OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-6633
AN ACT CONCERNING A NEEDS ASSESSMENT AND FAIR
SHARE PLANS FOR MUNICIPALITIES TO INCREASE
AFFORDABLE HOUSING.
Primary Analyst: LG 3/22/23
Contributing Analyst(s): MP
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 24 $ FY 25 $ Out Years $
Policy & Mgmt.,
Off.
GF - Cost 228,800 27,700 27,700
Department of
Housing
GF - Cost None None 175,000
State
Comptroller -
Fringe Benefits
1
GF - Cost 11,530 11,820 86,760
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 24 $ FY 25 $ Out Years $
Various
Municipalities
STATE
MANDATE
2
- Cost
None Potential Potential
Significant
Explanation
The bill results in a cost of approximately $228,800 in FY 24 and
$27,700 in FY 25 to the Office of Policy and Management (OPM), along
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 42.82% of payroll in FY 24.
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. 2023HB-06633-R000182-FN.DOCX Page 2 of 3
with associated fringe benefits costs to the Office of the State
Comptroller, and a potentially significant cost to various municipalities
beginning in FY 25. The bill creates new processes and requirements
regarding affordable housing.
The bill requires OPM, in consultation with commissioners of the
Department of Housing (DOH) and Department of Economic and
Community Development (DECD), to do the following by July 1, 2024:
(1) assess the affordable housing need in each of the state's planning
regions, (2) develop a methodology for allocating each municipality's
fair share of affordable housing units, and (3) provide technical
assistance materials and trainings to assist municipalities in complying
with the requirements of the bill, including providing assistance to
municipalities to develop a fair share affordable housing plan.
The cost to OPM includes $26,900 in FY 24 and $27,600 in FY 25 for
one part-time Planning Analyst to oversee the consultant process and
monitor ongoing compliance from municipalities, $1,870 in FY 24 and
$110 in FY 25 for training and materials, and a one-time cost of $200,000
in FY 24 for a Planning/Research Consultant to develop the
methodology, make estimates for the ten-year planning horizon, and
develop guidelines and training for municipalities.
There is no fiscal impact to DOH or DECD in FY 24 and FY 25 to
consult with the OPM secretary according to the bill’s provisions.
Municipalities with a federal poverty rate of 20% or greater are
exempt and will not incur a cost. The cost to non-exempt municipalities
beginning in FY 26 will be dependent on the methodology developed
by OPM. The cost will vary but could be potentially significant if
developers still choose not to build after a municipality implements
revised zoning regulations, as the cost to build could then fall onto the
municipalities. The extent of the cost would vary across such towns,
based on the number of units that would need to be available to comply
with the goals in the town's plan. As a reference, the average state
subsidy per new unit of affordable housing developed with DOH
assistance was approximately $100,000 per unit in 2019. 2023HB-06633-R000182-FN.DOCX Page 3 of 3
Municipalities may also incur a cost in FY 25, and every ten years
thereafter, to hire consultants or additional staff necessary to develop
their required plan.
The bill also allows any interested party to bring municipalities to
court if they (1) fail to submit a fair share plan to OPM, or (2) fail to
create a realistic opportunity to meet their municipal fair share
allocation. This may result in a cost to municipalities beginning in FY 25
for punitive damages, attorneys' fees, and court costs to the extent the
municipality cannot provide the burden of proof.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.
DOH will incur costs for approximately two additional staff in the
out years, beginning in FY 27, associated with: 1) reviewing plans, once
submitted, to determine if they create a realistic opportunity for
achieving the municipality's fair share goal, 2) reviewing annual
progress reports that municipalities must provide to DOH starting July
1, 2026, and 3) conducting random audits of at least 10% of plans each
year to ensure compliance with the law starting July 1, 2028. Costs for
one planning analyst and one state program manager would total
approximately $249,935 annually ($175,000 for salaries and $74,935 for
fringe benefits), subject to changes in costs for state employee wages and
benefits.