Researcher: SM Page 1 3/26/25
OLR Bill Analysis
SB 12
AN ACT CONCERNING CONNECTICUT'S HOUSING NEEDS.
TABLE OF CONTENTS:
SUMMARY
§ 1 — STARTER HOMES WORKING GROUP
Establishes a working group, chaired by the Housing Committee chairpersons, to study
barriers to building more starter homes in the state and report to the Housing Committee by
January 1, 2026
§ 2 — SCHOOL CONSTRUCTION GRANT REIMBURS EMENT RATE
Beginning July 1, 2025, makes boards of education eligible for increases to their school
construction grant reimbursement rate based on municipalities’ affordable housing levels
under 8-30g
§§ 3 & 4 — AFFORDABLE HOUSING PILOT PROGRAM FOR
CONSTRUCTION INDUSTR Y EMPLOYMENT
Requires DOH to (1) create a four-year pilot program that funds proposed affordable housing
development projects creating employment opportunities in the construction industry and
meeting certain affordability criteria, (2) set criteria for awarding funds under the program,
and (3) report on the program to the Housing Committee after it concludes; authorizes $50
million in GO bonds for the program
§ 5 — TENANT UTILITY CHARGES
Prohibits residential rental agreements from requiring that tenants pay for utilities if their
dwelling unit does not have a separate meter for the utilities
§ 6 — MUNICIPALITIES THAT MUST HAVE A FAIR RENT
COMMISSION
Requires every municipality, by January 1, 2028, to establish a fair rent commission, joint fair
rent commission, or regional fair rent commission through their COG
§ 7 — AS-OF-RIGHT COMMERCIAL TO RESIDENT IAL
CONVERSIONS
Requires municipalities that zone under CGS § 8-2 to adopt regulations allowing the as-of-
right conversion of commercial buildings into residential developments and sets related
requirements; prohibits municipalities from conducting a revaluation of a conversion for a
three-year period beginning after a certificate of occupancy is issued
§ 8 — CHFA STUDENT LOAN DEBT PILOT PROGRAM
Requires CHFA to develop and administer a pilot program for eligible borrowers with unpaid
student loan debt that provides an interest rate reduction, similar to its existing Smart Rate
Pilot Interest Rate Reduction Program
§§ 9 & 10 — DOH RENTAL ASSISTANCE APPROPRIATIONS 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 2 3/26/25
Appropriates to DOH from the General Fund for FY 26 (1) $4.2 million for at least 425
additional rental assistance certificates for ERAP and (2) $4.5 million for at least 275
additional RAP certificates for families participating in the Head Start program
SUMMARY
This bill (1) makes various changes in housing-related laws, such as
prohibiting leases from requiring tenants to pay for utilities that are not
separately metered and generally requiring all municipalities to have
fair rent commissions; (2) creates new housing development and
mortgage pilot programs and a starter homes working group; (3) makes
appropriations to the Department of Housing (DOH) for rental
assistance; (4) makes boards of education eligible for increases to their
state grant reimbursement rate for school building projects based on
municipalities’ affordable housing levels; and (5) requires most
municipalities to allow the as-of-right conversion of commercial
buildings into residential developments. A section-by-section analysis
follows.
EFFECTIVE DATE: July 1, 2025, except the starter homes working
group provisions are effective upon passage.
§ 1 — STARTER HOMES WORKING GROUP
Establishes a working group, chaired by the Housing Committee chairpersons, to study
barriers to building more starter homes in the state and report to the Housing Committee
by January 1, 2026
The bill establishes a working group to study existing state and
municipal barriers to building additional starter homes in the state (i.e.
affordable single-family residential dwellings), including zoning
restrictions, subdivision requirements, building and fire safety codes,
and common interest community regulations.
Under the bill, the working group consists of the Housing Committee
chairpersons (who also serve as the working group chairpersons) and
anyone who they believe may provide relevant information and data,
including (1) the DOH commissioner or her designee and (2)
professionals with expertise in housing and planning.
The chairpersons must schedule the working group’s first meeting, 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 3 3/26/25
which they must hold within 60 days after the bill’s passage. The
Housing Committee’s administrative staff serve as the staff of the
working group.
The bill additionally requires the working group, by January 1, 2026,
to submit its findings and recommendations to the Housing Committee.
The group ends on the date it does so, or January 1, 2026, whichever is
later.
§ 2 — SCHOOL CONSTRU CTION GRANT REIMBURS EMENT RATE
Beginning July 1, 2025, makes boards of education eligible for increases to their school
construction grant reimbursement rate based on municipalities’ affordable housing levels
under 8-30g
Beginning July 1, 2025, the bill makes local or regional boards of
education in certain municipalities eligible for a five-year increase to
their state school construction grant reimbursement rate. To receive the
rate increase, before December 1 of the year in which the board submits
a reimbursement application, it must also submit a written DOH
determination for that year finding that the municipality where the
school building project will occur meets specified affordable housing
thresholds under the affordable housing land use appeals procedure
(CGS § 8-30g; see Background).
Under the bill, the 8-30g affordable housing thresholds and
accompanying reimbursement rate increases are as follows:
1. for municipalities with at least 10% affordable housing, the board
receives a 20% increase;
2. for municipalities with at least 8% but less than 10% affordable
housing, the board receives an 8% increase; and
3. for municipalities with at least 6% but less than 8% affordable
housing, the board receives a 5% increase.
According to DOH’s 2024 Affordable Housing Appeals List, 28
municipalities have an affordable housing stock of at least 10%, 15
municipalities have between 8% and 10%, and 18 have between 6% and
8%. 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 4 3/26/25
Background
Affordable Housing Appeals List and 8-30g. DOH annually
publishes a list identifying the housing stock in each municipality that
qualifies as affordable housing under 8-30g for the purpose of
establishing which municipalities are exempt from the appeals
procedure (i.e. those that meet the 10% threshold). DOH uses data from
the most recent U.S. decennial census to determine the total number of
housing units in each municipality. Data on the number of affordable
units comes from various sources (see CGS §§ 8 -30g(k) & 8-
37qqq(a)(2)(D); Conn. Agencies Regs., § 8-30g-2).
Related Bills. HB 6950 and sHB 7031, both reported favorably by the
Housing Committee, (1) change the definition of “set-aside
development” used in 8-30g and (2) count any accessory apartments
toward the 8-30g exemption threshold, respectively.
§§ 3 & 4 — AFFORDABLE HOUSING PILOT PROG RAM FOR
CONSTRUCTION INDUSTR Y EMPLOYMENT
Requires DOH to (1) create a four-year pilot program that funds proposed affordable
housing development projects creating employment opportunities in the construction
industry and meeting certain affordability criteria, (2) set criteria for awarding funds
under the program, and (3) report on the program to the Housing Committee after it
concludes; authorizes $50 million in GO bonds for the program
The bill requires DOH, within available bond authorizations, to
develop and establish a four-year pilot program that funds proposed
affordable housing development projects creating employment
opportunities in the construction industry. It also (1) requires DOH to
set criteria for awards, (2) sets housing affordability requirements, (3)
requires DOH to report on the program to the Housing Committee, and
(4) authorizes up to $50 million in state general obligation (GO) bonds
for the program.
Under the bill, beginning July 1, 2025, sponsors of eligible proposed
projects can apply, as prescribed by DOH, to receive pilot program
funding.
Criteria for Awarding Funds 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 5 3/26/25
The bill requires DOH to set criteria for awarding funds, which at a
minimum must require the following:
1. the applicant to secure co-investment funding from a union
pension fund (or comingled fund of union pension fund
investments) with a demonstrated record of successful
investment in affordable housing construction,
2. the proposed project to be covered by a project labor agreement,
and
3. the applicant to be committed to workforce training by following
state-registered apprenticeship standards and apprenticeship
readiness programs.
Affordability Requirements
The bill requires all housing built with pilot program funding to have
affordability restrictions (i.e. deed restrictions) that apply for at least 40
years and limit occupancy to households earning up to 80% of the
median income, or other means DOH selects. These affordability
restrictions must require the housing to be sold or rented at a price that
is not more than 30% of an eligible household’s income. (Presumably,
DOH must determine whether “median income” means state or area
median income.)
Program Reporting
The bill requires DOH to report to the Housing Committee within six
months after the pilot program ends. This report must include an
analysis of the program’s effectiveness and any recommendations for
permanently implementing or expanding it.
Bond Authorization
The bill authorizes up to $50 million in state GO bonds and requires
DOH to use the proceeds to finance approved projects under the pilot
program, as described above. The bonds are subject to standard
statutory bond issuance procedures and repayment requirements.
§ 5 — TENANT UTILITY CHARGES 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 6 3/26/25
Prohibits residential rental agreements from requiring that tenants pay for utilities if their
dwelling unit does not have a separate meter for the utilities
The bill prohibits residential rental agreements from requiring that
tenants pay for “utilities” if their dwelling unit does not have a separate
meter for the utilities. (It does not define “utilities.”) By law, statutorily
prohibited rental agreement provisions are unenforceable.
Existing law makes the owner, agent, lessor, or manager of a
residential dwelling (i.e. the “landlord”) liable for the costs of a utility
service (specifically, electric, gas, water, or heating fuel) provided to the
building, unless the utility company provides the service (1) to a
dwelling unit of the building on an individually metered or billed basis
and (2) for the exclusive use of the unit’s occupants (CGS § 16-262e(c)).
Background — Related Bill
sHB 6943 (§ 2), reported favorably by the Housing Committee,
prohibits rental agreements from requiring that tenants pay a surcharge
or rent increase for occupying a dwelling unit under a month-to-month
lease or holding over beyond the lease term.
§ 6 — MUNICIPALITIES THAT MUST HAVE A FA IR RENT
COMMISSION
Requires every municipality, by January 1, 2028, to establish a fair rent commission, joint
fair rent commission, or regional fair rent commission through their COG
The bill requires the legislative body of every municipality (i.e. town,
city, and borough), by January 1, 2028, to adopt an ordinance creating a
fair rent commission, joint fair rent commission, or regional fair rent
commission (see Background). Current law (1) required all municipalities
with a population of at least 25,000 to have a commission by July 1, 2023,
and (2) allows others to have them.
Under the bill, any two or more municipalities may form a joint fair
rent commission through their legislative bodies; current law limits this
option only to municipalities under the population threshold discussed
above. The bill also allows any municipalities that are members of a
regional council of governments (COG), through their legislative bodies
and their COG, to create a regional fair rent commission. 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 7 3/26/25
Existing law, unchanged by the bill, requires a municipality’s chief
executive officer to notify DOH that the municipality has established a
fair rent commission and send the department a copy of its ordinance,
within 30 days after it is adopted. (Presumably, this requirement applies
to the joint or regional fair rent commissions the bill authorizes.)
Background
Fair Rent Commissions. By law, fair rent commissions are generally
empowered to (1) control and eliminate excessive (i.e. harsh and
unconscionable) rental charges and (2) enforce landlord-tenant statutes
prohibiting landlord retaliation and establishing eviction protections for
certain protected tenants. Among other things, commissions may
receive rent complaints and hold hearings on them (CGS § 7-148b et
seq.). According to DOH, 38 municipalities currently have a fair rent
commission.
Related Bills. sSB 1264, reported favorably by the Housing
Committee, requires (1) a fair rent commission to notify parties to any
of its proceedings of their rights and the scope of the commission’s
lawful authority and (2) DOH to create a model notice.
sSB 1266 (File 72), reported favorably by the Housing Committee, (1)
requires municipalities with a fair rent commission to post on their
website a copy of the commission’s adopted bylaws and (2) specifies
that fair rent commission hearings must be open to the public.
HB 6892, reported favorably by the Housing Committee, modifies the
factors that fair rent commissions must consider when determining
whether a rental charge or proposed rent increase is excessive (to
include consideration of the percentage in rent increase for an
accommodation that changed ownership within the last year).
sHB 6943 (§ 3), reported favorably by the Housing Committee,
requires a landlord’s rent increase notice to include a statement that the
tenant has the right to file a complaint with the fair rent commission to
dispute the increase if the dwelling unit is in a municipality with a
commission. 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 8 3/26/25
§ 7 — AS-OF-RIGHT COMMERCIAL TO RESIDENT IAL
CONVERSIONS
Requires municipalities that zone under CGS § 8-2 to adopt regulations allowing the as-
of-right conversion of commercial buildings into residential developments and sets related
requirements; prohibits municipalities from conducting a revaluation of a conversion for a
three-year period beginning after a certificate of occupancy is issued
The bill requires municipalities that exercise powers under the
Zoning Enabling Act (CGS § 8-2) to adopt regulations allowing the
conversion (or partial conversion) of commercial buildings into
residential developments as of right. As under existing law, “as of right”
means able to be approved without requiring (1) a public hearing; (2) a
variance, special permit, or special exception; or (3) other discretionary
zoning action, other than a determination that a site plan conforms with
applicable zoning regulations. The bill also generally sets related
requirements for (1) the as-of-right permit application and review
process and (2) municipal property revaluations of conversions.
Under the bill, commercial buildings are those primarily designed or
used for non-residential purposes, including hotels, retail space, and
office space. They do not include industrial buildings, meaning those
used primarily for industrial activity and generally not open to the
public, including warehouses, factories, and storage facilities.
Residential developments are structures (or a portion of one) containing
at least one dwelling unit.
Application Review
The bill requires regulations to establish an as-of-right permit
application and review process for these conversion projects. The
process must require the zoning or planning and zoning commissions
to decide within 65 days after an application is received unless an
applicant approves an extension or extensions of up to 65 days total or
withdraws the application.
The bill prohibits municipalities from conditioning a conversion’s (or
partial conversion’s) approval on the correction of a nonconforming use,
structure, or lot. (A nonconforming use is a property use that legally
exists at the time a zoning restriction prohibiting or limiting it is
adopted. The term also generally applies to lots and structures that do 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 9 3/26/25
not comply with zoning regulations.) The bill also specifies that its
provisions do not exempt these conversions from the requirements of
applicable building and fire codes, however, it prohibits municipalities
from unreasonably delaying inspections required in connection with
conversions.
Municipal Property Revaluations
The bill prohibits municipalities from conducting a revaluation of a
conversion or partial conversion for at least a three-year period
beginning after a certificate of occupancy is issued in connection with
the conversion. This prohibition applies regardless of existing law on
municipal property revaluations, which requires municipalities to
perform revaluations every five years based on a rotating schedule the
Office of Policy and Management prescribes.
Related Bills
sSB 1263, reported favorably by the Housing Committee, requires
DOH to establish a tax credit program for owners that convert
commercial buildings into residential developments or taxpayers that
make contributions toward the conversion.
SB 1444, reported favorably by the Planning and Development
Committee, generally has the same provisions as this bill.
§ 8 — CHFA STUDENT LOAN DEBT PILOT PROGR AM
Requires CHFA to develop and administer a pilot program for eligible borrowers with
unpaid student loan debt that provides an interest rate reduction, similar to its existing
Smart Rate Pilot Interest Rate Reduction Program
The bill requires the Connecticut Housing Finance Authority (CHFA)
to develop and administer a pilot program for certain mortgage
borrowers with unpaid student loan debt (similar to its existing Smart
Rate Pilot Interest Rate Reduction Program; see below). It must do so as
part of its existing homeownership loan program and within resources
allocated to DOH by the State Bond Commission for this program.
Under the pilot program, CHFA is authorized to provide up to a
1.125% interest rate reduction to eligible mortgage holders. The bill
requires CHFA to establish program guidelines it determines are 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 10 3/26/25
needed, including the eligibility requirements described below. To be
eligible for the pilot program, a borrower must meet the following
requirements:
1. be a first-time homebuyer or have not owned a home in the past
three years, unless purchasing in federal “targeted areas” (i.e.
areas recognized by the federal government as likely to benefit
from an increase in homeownership based on certain metrics);
2. meet CHFA’s household size-adjusted income limits and have a
gross income that does not exceed the area median income;
3. have a combined student loan debt with at least a $15,000 unpaid
principal balance (the student loan must be in good standing and
may be in repayment or deferment); and
4. meet any other eligibility requirements CHFA determines are
needed.
(While the bill’s pilot program is similar to CHFA’s existing,
administratively established Smart Rate Pilot Interest Rate Reduction
Program, the latter is currently closed due to the allotted funds being
fully reserved.)
§§ 9 & 10 — DOH RENTAL ASSISTANCE APPROP RIATIONS
Appropriates to DOH from the General Fund for FY 26 (1) $4.2 million for at least 425
additional rental assistance certificates for ERAP and (2) $4.5 million for at least 275
additional RAP certificates for families participating in the Head Start program
The bill makes the following appropriations to DOH from the
General Fund for FY 26:
1. $4.2 million for at least 425 additional rental assistance certificates
issued to people with disabilities or who are elderly under the
department’s Elderly Rental Assistance Program (ERAP); and
2. $4.5 million for a grant to the Head Start on Housing program for
at least 275 additional Rental Assistance Program (RAP)
certificates issued to families participating in Head Start. 2025SB-00012-R000251-BA.DOCX
Researcher: SM Page 11 3/26/25
ERAP provides rental assistance to low-income elderly people living
in state-assisted elderly rental housing. The Head Start on Housing
program provides housing vouchers to Early Head Start or Head Start
families to prevent homelessness and support family success. Early
Head Start and Head Start generally provide a range of early learning
and development services and supports for income-eligible young
children and their families.
Background — Related Bills
sHB 6890, reported favorably by the Housing Committee, makes
several changes to DOH’s administration of RAP.
sHB 6941, reported favorably by the Housing Committee, requires
DOH’s regulations on RAP income eligibility to exempt from the
program’s gross income calculation up to $100,000 annually earned by
a child (until he or she reaches age 24) residing with an applicant.
sHB 7112 (§§ 15 & 18), reported favorably by the Housing Committee,
requires DOH to establish a pilot program to give direct cash rental
assistance to recipients who are eligible for a RAP certificate and are
currently on the waiting list for the federal Housing Choice Voucher
program (instead of a housing choice voucher). It appropriates $2.23
million to DOH from the General Fund for FY 26 in support of the
program.
COMMITTEE ACTION
Housing Committee
Joint Favorable
Yea 12 Nay 6 (03/06/2025)