OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-6611
AN ACT CONCERNING A NEEDS ASSESSMENT AND OTHER
POLICIES REGARDING AFFORDABLE HOUSING AND
DEVELOPMENT.
Primary Analyst: DD 4/20/21
Contributing Analyst(s): EMG, AN, MP, PR
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $ The Out
Years
Treasurer, Debt
Serv.
GF - Cost See Below See Below See Below
Policy & Mgmt.,
Off.; Department
of Housing
GF - Cost Up to
200,000
Up to
150,000
Up to
412,000
annually
Department of
Housing
GF – Potential
Cost
None None Significant
State Comptroller
- Fringe Benefits
1
GF - Cost None Up to 80,000 Up to
170,000
annually
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 22 $ FY 23 $
Various Municipalities STATE
MANDATE
2
- Potential
Cost
See Below See Below
1
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.3% of payroll in FY 22 and FY 23.
2
State mandate is defined in Sec. 2-32b(2) of the Connecticut General Statutes, "state
mandate" means any state initiated constitutional, statutory or executive action that
requires a local government to establish, expand or modify its activities in such a
way as to necessitate additional expenditures from local revenues. 2021HB-06611-R000543-FN.DOCX Page 2 of 4
Explanation
The bill results in 1) state administrative costs, 2) costs to state
affordable housing programs, and 3) potential municipal
administrative costs. These costs are described below.
The bill requires the Office of Policy and Management (OPM) and
Department of Housing (DOH) to assess the statewide unmet need for
affordable housing, and to distribute that unmet need among planning
regions, and municipalities within those regions. The bill establishes a
process (administered by DOH and OPM) by which municipalities
must meet their allocated unmet need. If after this allocation process,
there is still unmet need, the bill requires DOH to meet that unmet
need via housing vouchers and construction subsidies.
State and Municipal Administrative Costs
It is anticipated that OPM and DOH will cumulatively need up to
five new positions to administer the bill's provisions. As an
illustration, there is an annualized cost of up to $582,000 ($412,000 for
salaries and $170,000 for fringe) associated with three housing
specialists, one planning specialist and a community development
director. It is anticipated that this annualized cost would first be
incurred in FY 24, but that costs of up to $230,000 could be incurred in
FY 23, depending on the start date of the new employees.
It is not clear which positions would be established within each
agency. The bill designates some responsibilities to both agencies
while designating other responsibilities specifically to one. For
example, the bill requires both agencies to determine the allocation of
each municipality's fair share base, but only requires DOH to perform
random audits of municipal fair share units.
The bill is additionally anticipated to result in up to $200,000 in
consultant costs to assist OPM and DOH in establishing the bill's
provisions.
The bill requires municipalities to develop plans for achieving the 2021HB-06611-R000543-FN.DOCX Page 3 of 4
local unmet need. If a small municipality does not currently have the
resources to develop and administer such a plan, it may incur staffing
or consulting costs to achieve this requirement.
The bill may result in the expanded use of the General Obligation
(GO) bond-funded Flexible Housing program to subsidize the
development of affordable housing. As of April 20, 2021, unallocated
bond balance available to the program is approximately $163 million.
The bill does not change GO bond authorizations relevant to the
program. Future General Fund debt service costs may be incurred
sooner under the bill to the degree that it causes authorized GO bond
funds to be expended more rapidly than they otherwise would have
been.
The bill allows aggrieved parties to bring an action in Superior
Court over alleged violations which has no fiscal impact. The court
system disposes of over 400,000 cases annually and the number of
cases is not anticipated to be great enough to need additional
resources.
State Programmatic Cost
It is unknown how much housing need will fall to the state, but
state costs could be significant. Additionally, it is unclear when the
state would be responsible for providing the vouchers and subsidies.
Tenant-based housing vouchers for families under the state's Rental
Assistance Program cost approximately $11,000 per year per
household. The average subsidy per unit of affordable housing that
DOH provided in FY 20 was $60,672.
3
As an illustration: 130,955 households in Connecticut are both
extremely low income and pay more than 50 percent of their annual
income for housing.
4
If the state was responsible for providing
housing for 5% of the above cited households, it would incur a cost of
3 Table 3 in the Department of Housing's FY 20 Annual Report
4 Comprehensive Housing Affordability Strategy Data for Connecticut, 2013-2017. The bill
allows DOH and OPM to use this data to determine unmet housing need. 2021HB-06611-R000543-FN.DOCX Page 4 of 4
$36 million per year just for mobile housing vouchers.
The Out Years
State administrative costs would continue into the future subject to
changes in wages or fringe benefits for state employees.
State programmatic costs will either start or continue in the future
subject to the amount of unallocated fair share housing units, the
actual costs to subsidize that housing, and the terms of any bonds
issued.