20.3%) than did the group of ten sub-pancy by specific subgroups of the urban towns (5.9%) or the group of five region's population. Such housing rural towns (2.4%). About three-makes it easier for certain segments of quarters of all assisted housing units in the population to find suitable accom-southeastern Connecticut in 2000 were modations and reduces pressures on situated in the urban municipalities.

the general housing supply. The more As a result of this concentration, inonly significant types of special housing in-four communities, Colchester, Groton, clude the following:

New London, and Norwich, do assisted Housing for Navy Families: The U.S.

housing units make up more than 10%

Navy provides the largest number of of the municipality's total housing sup-specialized housing units insoutheast-ply. In nine municipalities, half of the em Connecticut. Out of about 3,700 total towns within the planning region, Permanent Party Families at the Sub-assisted housing accounts for less than marine Base inthe fall of 2001, 2,125 5%of the community's total housing

-were housed inunits owned by the Navy.

stock.

The balance of families secured The analysis supports the view that the housing in the regional community.

urban municipalities within southeast- These families are entitled to a Basic em Connecticut carry a much heavier Allowance for Housing. At the time of share of assisted housing than do the the survey, the waiting list for admission suburban and rural towns. In absolute to Navy housing contained 315 fami-numbers of assisted units, Groton isby lies. Navy officials cite a tight housing far the leader, with nearly 3,800 (three market and cost increases that exceed out of every ten assisted housing units raises inmilitary pay as problems.

in the region). Norwich provides more Housing Provided by Local than 3,000 assisted units, and New Lon-Housing Authorities: The eleven don has more than 2,300. These three active municipal housing authorities communities together provide more within the region manage nearly 2,000 than 9,000 assisted housing unds, nearly units of assisted housing. About 60% of three-quarters of the regional total. these are intended for the elderly, al-though non-elderly disabled persons also may occupy these units. Inonly two municipalities, New London and Norwich, have housing authorities con-structed housing for families. These two communities also contain the larg-est number of assisted units for the eld-erly. Of all the housing units insouth-eastern Connecticut developed and managed by local housing authorities, about three out of four are sited inNew London and Norwich.

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Housing for the Elderly: This study The Continuum concluded that addi-identified approximately 2,200 units of tional accommodations for the home-housing reserved for the elderly. This less inthe form of emergency shelters, does not include accommodations in transitional housing, and permanent group quarters. About half of the elderly supportive housing are needed: This units are managed by the municipal need consists of units/beds for 174 in-housing authorities. Development of dividuals and for 191 families with chil-most of the balance has been assisted dren.

through grants, loans or mortgage in-surance provided by the U.S. Depart- 5.Zoning for Housing ment of Housing and Urban Develop-ment. Zoning policies Influence housing supply and distribution.

Tribal Housing: Housing constructed with federal assistance on tribal reser- Through its zoning regulations, a town vations constitutes avery minor portion may encourage certain types of land of the total housing inventory in this re- use while discouraging others. To the gion. The U.S. Department of Housing extent that local zoning permits, discour-and Urban Development aided the ages or prohibits specific types of Mashantucket Pequot Tribal Nation to residential development it affects the build 45 units of family housing. Addi- ability of the housing industry and mar-tionally, with tribal funds, the ket to meet the changing housing needs Mashantucket Pequot Tribal Nation has of the population.

constructed 15 units for elderly tribal Ina 1999 study of local zoning regula-members. The Mohegan Tribe has not tions throughout southeastern Con-utilized federal funds for housing but has necticut, the Council of Govemments committed tribal resources to the con- found that 90% of the land area of the struction of 36 units of housing for eld- region was zoned for some type of resi-erly tribal members. dential use. This amounts to more than Shelter for the Homeless: A study in 500 square miles. The group of ten early 2001 by the Continuum of Care suburban towns contains nearly 60%

for New London County identified vari- of this total residentially-zoned acreage.

ous types of housing targeted to the The rural group of five towns contain homeless. This includes 145 beds and another 30%. This leaves the group of three apartments in nine emergency three urban towns (Groton, New Lon-shelters. All but one of these are don, and Norwich) with just 10% of the located in the group of three urban region's total residentially-zoned area.

communities. Transitional housing, to Significantly, these urban communiies assist homeless individuals and fami- account for 44% of the region's total lies to move from emergency shelters housing units and a whopping 65% of to standard accommodations, consists all renter-occupied units.

of an additional 140 beds and 33 apart-ments. These are operated by eight non-profit organizations, and all are lo-cated within the urban towns of Groton, New London, and Norwich.

11

Without doubt, it is the suburban and minimum lots of at least 1.5 acres. In rural communities that have the great- the group of five rural towns minimum est potential for accommodating addi- lot sizes of 1.5 acres or higher are re-tional housing in the future. This quired in95% of the residentially-zoned underscores the importance of the resi- area. At the higher density extreme, only dential zoning policies in the suburban 2%of the residential zoning inthe sub-and rural towns. Those policies will, to urban towns calls for minimum lot sizes a large extent, determine whether an of less than one-half acre, and the rural appropriate mix of housing at affordable towns have no acreage zoned for this prices will be available to southeastern higher density.

Connecticut's population in the years Zoning to permit multi-family housing ahead.

by right is limited.

Low-density residential zoning The SCCOG study of local zoning in predominates. 1999 disclosed that nearly 100,000 Of the more than 500 square miles of acres of land were designated for multi-land zoned for residential use in the family housing. On first glance, this region in 1999, nearly 90% required appears to be a very generous alloca-minimum lot sizes of 40,000 square feet tion. However, closer inspection reveals (anominal acre) or more. More remark- that only 6%of this total consists of zon-able yet isthe fact that more than 70% ing districts where multi-family of the total zoned for residential use had housing is permitted by right. For the minimum lot sizes of 60,000 square feet remaining 94% of the multi-family (1.5 acres) or more. For the region as a residential zoning, such housing could whole, lot sizes less than 20,000 square be provided only through a special feet (0.5 acre) accounted for less than exception or permit, and fully 60% of 5%of the total area zoned for housing. such multi-family zoning is limited to With about 55% of all residential zoning elderly housing.

calling for minimum lots of 80,000 Most of the land zoned to accommo-square feet or higher, the regional norm date multi-family housing by right is in in residential zoning is two acres or the urban municipalities, and much of higher. At such a high minimum size, that land is developed already. Of the building lots are likely to be used only 6,300 acres in this zoning category for relatively expensive, single-family throughout the region, three out of four homes for owner occupancy.

acres are within the group of urban More than 60% of the residentially- towns consisting of Groton, New Lon-zoned land inthe group of three urban don, and Norwich. Even more shock-towns requires a minimum lot size of ing is the finding that nearly 60% of the less than one acre, and 30% is zoned region's entire inventory of land zoned for less than one-half acre. For the to accept multi-family housing by right group of ten suburban towns, nearly is located in Norwich. This is an ex-70% of the residential zoning calls for traordinarily high concentration of acriti-cally important zoning category in a single municipality. It is clear that the range of options for developing addi-tional for-rent multi-family housing is geographically very limited.

12

Future housing options under current acres that are undeveloped and are zoning policies are narrow. zoned for residential use at minimum lot sizes below one acre or to permit The implications of the zoning pattern multi-family housing by right. The analy-for higher-density housing on meeting sis has a number of limitations, which the housing needs of the region's may be referenced in the full report of changing population are significant.

this study. As a result of these, the find-Those unable to afford single-family ings should be viewed as a preliminary homes on large lots insuburban or ru-reconnaissance rather than definitive.

ral settings will, for the most part, have to look within the urban area to find more Building sites for future higher-density affordable housing to rent or purchase. housing are scarce.

Economic and demographic changes Land identified under the criteria of this make housing affordability increasingly study that could potentially accommo-an issue for those with incomes below date higher-density housing isquite lim-the regional median. Shifts inthe re-ited within southeastern Connecticut.

gional economy have produced a The analysis identified 87 areas, rang-growing number of such individuals and ing in size from 25 to 440 acres, that families.

currently are undeveloped and zoned for residential use at lot sizes less than one acre. For multi-family housing per-6.Potential Areas For mitted by right, the number of areas Higher-Density Housing drops to 25, ranging in size from 25 to

.190 acres.

Future housing depends on the Out of a total of 195,500 undeveloped availability of building sites. acres in the region, 5,800 acres are in The production of housing is highly parcels of at least 25 acres and are dependent on the availability of land zoned to accommodate housing at den-suitably zoned to accommodate the sities of less than one acre. Another type(s) of housing desired. To the 1,700 acres are zoned to permit multi-extent that housing sites are plentiful, family housing by right. The combined housing will be easier to develop and, total of only 7,500 acres identified as potentially, less expensive. The reverse having potential for higher-density hous-is true when land suitable for residen- ing amounts to less than 4%of the total tial use isinshort supply. Housing she undeveloped acreage within southeast-availability isparticularly an issue for af- em Connecticut.

fordable housing, where every effort The study revealed that Norwich has by must be made to control cost. far the highest concentration both of As part of this study, the SCCOG under- undeveloped sites of 25 acres or more took a map analysis to develop a pre- zoned for residential use at lot sizes liminary assessment of the degree to below one acre or zoned to permit multi-which potential sites for higher-density family housing by right of any of the housing may be available. This study region's municipalities. Moderate utilized existing land use and zoning amounts of undeveloped land consid-maps to identify areas of at least 25 ered potentially suitable for higher-den-sity housing also exist in Colchester, 13

Groton, and Waterford. But for most The review of housing education communities, potential sites for future programs reached the following con-higher density housing, likely to be more clusions:

affordable, are very limited or non-

• Only a limited number of housing existent.

education programs is available at Even allowing for the limitations of the this time, and these generally are analysis, the findings support the anec- designed for the clients of the dotal view that residential sites are in agency sponsoring the program.

short supply and are increasingly

• There is no regional or countywide expensive. This suggests that land to coordinated housing education accommodate higher-density housing program.

will be a key challenge in any regional effort to meet future housing needs.

• There is no standard curriculum among the several agencies offer-7.Housing Education Programs ing housing education programs.

The responsibilities of home ownership

• The number of individuals reached can be intimidating. This is especially through the current housing so for first-time homebuyers. Aside from education programs is quite small.

the fundamental issue of responsible, 0 Viewed as a whole, the present lim-realistic financial management, there ited and fragmented housing edu-are day-to-day issues of insurance, cation programs cannot success-property maintenance and repair, and fully attract and effectively serve sig-dealing with lenders, realtors, and con- nificant numbers of individuals who tractors. One way to reduce the stress could benefit from learning about of first-time home owners is through the housing system and the rights educational programs that alert them and responsibilities of renters and to what to expect and to prepare them owners.

to deal with the issues and demands that go with home ownership.

This study identified five non-profit agen-cies within southeastern Connecticut that are conducting programs specifi-cally aimed at educating people for the financial responsibilities and practical issues related to housing. These are:

Eastern Connecticut Housing Oppor-tunities (ECHO), Housing Opportunities for PEople (HOPE), Thames Valley Council for Community Action (TVCCA),

Alliance for Uving, and Shiloh Develop-ment Corporation. Inaddition to these local agencies, the Connecticut Hous-ing Finance Authority (CHFA) partici-pates in some housing educational ef-forts within the region.

14

The review and discussion led to the 8.Selected Housing following conclusions:

Assistance Programs

• A very broad menu of public Efforts in both the public and private programs exists to assist in the sectors to respond to housing needs production, maintenance, and op-that cannot be met through the general eration of housing and to aid housing market depend upon support economically-disadvantaged from various assistance programs of the individuals and families in secur-federal and state governments. Anum- ing safe, sanitary housing. Many of ber of federal or state agencies now of- these programs have been used fer housing aid through a broad variety by avariety of entities within south-of programs. Most of these programs eastern Connecticut.

are targeted to specific populations or

• The very breadth and variety of the to particular types of communities or housing assistance programs can project sponsors. The level of re- be confusing to the inexperienced.

sources provided by the housing assis- Selecting an appropriate program tance programs varies widely, as does and working through the applica-their ease of access and effectiveness. tion process successfully calls for This study reviewed more than fifty fed- specialized expertise that is not al-eral or state housing assistance pro- ways available within the organiza-grams that have been used or have the tion that would like to seek assis-potential to be used in southeastern tance. An organization inthis situ-Connecticut. These are programs ation may need advice from among available through: the U.S. Department a wide variety of consultants spe-of Housing and Urban Development cializing in housing assistance (HUD); the U.S. Department of programs.

Agriculture, Rural Development; the

• The funding trail for some pro-Connecticut Department of Economic grams can be very complex. The and Community Development (DECD); popular Section 8 vouchers pro-the Connecticut Department of Social gram provides a case in point.

Services (DSS); the Connecticut Hous- Funding for the program originates ing Finance Authority (CHFA). Addition- with the U.S. Department of Hous-ally, information on the use of some of ing and Urban Development. The these programs in this region was ob- Section 8 funds allocated to Con-tained inthe course of interviews. necticut are assigned to the De-partment of Social Services, which enters into agreements with the housing authorities of New London and Norwich and with Thames Valley Council for Community Action to administer the program in New London County. The result is multiple layers of administration and oversight.

15

• Anecdotal information suggests that

• Housing for lower-income house-the general complexity of housing holds isconcentrated inthe region's assistance programs is a difficult urban communities. Most subur-challenge for many agencies, par- ban or rural towns are widely ticularlythe smallerones. Interviews viewed as not doing their share to during the course of this study re- accommodate needed affordable vealed that compliance require- housing.

ments associated with housing as-

• If not addressed effectively, the sistance programs are a common region's current housing problems concern at the local agency level.

will worsen and could adversely af-9.Opinions and Comments fect southeastern Connecticut's ability to attract and retain the Gathered Through Surveys workforce necessary for a growing or Interviews economy.

• Obstacles to dealing with regional More than 80 individuals contributed to housing issues are many. They in-the research for this study through sur- clude the following:

veys or interviews. This aspect of the study, in addition to providing data, pro- A Sites physically suitable and duced opinions or views that are appropriately zoned for housing summarized below. are limited and expensive..

The results of the surveys and interviews The availability of public water are of particular importance, since they and sewerage systems is are current assessments by a broadly limited.

varied group of individuals who deal on A Residential builders and labor in a regular basis with specific aspects of the construction trades are in housing issues. We are grateful for their short supply.

cooperation and frank insights.

A Most suburban and rural towns The shift of the region's economy have adopted restrictive from relatively high-paying jobs inthe residential zoning policies.

defense sector to large numbers of lower-paying jobs in gaming and A The local regulatory process tourism has sharply increased the affecting residential develop-demand for housing, especially for ment is complex.

rental units inthe low-moderate price A The high dependence on the range. property tax to fund local govem-

• Southeastern Connecticut is in a ment makes residential develop-housing crisis characterized by a ment financially undesirable to limited supply of units, limited choice most municipalities.

of housing types and locations, and A Public attitudes generally do not an increasing lack of affordability. support the construction of The problem adversely affects additional housing, particularly single-family housing opportunities lower-cost housing.

but is particularly severe for rental housing.

16

• Segments of the population least able to compete inthe tight regional

10. Estimates of Housing Need, housing market are: the homeless, 2000-2005 low-income individuals and fami-lies, single mothers with children, How housing need has been estimated.

families with children at risk from Five population or housing variables lead poisoning, the lower-income are critical to developing estimates of elderly, and unemployed middle- housing need for the region over the aged women. period 2000-2005:

• The housing problem does not Regional population growth from stand alone. Itisintimately interwo- 2000-05. This was projected to be an ven with regional economic devel- increase from 242,759 in 2000 to opment, changes in the region's 248,600 in2005, agrowth of 2.4% over population characteristics, de- the five-year period.

mands on and resources of the so-cial services system, local land use The number of regional residents policies and regulation, and the living in group quarters in 2005.

region's infrastructure, particularly This was assumed to be 12,000 per-water supply, sewerage, and trans- sons in 2005, which is approximately portation systems. the number living in group quarters in 2000.

• The scale and complexity of south-eastern Connecticut's housing cri- The median number of persons per sis calls for a regional response. household in 2005. The housing es-Participants insuch an effort should timates are based on a range of 2.47 include the Council of Govern- and 2.45 persons per household in ments in a leadership role, the 2005. The regional median in 2000 region's municipalities, the State of was 2.47.

Connecticut, appropriate federal The shares of housing units occu-and state agencies, the two tribal pied by owners vs. renters In 2005.

nations operating casinos, other In2000 approximately 65% of all occu-major employers, the building in- pied housing units in the region were dustry, and the many non-profit or- owner-occupied, with renter-occupied ganizations concerned with some units accounting for the remaining 35%.

aspect of housing. Estimates of need produced in this study are based on the assumption that this balance between owner-occupied and renter-occupied housing will con-tinue through 2005.

17

The components of vacant housing intent in selecting vacancy rates above units within the total regional hous- the minima isto encourage an easing of ing stock In 2005. The pattern of va- the tight regional housing market, to cre-cant housing in 2000 is assumed to ate a range of choice in housing types continue to 2005 with two exceptions. and locations, and to avoid further infla-1)The desired vacancy rate for owner- tion of housing cost due to limited supply.

occupancy units is set at 3.0% of all The need for new housing from 2000 to such units. 2)The desired vacancy rate 2005 is substantial.

for renter-occupancy units is set at A range of housing need estimates is 7.0% of all such units. These are above presented in the table below and the the generally accepted minimum va-discussion that follows.

cancy rates of 2.5% for all ownership units and 5.0% for all rental units. The Estimates of Housing Need, 2000-2005 Southeastern Connecticut Planning Region (All estimates rounded to nearest 100.)

Estimates of Population Growth and Housing Unit Needs, 2005 Population and Housing Variables Low Estimate High Estimate Comments 1.Total Population 248,600 248,600 2.4% increase from 2000 2.Population inGroup Quarters 12,000 12,000 11,773 in2000 3.Population to be Housed 236,600 236,600 _ _

4.Median Persons per Household 2.47 2.45 2.47 in2000; 2.58 in1990; 2.77 in1980 5.Households to be Housed 95,800 96,600 6.Housing Units Needed a.Owner-Oocupied Units 62,300 62,800 65% of total, as in2000 b.Vacant-for-Sale Ownership Units 1,900 1,900 3.0% of all ownership units c.Subtotal, Ownership Units 64,200 64,700 d.Renter-Occupied Units 33,500 33,800 35% of total, as in2000 e.Vacant-for-Rent Rental Units 2,500 2,500 7%of all rental units f.Subtotal, Rental Units 36,000 36,300 g.Units Vacantfor Seasonal, Recreational or Occasional Use 3,500 3,500 3,327 in2000 h.Other Vacant Units 2,900 2,900 27% of all vacant units, as in2000 T.Total Units Needed, 2005 (c+f+g+h) 106,600 107,400 7.Total Units Available, 2000 102,300 102,300 8.Additional Units Needed, 2000-2005 a.Total Units . 4,300 5,100 _

b.Ownership Units 2,800 13,300 65% of all additional units c.Rental Units 1,500 1,800 35% of all additional units Source: SCCOG 18

The housing need estimates are built Assisted housing constituted some 12%

upon the projected regional population of all housing units in southeastern in 2005 by applying to that figure a se- Connecticut in2000. However, with the rids of demographic and housing char- shifts inthe region's economy resulting acteristics that either are assumed to in most workforce growth occurring in be likely or are considered desirable. lower-paying service employment, it is This process produced a low estimated probable that the population group that need for 4,300 additional housing units needs low-moderate income housing between 2000 and 2005 and a high isgrowing more rapidly than other popu-estimate of 5,100 units. Achieving lation segments. This argues for a either of these estimates will be achal- greater share of assisted units in the lenge. The low estimate isthe equiva- total housing stock developed between lent of adding 8,600 new housing units 2000 and 2005. Based on this rationale, over a ten-year period, or about 3,000 this study estimates that assisted hous-more net units than were created inthe ing ought to account for 15% of the 1990-2000 decade. For the high esti- region's total new housing units be-mate, its ten-year equivalent is 10,200 tween 2000 and 2005. Applying 15% to new housing units, approximately 4,600 the range of estimates for all new hous-more than were produced in the de- ing needed between 2000 and 2005 cade prior to 2000. results in an estimate of 650-770 new assisted units.

The types of housing that would con-tribute most to creating more affordable From both statistical data and anecdotal ownership units are modest starter information examined in the course of homes, duplexes, townhouses, and this study, several population groups condominiums. Within the rental mar- have been identified as being in need ket, information gathered in this study of additional assisted housing opportu-suggests aneed for more Single-Room- nities. These groups include the home-Occupancy units, units suitable for the less, low-income families with children, elderly, units to accommodate two- households with children at risk of lead person households, and units with poisoning, low-income elderly house-three-four bedrooms for larger families. holds, and individuals who are unem-ployed or are earning very low wages.

The most fundamental housing need is for additional units, both ownership Meeting the region's housing needs and rental, that will be affordable by the will be a difficult challenge.

region's changing population. Meet- Producing more housing units over ing this need will call for the construc- the 2000-2005 period will require tion of more assisted housing. As used vigorous efforts by non-profit housing here, the term "assisted housing' in- sponsors, public agencies, and the cludes housing constructed, rehabili- for-profit housing industry.

tated, renovated, purchased or rented

• Where possible, non-profit spon-with some form of governmental finan-sors should be given greater re-cial support. Such support might in-sources to carry on their work and clude direct grants, loans, mortgage should be encouraged to consoli-insurance or guarantees, or rent assis-date or coordinate their activities.

tance payments.

19

• Local public housing authorities private non-profit agencies, major em-should be key players in responding ployers, and the housing industry. This to the region's housing needs. But chapter will suggest some initial steps unless they are reinvigorated and toward the development of such a co-are provided more resources, their operative effort.

ability to contribute additional units Several Inter-related forces drive housing to meet housing needs isin doubt.

demand, supply, and affordability.

• Even with enhanced capabilities Before considering these next steps, it for the non-profits or public agen-may be useful to re-emphasize the cies, the bulk of housing constructed complexity of the forces within the re-or renovated within southeastern gion that, collectively, have created the Connecticut over the next decade conditions within which aregional hous-will be produced by the for-profit ing crisis developed. The current hous-housing industry. This industry can ing problems are not the product of any be both flexible and innovative, and single agent. Rather, they stem from it has asubstantially greater produc- the interaction of at least five major vari-tion capability than the non-profit ables that influence housing demand, housing sponsors. But disincentives supply, and affordability. These forces to producing certain types of hous- - are intimately interwoven and influence ing will discourage builders from one another in complex ways. The five pursuing their construction. To se- factors are:

cure and maintain the interest of the

• Economic shifts have replaced for-profit housing industry in afford-high-wage jobs in manufacturing able housing, the region will have to with large numbers of lower-paying address currently perceived disin-jobs in service industries.

centives regarding this type of hous-ing and must seek to create new in-

• Population trends have resulted centives for private entrepreneurs. ina continued movement away from urban communities and into subur-

11. Next Steps ban areas and in a sharp increase in the number of single-person Regional cooperation is critical to households.

meeting housing needs.

• Zoning policies at the municipal The housing challenge facing south- level, particularly in the suburban eastern Connecticut isto produce suf- and rural towns, limit the types and ficient numbers of affordable home- location of housing that would be owner and rental units to meet the affordable by low-moderate-income needs of all segments of the region's households. Zoning policies them-population. Successfully meeting this selves reflect a complex set of is-challenge will be neither easy nor swift. sues, including community attitudes To do so will require that rarest and most toward affordable housing, the de-fragile of commodities, regional coop- pendence of local government on eration. The present housing crisis can property taxes, the "quality of life",

be addressed effectively only through environmental protection, and the cooperative efforts of the municipalities, availability or lack of water and sew-tribal nations, the State of Connecticut, erage systems.

20

• Limited Infrastructure, especially throughout the region. Phase One water supply, sewerage, and trans- should begin as soon after release of portation systems, inhibits the devel- the published regional housing study opment of higher-density housing. as possible.

• Limited building sites that are Primary responsibility for conducting physically suitable, appropriately Phase One of the consensus-building zoned, and priced reasonably make effort lies with the four agencies that it more difficult to develop affordable sponsored the housing study and par-housing. ticipated in its preparation. It may be most efficient to have one lead agency to coordinate the public awareness pro-gram. Because of its legal standing under the Connecticut General Stat-utes and its formal relationship to the region's municipalities, it would be logi-cal for the Southeastern Connecticut Council of Governments to fill this lead agency role.

Phase Two: Seeking Stakeholder Commitment: This phase will have two Developing a regional consensus main objectives. The first is to move on housing Is a necessary first step. from building community awareness to Creating an environment within which seeking community agreement on the the regional community can formulate need for action. The second is obtain-specific courses of action to address ing through one or more public forums housing issues calls for a high level of community endorsement of a represen-interactive communication. A regional tative coalition to coordinate future ac-consensus on what should be done, tivities on housing issues. Phase Two how it should be done, and who should could be initiated before Phase One is be responsible for specific actions is completed. Inany event, not too much an essential first step. Absent such com- time should pass between the release munity agreement, efforts toward meet- of the study and the scheduling of a fo-ing housing needs will continue to be rum.

fragmented and, potentially, working at The conduct of Phase Two will require cross-purposes. the sponsorship and support of the four Consensus-building focused on a re- agencies that partnered on the hous-gional response to housing issues will ing study. Again, it would be most effi-involve three phases of activity. cient to have a single lead agency to manage this phase of the consensus Phase One: Raising Community building program. This could be the Awareness: The primary objective of same agency that served as the lead in this activity will be to disseminate as Phase One or it could be a different widely as possible the findings and con- agency. Itwould be desirable that the clusions of the regional housing study.

A secondary objective will be to stimu-late discussion of housing issues 21

lead agency for Phase Two be per- local regulations so as to mini-ceived as "regional". mize or eliminate disincentives to housing production.

Phase Three: Establishing a Regional Coalition on Housing: A Work with representatives of the Initiating Phase Three depends on the building industry to seek ways to outcome of the public forum(s) held in create incentives for housing Phase Two. Ina worst case, the forum production.

discussion could be inconclusive as to A Work with legislators and other the need for a housing coalition. Or the state officials to identify and re-conclusion could be that some exist-move systemic impediments to ing entity could serve that function. Pos-housing production.

sibilities include the United Way, the Council of Governments or the Partner- A Seek to assist instrengthening ship on Housing and Homelessness. the housing production capaci-Assuming that the forum discussion ties of local public housing supports the formation of a regional authorities and non-profit coalition on housing, the immediate housing sponsors.

follow-up tasks include:

A Seek the cooperation of major e The individuals or agencies to be employers to meet the housing represented on the coalition must needs of the region's workforce.

be identified and invited to serve.

A Monitor changing economic,

• The coalition must organize and demographic, and housing char-select a chair. acteristics to refine and update estimates of housing needs upon

• The coalition will require some staff which to base regional action.

support. Options include staff loaned by some existing agency, new staff (to be paid for by some as yet unidentified funding), or consult-ant assistance on an as-needed basis (again involving cost). Assis-tance needed will range from simple logistical support to technical re-search and guidance.

• Although the coalition would deter-mine its own agenda for action, pri-ority activities that could be consid-ered by the coalition once it forms include the following:

A Work with local zoning officials to review, and potentially revise, 22

Individuals Responding to Surveys MUNICIPAL PLANNERS: Town of Bozrah: Richard Serra, Town Planner. Town of Colchester: Harry Smith, AICP, Planning Director. Town of East Lyme: Meg Parulis, Director of Planning. Town of Franklin: James Rabbitt, AICP, Town Planner. Town of Griswold: Mario Tristany, Town Planner. City of Groton: Michael Murphy, AICP, City Planner. Town of Groton: Mark Oefinger, AICP, Director of Planning and Development. Town of Ledyard: Barbara Goodrich, Town Plan-ner. Town of Lisbon: James Rabbitt, AICP, Town Planner. Town of Montville:

Marcia Vlaun, AICP, Town Planner. City of New London: Peter Gillespie, City Planner. Town of North Stonington: Richard Cooper, Planning Coordinator. City of Norwich: Peter Davis, Director of Planning and Neighborhood Services. Town of Preston: Kathy Warzecha, Town Planner. Town of Salem: Heidi Samokar, Town Planner. Town of Sprague: Thomas Seidel, Town Planner. Town of Stonington: Mary Villa, ASLA, Planning Director. Town of Waterford: Thomas Wagner, AICP, Director of Planning.

MUNICIPAL HOUSING AUTHORITIES: Town of Colchester: Robert Gustafson, Executive Director. Town of Griswold: John Hoddy, Executive Director. Town of Groton: Therese Jourdan, Executive Director. Town of Ledyard: Jane Christensen, Executive Director. Town of Montville: Carol Lathrop, Executive Director. City of New London: Richard Leco, Executive Director. City of Norwich:

Charles Whitty, Executive Director. Town of Preston: Carol Onderdonk, Execu-tive Director. Town of Sprague: Marie Davis, Senior Coordinator. Town of Stonington: Janice Lariviere, Office Manager. Town of Voluntown: Joseph Theroux, Chairman.

TRIBAL NATIONS: Mashantucket Pequot Tribal Nation: Robert Birmingham, Tribal Program Manager, Projects-Property Department. Joann Frank, Foxwoods Senior Vice President-Human Resources. Stan Harris, Jr., Executive Assistant to the Tribal Chairman. Michael Van Leesten, Executive Assistant to the Tribal Chairman. James Wherry, Executive Assistant to the Tribal Chairman. The Mohegan Tribe: Chuck Bunnell, Deputy Chief of Staff, Mohegan Tribal Council.

Robert Soper, Senior Vice President of Administration, Mohegan Sun.

OTHERS: Barbara Beeler, Navy Family Housing Director, U.S. Naval Submarine Base.

Individuals Interviewed Peter Battles, President, Eastern Connecticut Housing Opportunities, Inc. (ECHO).

John Beauregard, Executive Director, Workforce Investment Board of South-eastern Connecticut, Inc. John Bolduc, Executive Vice President, Eastern Con-necticut Association of Realtors, Inc. Chuck Bunnell, Deputy Chief of Staff, Mohegan Tribal Council. David Burnett, Executive Director, Reliance House, Inc. William Christopher, President, Lawrence & Memorial Hospital. John DeCiantis, DeCiantis Construction, LLC. Elaine Fry, Associate Director, Reli-ance House, Inc. Lee Ann Gomes, Department of Social Services, 23

City of Norwich. Barbara Goodrich, Director of Planning, Town of Ledyard. Dwight Goodwin, Homeless Program Director, Reliance House, Inc. Beverly Goulet, Director of Social Services, City of Norwich. Marilyn Graham, Executive Director, Housing Opportunities for PEople, Inc. (HOPE). Marlene Heald, Director of Social Services, Town of Ledyard. Sylvia Hemphill, Executive Director, Shiloh Develop-ment Corporation. Everett Hyde, Shelter Building, LLC. Thomas Hyland, Execu-tive Director, Martin House, Inc. Leon Jacobs, Tribal Manager, Mashantucket Pequot Tribal Nation. Pamela Kilbey-Fox, Director of Health, City of New London.

Mary Kohanski, Vice President, Human Resources, W.W. Backus Hospital. Erik Kudlis, Erik's Design-Build Associates, Inc. Kathryn Kuhn, Community Develop-ment Director, City of Norwich. Nick Latera, Latera Construction, Inc. Renee Main, Executive Director, Builders Association of Eastern Connecticut. John Markowicz, Executive Director, Southeastern Connecticut Enterprise Region, Inc.

Peter McDonald, Housing Officer, U.S. Coast Guard, New London. Deborah Monahan, Executive Director, Thames Valley Council for Community Action, Inc.

Michael Murphy, Assistant Director of Planning & Development, Town of Groton.

Mark Oefinger, Director of Planning &Development, Town of Groton. Jane O'Leary, Program Coordinator, Thames River Family Program, Thames River Community Service, Inc. Janet Dinkel Pearce, President, United Way of Southeastern Con-necticut. Michael Rosenkrantz, Executive Director, The Alliance for Living. Will-iam Satti, Director, Public Affairs, Mashantucket Pequot Tribal Nation. Charlotte Schroeder, Assistant Director, Office of Development & Planning, City of New London. Michael Scarpa, Wolman Construction. Patricia Serluca, Social Work Supervisor, Department of Health and Social Services, City of New London. John Shea, Chief of Governmental Relations, General Dynamics/Electric Boat. Tony Sheridan, Director of Community Relations, Dominion Resources. Lisa Shippee, Director, Comprehensive Neighborhood Services, Thames Valley Council for Com-munity Action, Inc. John Smey, Director, Catholic Charities & Family Services, Diocese of Norwich. Robert Soper, Senior Vice President of Administration, Mohegan Sun. Johan Strandson, Rural Development Manager, U.S. Depart-ment of Agriculture. Michael Van Leesten, Executive Assistant to Chairman Ken-neth Reels, Mashantucket Pequot Tribal Nation. Marcia Vlaun, Director of Plan-ning, Town of Montville. James Wherry, Executive Assistant to Chairman Kenneth Reels, Mashantucket Pequot Tribal Nation. G. Christopher Widmer, Executive Director, Alderhouse Residential Communities, Inc. David Whitehead, Vice President, Corporate Communications, W.W. Backus Hospital. David Yovaisls, Chief Development Officer, Thames Valley Council for Community Action, Inc. Faith Bessette-Zito, Senior Development Manager, Community & Housing Development Division, Eastern Region, Connecticut Department of Economic and Community Development.

The cooperation and assistance provided by all of the individuals responding to surveys or participating in interviews isgratefully acknowledged.. Without their help, this study would not have been possible.

24

ANALYSIS OF SELECTED DATA AND UPDATED FORECASTS OF HOUSING NEED FOR THE SOUTHEASTERN CONNECTICUT PLANNING REGION, 2000 - 2010 Southeastern Connecticut Council of Governments March 2004 Study Update Prepared by: Richard B. Erickson, AICP

I Analysis of Selected Data and Updated Forecasts of Housing Need for the Southeastern Connecticut Planning Region, 2000 -2010 INTRODUCTION This report updates several elements of the 2002 report, Housing a Region in Transition:

An Analysis of HousingNeeds in Southeastern Connecticut, 2000 - 2005, and extends the forecast of regional housing needs to 2010. This updating is being performed at the request of the Southeastern Connecticut Council of Governments (SCCOG) and is intended for use by the region's Blue Ribbon Housing Initiatives Panel.

An updating of the earlier housing analysis is appropriate at this time for several reasons.

First, the updating will provide an opportunity to assess the level of progress in meeting the regional housing needs anticipated in the 2002 study. Second, this current review will provide more recent information on housing cost trends throughout southeastern Connecticut. Third, with 2005 less than 12 months away, it will be useful to extend the forecast of housing needs out to 2010.

This report is organized into five sections: Population Growth and Projection, 2000 -

2010, page 1; Housing Production, 2000 - 2003, page 2; Residential Sales Prices, 2000 -

2003, page 4; Estimates of Housing Need, 2000 - 2005 and 2010, page 6; Conclusions, page 9.

POPULATION GROWTH AND PROJECTION, 2000-2010 In 2000 the U.S. Census of Population and Housing enumerated a total regional population of 242,759. The most recent forecast of population change within southeastern Connecticut since the census is one prepared in 2004 by the Connecticut Economic Resource Center, Inc. (CERC). That forecast was prepared for use in a Comprehensive Economic Development Strategy (CEDS) for the southeastern Connecticut region. The CEDS preparation is a joint project of the Council of.

Governrments, the Southeastern Connecticut -Enterprise Region; Inc., and a number of other participating organizations.

The CERC forecast is much more recent than that produced by the Connecticut Department of Transportation (CONNDOT) that was used in the regional housing study of 2002. Accordingly, we will use the CERC projections in a later section of this report I

as the basis for extending the housing needs forecast out to 2010. The CERC forecasts are summarized in the Table 1 below.

TABLE 1: Forecast of Total Population, 2000 - 2010 Southeastern Connecticut Pa1nmng Region '

Municipal Classifications Actual, 2000 Low Forecast, 2010 High Forecast, 2010 Urban Towns (3) 101,695 93,000 94,000 Suburban Towns (10) 125,495 137,000 140,000 Rural Towns (5) 15,569 17,000 19,000 Regional Totals: 242,759 247,000 253,000 SOURCE: Connecticut Economic Resource Center, Inc.

NOTES: e * . -  : i ",,

1.. The CERC forecasts have be'en rounded to the nearest 1,000.

2. The municipal classifications are:.i-'r Urban Towns; Groton, New London, and Norwich. - 7, Suburbari Towns: Colchester, East Lyme, Griswold, Ledyard, Lisbon, Montville, Preston, Spargue , S tonsington, and Waterfo d .

Rural Towns: Bozrah, Franilin, North Stonington, Salem, and Voluntown.

It should be noted that the high t6tal population fo'recast by CERC is lower by I,000

'people than the CONNDOT'regional projeictio' fidr 2010 (h`asdjustid by the SCCOG) used in the 2002 regional housing study prepared' bythe SCCOG.' (See Table 3.24 in 'the 2002 regionallhbusing stludy.) More significantly, CERC i§-projecting a continued loss of population from the group of three urban communities, while CONNDOT forecast' modest growth for these communities after 2000. This conclusion by CERC is certainly open to debate. 'However,;'this point is not an impediment inn the'&currefit analysis, since the housing need forecasts for this report are focused on'the regibo as awhole.'

. .  !  !',,i,,;f "

The low forecast (247,000) by CERC for 2010 is predicated on continued employment growth in all regional industrial sectors except Leisure and Hospitality. Under the CERC low forecast, the Leisure arid' H6spitality s'e6tor is as'sumed to remain stable, with little or no growth through 2010. For the past ten years, Leisure and Hospitality has been the region's fastest growirfg e'mployment sect6'rdiue to the 'devel'priienttof the Foxwoo'ds' Resort Casino and the Mohegan' Sun Casino. This scenario pr-jeects' ai.o/o increase ihithe region's population betweein 2000 and 2010, resulting in "anrt gain of about'5,000 residents. -. '

CERC's high forecast (253,000) for 2010 anticipates'employment growth in all eco'noinid sectors.' This scenario indicat'esa64.5%/o growth iin'the iegion's population between 2000"'

and 2010. This rate of growth is considerably higher than the 10% population increaise""'

for southeastern Connecticut in the 1990 - 2000 decade. The high forecast projects a population increase on the' order of- 10,000 over' the 2000 - 2010 decade.'

HOUSING PRODUCTION, 2000 - 2003 The regional housing study published in 2002 suggested that the southeastern Connecticut region had a need for between 4,300 and 5,100 additional housing units 2

between the total identified by the 2000 U.S. Census and 2005. The study also recommended that 35% of new housing construction should be rental units, with the remaining 65% consisting of units intended for owner occupancy.

We can assess how well the region is meeting these identified needs by examining information on the number of residential building permits issued by southeastern Connecticut municipalities between 2000 and 2003. The U.S. Census Bureau compiles such data from records submitted by municipalities. This information is summarized in Table 2 below.

TABLE 2: Residential Building Permits Issued by Classifications of Municipalities, 2001 - 2003 Southeastern Connecticut Planning Region Municipalities 2000 2001 2002 2003 Total, 00-03 Urban (3) . 93 92 220 455 860 Suburban (10) 291 492 478 524 - 1,785 Rural (5) 49 79 97 88 313 TOTAL: 433 663 795 1,067 2.958 SOURCE: U.S. Bureau of the Census, Residential Construction Branch.

NOTE: The 2000 data have been adjusted to include only post-census (April 2000) permits.

Two cautionary points: 1) The above data do not reflect residential demolition permnits, which average 75-100 units per year for this region. 2) The data are for building permits, issued in advance of construction. 'There is some potential that not all issued permits actually resulted in the construction of housing units.

As a result of these two factors, the building permit data may overstate to a minor degree the net addition to the region's stock of housing over the 2000-03 period. In spite of this, the residential building permit data provide a reasonably accurate measure of housing production for purposes of assessing progress toward meeting the-region's housing needs.

The Census Bureau data show a steady rise in the number of residential building permits issued within the region from 2000 through 2003. Nearly 3,000 such permits were issued over the four-year period. Most notably, the rate of permits was highest in'2003, totaling more than 1,000 units. If this level is sustained through 2004 aid 2005, the-ttal '

production of new housing units over the 2000-05 period would be approxiniately 5,000.

That figure is almost exactly the 2002 regional housing study's high estimat6 (5,100) for new housing units needed by the region over the 2000-05 period.

Also of concern are the types of housing for which building'permnits'were issued. Of the nearly 3,000 units permitted from 2000-03, 2,558 units (86%) were single-family units.

We can assume that almost all of these will be owner-occupied. Permits' for two-family homes accounted for another 48 units, and 352 units of multifamily housing were authorized by building permits. Thus, only 14% of the total new housing units for which building permits were issued can be considered as contributing to the supply of rental housing. This is less than half the share of rental units (35%) among all new housing that was recommended in the 2002 regional housing study.

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. t 4ii. ; ,, .4 . , .,. - re ^ ^. . j The building permit data s'liow that the dominance of single-family home's in the region's housing inventory noted in the 2002 regional housing study;continues. The increase in' rental housing construction since 2000 has not kept pace with the construction of single-family, ownership housing> If this pattern persists, it can'only increase pressures on, the limited supply of existing rental housing units.- This will, ih turn; make'it harder for individuals and families to find rental housing they can afford'.-;

Whether the high permitting level of 2003 will be maintained is uncertain. This is particularly true because it was the group of three urban communities (Groton, New London, and Norwich) that-'prdduc&d the surge of residential'Ipermits in 2003.

Collectively, the urban co'mmunities accounted for more. thn 40% of the 1,067 residential building permits issued in that year. The City of Norwich, alone, issued almost one-quarter. of all residential building permits within southeastern Connecticut in 2003. The 247 residential building permits issued by Norwich in 2003' are about eight times the number (29)' issued by the city in 2000. Absent the high housing activity in '

Norwich, the regional housing picture would be much less positive.

On balance, the residential building permit data suggest'that the region has made some progress toward 'ineting'tlie ne~ed for new housing units. 'owever, this achievement rests on a rather narrow base of a limited number of communities that have attracted and have' permitted significant numbers of units. Additionally, holusinig construction so far in this' decade hads failed to6ieet the need for more rental housing units. In fact, rental housing is declining as a percentage of all housing units "ithin southeastern Connnecticut.

.RESIDENTIAL SALES PRICES, 2000 - 2003 Data fromnthe Eastern Connecticut REALTORS Information Service, Inc., shows rapidlyOrishig sales pfices for single-family homes and condominium units during the 2000-03 peiribd. (!s6 ba~l63 below.)

For the region as a whole, the average single-family median sales price among the -j region's l~~"-m"n18i icipalities'gre'w by more than 50%. The rateorincreaseinthe'group.of three urban communities was even higher, at nearly 67%. This differential suggests that single-familylhousing i'ngurban settings that was considerldlessdesirable before 2000 is now seen as more affo'rdable and,'therefore, more attractive relative to more costly housing in subirban or rural c6mmunities. (The average mneidian sales price for single-71 .

family homes in the urban group of towns was about 20% less than thiat in the group of suburban towns in 2003.) The effect has been sharp price increases in the urban municipalities. This interppretation also suggests that horiebuyers are fa'cinig particularly stiff o~titio ri fdr less expensive stf competitionfor .k . housing.

Condominiui'priffii s6 i6se significantly between 2000 'and 2003, but'a

'ofless' tha-n:40%:'.Therinse' in theaverage mediansalespcesof ondominium units among the regionii's municipalitie 'vas lesst an that for singl efamily homes. In this case, the group of'siilu'rba towAns, rather than the urban communities,;experienced the highest price increases for condominium units, nearly 50%. This indicates that the 4

i demand for housing in the suburban towns continues at a high rate and that some buyers are opting for condominium units as a more affordable way, to reside in such communities. (Median sales prices for condominiums in the group of suburban towns averaged less than half the prices for single-family homes in those communities.) Once again, the evidence points to sharp demand for housing at the low-mid-range in the price curve for housing.

TABLE 3: Average Median Sales Price (MSP) for Single-family Homes and Condominium Units by Municipal Classifications, 2000 - 2003 Southeastern Connecticut Planning Region Municipal Classifications & Average Among MSP, $ Percent Increase, Residential Types 2000 2003 2000 - 2003 URBAN: (3)

Single-family 110,442 184,150 66.7 Condominium 63,750 74,900 17.5 SUBURBAN: (10) X .. , , , .

Single-family 144,880 221,502 52.9 Condominium

• 70,666 104,766 48.3 RURAL: (5)

Single-family 144,940 -213,900 47.6 Condominium ** ** **

REGIONAL TOTAL: (18) ,

Single-family 139,240 213,165 53.1 Condominium *** 68,361 94,811 38.7 SOURCES: Eastern Connecticut REALTORS Information Service, Inc., and calculations by R. Erickson.

NOTES:

• 6 municipalities in 2000 and 2003. Stonington was excluded from both years because its median sales price was 2.5 - 5.0 times higher than those of other suburban communities.

• • Not statistically significant.

• • • 9 municipalities in 2000 and in 2003.

A comparison of the data in the above table with data contained in Table 4.8 of the regional housing study published by the SCCOG in 2002 shows the following:

• For the region as a whole, the average median sales price for single-family homes rose from $157,250 in 2001 to $213,165 in 2003. This is an increase of 35.6%, or an annual growth rate of 18%.

• Again, for the region as a whole, the average median sales price for condominium units rose from $73,890 in 2001 to $94,811 in 2003 (excluding the extremely high median condominium sales prices in Stonington in both years). This is an increase of 28.3%, or an annual growth rate of 14%.

Clearly, the upward pressure on housing cost continues and remains a serious economic and social challenge for the region.

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The scope of the current housing analysis did not include examination of the cost trends; in rental housing.. However, one can reasonably conclude from the evidence regarding.

housing sales prices, plus the slower rate of construction for, new rental unitsdiscussed.

above, that rental costs have moved upward as well. A detailed review of this topic --is would be a useful future task. i ESTIMATES OF HOUSING NEED, 2000 - 2005 and 2010 Tables 4 and 5 on pages 7 anAd' 8 use the same basic 'methodblogy as that of the 2002 regional housing study to e'stimnate housing needed in southeastern Connecticut over the 2000 - 2010 period.- (See Table 10.2 in the 2002 housing study.) However, the current forecasts vary,from those in the 2002 report in four respects.

1) The forecast methodology has been applied to the updated population projections by.

CERC presented-in Table I of this report.

2) Projections of housing need are provided for two different time periods, 2000 - 2005 and 2000 - 2010.

3) The Median Persons per Household has been held at 2.45, a decline from the ratio of 2.47 found by the 2000.U.S. Census. The rationale for this decision is the'more than, thirty-year downward trend in persons per household plus the fact that southeastern' Connecticut experienced a dramatic (22%) growth in single-person households from 1990 - 2000. The social and economic forces contributing to the substantial inicrease in single-person households continue and are expected to produce a further decrease in the average househld size through the present decade.

4) The current methodology accounts for the replacement of demolished housing units, a factor that was not addressed in the 2002 analysis.

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TABLE 4: Estimates of Housing Need, 2000 - 2005 Southeastern Connecticut Planning Region (Al! estimates rounded to nearest 100.)

Estimates of Population Growth and Population and Housing Variables Housing Needs, 2005 Comments Low Estimate High Estimate  :

1. Total Population 245,500 247,500 242,000 in 2000.

2. Population in Group Quarters 12,000 12,000 11,773 in 2000.

3. Population to be Housed 233,500 235,500 _

4. Median Persons per Household 2.45 2.45 2.47 in 2000. X

5. Households to be Housed 95,300 96,100 _

6. Housing Units Needed

a. Owner-occupied Units 61,900 62,500 65% of total, as in 2000.

b. Vacant-for-sale Ownership Units 1,900 1,900 3% of all ownership units.

c. Subtotal, Ownership Units 63,800 64,400

d. Renter-occupied Units 33,400- 33,600 35% of total, as in 2000.

e. Vacant-for-rent Rental Units 2,500 2,500 7.0% of all rental units.

f. Subtotal, Rental Units 35,900 36,100

g. Units Vacant for Seasonal, Recreational or Occasional Use 3,500 3,500 3,327 in 2000.

27% of all vacant units, as

h. Other Vacant Units 2,900 2,900 in 2000.

Average of 80 demolitions

i. Replacement of Demolished Units

• 400 400 per year.

j. Total Units Needed (c+f+g+h+i) 106,500 107,300  :

7. Total Units Available, 2000 102,300 102,300

8. Additional Units Needed, 2000-05

a. Total Units 4,200 5,000 - - -

b. Ownership Units 2,700 3,300 65 % of all additional units.

c. Rental Units 1,500 1,700 35 % of all additional units.

The forecast for additional housing needed in southeastern Connecticut over the 2000 through 2005 period ranges from a low of 4,200 total units to a high of 5,000 units. -'The building permit data from Table 2 of this report show that current housing production levels, if sustained, will produce a total number of additional housing units within this range. However, available data on the types of housing units authorized by building permits indicate that the region will not reach the point where at least 35% of all new housing construction is rental units. Multifamily housing units, principally rental, accounted for only 14% of all housing units permitted within the region from 2000 through 2003.

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Table 5 below provides a forecast of additional housing need in the region for the period 2000 through 2010. The low estimate of need is a total of 5,200 additional units. The high estimate suggests a need for 8,000 additional housing units over the decade.

Achieving the low forecast would require sustaining an average production rate of 520 new housing units per year. Based on residential building permits issued over the past four year, this average rate appears to be achievable. The high estimate of housing need will be more of a challenge. To reach the forecast need of an additional 8,000 housing units by 2010 will require an average annual production rate of-700 units from this point forward. To reach this level, the region would have to maintain the higher production rates experienced in 2002 and 2003.;

To achieve the i&&o6m-nended balance between ownership housing (65%) and rental housing (35%) will'require a-major shift in housing production away from single-family-units. The experience over the past four years suggests that market force's alone will not' produce such a refocusing. While the estimated need for additional rental housing may.-

technically be' accurate, recent experience indicates that the likelihoodof the need being met by 2010 is questionable.

' TABLE 5: Estimates of Housing Need, 2000 - 2010 Southeastern Connecticui Planning Region

'(Al estimates rdunded to nearest 100.) ' ' - _ - -

an .- 'Estimates of Population Growth and Population andHousing Variables Housing Needs, 2010' ' Comments X Low Estimate High Estimate -_ T._ ._,___.

1. Total Population--- 247,000 253,000 242,000 in 2000.

2. Population in Group Quarters 12,000 12,000 :11,773 in 2000.

3. Population to be Housed 235,000 241,000

4. Median Persons per Household:. 2.45 2.45 2.47 in 2000.

5. Households to be Housed ' 95,900 98,400

6. Housing Units Needed

'a. Owner-occupied Units 62,300 64,000 65% of total, as in 2000.

'b. Vacant-for-sale Ownership Units , 1,900 2,000 3% of all ownership units.

~c. Subtotal, Ownership Units 64,200 66,000

-d. Renter-occupied Units' 33,600 34,400 35% of total, as in 2000..

e; Vacant-for-rent Rental Units - 2,500 2,600 7.0% of all rental units.

f' Subtotal, Rental Units, . 36,100 37,000 g.,Units Vacant for Seasonal, Recreational or Occasional Use 3,500 3,500 3,327 in 2000.

27% of all vacant units, as

h. Other Vacant Units 2,900 3,000 in 2000.

Average of80 demolition

i. Replacement ofDernolishedlUnits 800 800 per year.

j. Total Units Needed (c+f+g+h+i). 107,500 110,300

7. Total Units Available, 2000,, 102,300 102;300 ;4 i

8. Additional Units Needed, 2000-10 _ ,

a. Total Units' 5,200 8,000

b. Ownership Units 3,400 5,200 65 % of all additional iunits.

c. Rental Units 1,800 2,800 35 % of all additional units.

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CONCLUSIONS

1. The region has the potential to meet the total number of additional housing units (4,200 - 5,000) estimated as needed by 2005 if production trends over the past several years are sustained.

2. However, the region will fall far short of meeting the balance between owner-occupied housing (65%) and rental units (35%) forecast as needed by 2005 if current construction trends continue. To date, market forces alone have not been sufficient to stimulate the construction of rental housing at a rate capable of meeting anticipated need.

3. If the pace of housing construction averages at least 500 units per year over the remainder of this decade, it should be possible to produce the 5,200 total units identified as the low estimate of need between 2000 and 2010. Meeting the high estimate of total new housing units needed by 2010 (8,000) will require an average annual production rate of about 700 units over the balance of this decade. While that level of housing production was exceeded in 2002 and 2003, it may not be maintained over the longer term.

4. As was the case with the 2005 scenario, balancing the mix of owner-occupied housing (single-family and condominium units) with rental units needed in 2010 will be a challenge. For 2010, the high forecast suggests that 35% of all housing units should be rental. To achieve this, 2,800 new rental housing units would be required between 2000 and 2010. To date, only about 400 multifamily units, principally rental, have been granted building permits. Unless the rate of production for rental housing units increases dramatically, and soon, it will not be possible to meet the high estimate of rental need in 2010.

5. It appears that it will take more than market forces to stimulate rental housing production to the levels that will satisfy the anticipated needs in 2005 and 2010. Such stimulation could include a combination of financial subsidies coupled with innovative zoning changes to create a more attractive construction environment for the for-profit housing industry, coupled with expanded resources to encourage rental production by public and private, non-profit housing agencies.

6. Residential sales price data for the period 2000 through 2003 show that housing affordability remains a serious issue for the region. Over that time period, the average median sales price for single-family homes among the region's 18 municipalities grew by more than 50%. The increase for condominium units was nearly 40%. Even if housing production meets the projected number of units needed by 2005 and 2010, affordability will continue as a major concem. If production fails to meet housing demand, the price of housing will escalate further.

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