HB 6944 — AN ACT REQUIRING A MUNICIPALITY TO INCLUDE CERTAIN INFORMATION IN ITS AFFORDABLE HOUSING PLAN.

(k) Any municipality not required to create a priority affordable housingplan,orwithanapprovedpriorityaffordablehousingplanand, within twelve months, that has implemented approved changes to zoning and related policies, shall be eligible for prioritized discretionary LCOfunding. No.

4591 6 of 8 Raised Bill No.

6944 funding.

Nothing in this subsection shall be construed to limit the use of funding receivedsHB6944 pursuant/ toFile thisNo. section if the use of such funding to improve, expand, manage or maintain real property for the purposes of developing affordable housing also benefits real property not used for the purposes of developing affordable housing.

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266 received pursuant to this section if the use of such funding to improve, expand, manage or maintain real property for the purposes of developing affordable housing also benefits real property not used for the purposes of developing affordable housing.

2 July 1, 2025 46a-104 LCOStatement No.of Legislative Commissioners:

4591In 7Section of1(a)(5)(B)(i), 8duplicative Raisedtext Billwas No.deleted, in Section 1(a)(7) "municipalfair share allocation"wasaddedfor accuracy, inSection1(d), the first sentence was rewritten for accuracy and consistency with standarddrafting conventionsandinSection1(h),termswere reworded to be consistent with the term defined in Section 1(a)(7).

6944HSG StatementJoint ofFavorable Purpose:Subst.

TosHB6944 require/ aFile municipalityNo. to include certain information in its affordable housing plan.

[Proposed266 deletions7 aresHB6944 enclosedFile inNo. brackets.

Proposed266 additionsThe following Fiscal Impact Statement and Bill Analysis are indicatedprepared byfor underline,the exceptbenefit thatof whenthe members of the entireGeneral textAssembly, solely for purposes of ainformation, billsummarization orand resolutionexplanation orand ado sectionnot ofrepresent athe billintent orof resolutionthe isGeneral new,Assembly itor iseither notchamber underlined.]thereof LCOfor No.any purpose.

4591In 8general, fiscal impacts are based upon a variety of 8informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 26 $ FY 27 $ Policy & Mgmt., Off.

GF - Potential See Below See Below Cost Policy & Mgmt., Off.

GF - Cost 310,900 206,700 Department of Housing GF - Potential See Below See Below Cost Department of Housing GF - Potential 86,068 - 86,068 - Cost 98,695 98,695 Connecticut Housing Finance CHFA - Potential 125,000 - 125,000 - Authority (CHFA) Cost 140,000 140,000 Connecticut Housing Finance CHFA - Potential See Below See Below Authority (CHFA) Cost State Comptroller - Fringe GF - Cost 84,900 84,900 Benefits State Comptroller - Fringe GF - Potential 35,038 - 35,038 - Benefits2 Cost 40,179 40,179 Note:

GF=General Fund;

CHFA=Resources of CHFA Municipal Impact:

Municipalities Effect FY 26 $ FY 27 $ Various Municipalities Potential See Below See Below Cost Explanation The bill makes various changes to municipal affordable housing 1The 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 40.71% of payroll in FY 26.

2The 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 40.71% of payroll in FY 26.

sHB6944 / File No.

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266 plans and places various requirements on the Office of Policy and Management (OPM), Department of Housing (DOH), and the Connecticut Housing and Finance Authority (CHFA) which results in the impacts described below.

Municipal Impact The bill (1) changes requirements for municipal affordable housing plans, (2) requires municipalities to update local regulations and policies to meet certain requirements, (3) submit an application to OPM for approval on updated plans and policies, and (4) prioritizes municipalities for certain discretionary funding if they comply with the bills requirements or are exempt from making these plans.

This may result in a cost to municipalities beginning in FY 26 to the extent that they require additional resources to update the municipal affordable housing plans, update policies, and submit an application to OPM.

There is also a potential revenue shift associated with prioritizing discretionary funding.

This may result in some towns receiving larger grants and some receiving smaller grants.

Any shift is dependent on how the funding is prioritized.

Office of Policy and Management The bill (1) makes the OPM responsible for reviewing municipal affordable housing plans, (2) allows nonprofits and housing developers to bring actionagainstOPM todefendapprovaloftheplans,(3)requires OPM to update affordable housing estimates and fair share allocations every ten years, and (4) requires OPM to make grants available to municipalities and regional councils of government or designate DOH or CHFA to administer the program.

The discretionary funding includes (1) Small Town Economic Assistance Program, (2) Main Street Investment Fund, (3) Incentive Housing Zone Program, and (4) Town Aid Road, to the extent such programs are (A) permitted to include a priority designation and (B) recommended to include prioritization by the OPM Secretary.

sHB6944 / File No.

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266 This results in an annual cost of $266,700 to OPM beginning in FY 26 associated with two additional positions to review the affordable housing plans, updated policies, and application and a one-time cost of $4,200 for equipment in FY 26.

There is also an annual cost of $84,900 beginning in FY 26 to the Office of the State Comptroller for associated fringe benefits.

The bill results in a potential cost to OPM beginning in FY 26 to the extent legal action is brought against them to defend the approval of the municipal affordable housing plans.

The bill also results in a potential cost to OPM beginning in FY 26 to the extent they make grants available to municipalities and regional councils of government.

If OPM chooses to designate DOH or CHFA to administer this grant program it will not result in a fiscal impact to OPM.

Department of Housing and Connecticut Housing and Finance Authority The bill will require DOH or CHFA to administer a technical assistance grant program for municipalities if either agency is designated to do so by OPM.

If the program is administered by DOH, they will require one full- time employee which result in a cost of $86,068 - $98,695 to DOH for salary and $35,038 - $40,179 to the State Comptroller for fringe benefits.

DOH will also incur additional costs for grants to municipalities.

If the program is administered by CHFA, they may hire one full-time employee which results in an approximate cost of $125,000 - $140,000 annually for salary and fringe benefits to CHFA's own resources.

5 DOH may hire a Housing Specialist 2 for $86,068 annually or Housing and Community Development Manager for $98,695 annually or a similar position.

5CHFA is a quasi-public authority that issues its ownfederally tax-exempt and taxable mortgage revenue bonds.

The authority pays its operating expenses using funds derived from the excess of interest income from loans over bond interest expenses.

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266 CHFA will also incur additional costs for grants to municipalities.

It is unlikely that both CHFA and DOH will administer the program.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the position selected by DOH and grants issued.

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266 OLR Bill Analysis sHB 6944 AN ACT REQUIRING A MUNICIPALITY TO INCLUDE CERTAIN INFORMATION IN ITS AFFORDABLE HOUSING PLAN.

SUMMARY This bill changes the requirements for most municipal affordable housing plans adopted under CGS § 8-30j, generally requiring these plans to “create a realistic opportunity” for developers to build the amount of affordable housing that was allocated to the municipality under the “municipal affordable housing allocation” (i.e.

the fair share allocation established under existing law, see BACKGROUND).

Municipalities must also change local regulations and policies to create a “reasonable opportunity” for the development of such allocation.

The bill makes the Office of Policy and Management (OPM) secretary responsible for reviewing and approving these priority affordable housing plans and policy changes.

Certain nonprofits and housing developers may bring an action in Superior Court requiring the secretary to defend his approval.

If a municipality complies with the bill’s requirements, or is exempt from them (i.e.

has a relatively low per-capita grand list), it may be prioritized for certain discretionary state funding.

Municipalities that do not have to adopt priority plans must still adopt affordable housing plans every five years, as existing law requires.

But the bill eliminates the requirements in current law that the plans show how municipalities will increase their affordable housing stock (as defined for purposes of bringing suit under the affordable housing land use appeals procedure) and improve the accessibility of these units for people with disabilities, as well as other requirements.

It does not replace these provisions with any specific requirements for the non-priority plans.

But, as noted above, it does establish new content sHB6944 / File No.

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266 requirements for priority plans.

The bill requires the OPM secretary to post all affordable housing plans on OPM’s website.

The bill requires the OPM secretary, by December 15, 2035, and then every 10 years, to update affordable housing “estimates” and fair share allocations (these must be completed only once under existing law).

(Presumably, “estimates” refers to need for affordable housing units.) The bill also requires the OPM secretary, or if designated by the secretary, the housing commissioner or Connecticut Housing Finance Authority’s chief executive officer, to make grants available (within available funding) to municipalities and regional councils of governments to support compliance with the bill’s provisions through municipal planning and zoning technical assistance.

EFFECTIVE DATE:

July 1, 2025 PRIORITY FOR CERTAIN DISCRETIONARY FUNDING Municipalities are eligible for prioritized discretionary funding from certain state programs if they (1) comply with the bill’s requirements for adopting priority plans and implementing changes to zoning and related policies or (2) are exempt from making priority plans.

Specifically, the bill requires the OPM secretary to make recommendations to the state agency responsible for the specified funding and permits the agency to prioritize an eligible municipality if the grant program allows for such priority designation.

The funding the bill’s provisions prioritize for eligible municipalities is:

1.

Small Town Economic Assistance Program grants, 2.

Main Street Investment Fund grants, 3.

Incentive Housing Zone Program grants, and 4.

Town Aid Road Program grants awarded pursuant to a waiver (i.e.

for projects not specified in statute).

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266 The bill specifies that if a municipality receives funding specifically related to affordable housing development, the bill does not prohibit it from using the funding in a way that also benefits real property not being used for affordable housing development.

PRIORITY AFFORDABLE HOUSING PLANS AND LOCAL POLICY CHANGES Municipalities required to complete priority plans must ensure the planscreatea“realisticopportunity”forthedevelopmentofthenumber of affordable housing units allocated to the municipality under the fair share allocation.

Under the bill, the OPM secretary is responsible for reviewing and approving plans and related adopted changes to local zoning and other policies.

Covered Municipalities Current law requires each municipality to prepare and adopt a municipal affordable housing plan by June 1, 2022, and then at least every five years after that.

Under the bill, municipalities will still be required to adopt these plans every five years, but most municipalities will be required to create a more comprehensive priority affordable housing plan (“priority plan”).

Specifically, the priority plan requirement applies to any municipality in the highest 80% of net equalized per capita grand list income, as of June 1 of the year prior to the year the plan is due.

(Presumably, the OPM secretary will make this determination and inform municipalities.) Planning for Fair Share Allocation The plan must specify how the municipality will use its powers, including zoning powers, to create a “realistic opportunity” for the development of the number of affordable housing units allocated to the municipality under the fair share allocation.

Under the bill, “realistic opportunity” means the possibility for affordable housing to be constructed for the benefit of low-income households (i.e.

those at or below 80% of the area median income) in a time frame and with administrative burdens (including fees and hearings) comparable to what the municipality imposes on applicants seeking to build single- sHB6944 / File No.

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266 family homes.

In planning for the affordable housing units, the municipality must take into account financial feasibility and applicable municipal rules, policies, and practices.

The bill further specifies that in making its plan, a municipality must plan for affordable housing of different specified types, as shown in the below table.

“Affordable housing units” must be deed-restricted to preserve them as affordable to low-income households (but the bill does not specify for how long).

Table:

Deed-Restricted Affordable Housing Planning Requirements Affordable Unit Requirements Required Share of Affordable Units Preserved as affordable for very low-income households (i.e.

At least 20% at or below 50% of the area median income) Rental units At least 50% Units unrestricted by occupant age At least 75% Units unrestricted by occupant age with two or more At least 50% bedrooms Units with at least two bedrooms At least 80% As part of their plan, municipalities must also examine zoning and other policies to identify changes required locally to allow for the development of required affordable housing as described above.

These proposed changes, like the priority plan, must be submitted to the OPM secretary for approval.

OPM Approval Process for Priority Plans Municipalities must submit their priority plans to OPM for approval using a written application.

In applying for approval, the municipality must submit any evidence required by statute or regulation (presumably, evidence of how the plan complies with applicable requirements).

The OPM secretary must promptly have notice of the pending application published in the Connecticut Law Journal, including notice that he will be accepting public comments for 30 days following the notice’s publication.

Within 90 days of receiving the application, he sHB6944 / File No.

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266 must approve or reject it, accompanied by a written statement with his reasons.

If the application is approved, the secretary must promptly publish notice of the certificate of priority affordable housing plan approval in the Connecticut Law Journal.

If no action is taken within 90 days, the plan is deemed provisionally approved and retains that status unless the secretary acts to reject the application and notifies the municipality.

It is unclear whether provisionally approved plans qualify a municipality for prioritized discretionary funding.

Standards Set in Regulation.

Within available appropriations, the secretary must adopt regulations on the review and approval of these priority plans.

They must include criteria for evaluating whether the plan creates a “reasonable opportunity” for the creation of the required units (it is unclear if this is the same standard as “realistic opportunity,” which applies to municipalities as they create their plans).

In addition to any criteria the secretary deems appropriate, the regulations must require:

1.

identification of specific zones or parcels in the municipality sufficient to build its affordable housing allocation as-of-right;

2.

that the permitted density for the zones or parcels be specified;

3.

a summary of the appropriate and necessary changes to other municipal processes and procedures that will be made to allow for the creation of the municipality’s affordable housing allocation;

and 4.

an explanation, documented by evidence, of (a) how the plan complies with the bill’s requirements or (b) why the municipality is unable to create such a plan.

The bill requires the regulations to also specify the process for reviewing and approving the municipality’s related local zoning and sHB6944 / File No.

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266 other policy changes to ensure they create a “reasonable opportunity” for the development of the affordable housing allocation (see below).

OPM Approval Process for Zoning and Other Policy Changes Within 12 months of having its priority plan approved (or, presumably, having it deemed provisionally approved), a municipality must submit to the secretary its application for approval of amended and adopted zoning and other policy changes.

The secretary has 90 days to approve or reject them in writing, and must include the reasons for the decision.

If approved, the secretary must have published in the Connecticut Law Journal a “certificate of zoning and policy changes approval.” If no action is taken within 90 days, the application is deemed provisionally approved and retains that status unless the secretary acts to reject the application and notifies the municipality.(Itisunclearwhetherprovisionallyapproved applications qualify a municipality for prioritization of discretionary state funding.) REMEDY FOR IMPROPERLY APPROVED PLAN The bill allows any “interested party” (see below) to bring an action in Superior Court to review, and seek a declaratory judgement on, any approved priority plan’s conformity with the bill’s requirements.

The bill specifies that the court must determine whether the plan “substantially complies.” The burden is on the OPM secretary to prove, based ontheevidence intherecorduponwhichtheapprovalwasmade, that the approval and the reasons cited for it are supported by sufficient evidence.

If the interested party prevails, the court may grant legal and equitable relief it deems appropriate, including temporary or permanent injunctive relief, punitive damages, attorney’s fees, and court costs.

Interested Party Defined Under the bill, an “interested party” is a (1) nonprofit organization whose mission is to provide or advocate for increased access to, and supply of, affordable housing or (2) housing developer seeking to sHB6944 / File No.

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266 construct housing that would contribute to a municipality’s affordable housing allocation.

The intended or proposed housing development must qualify as “assisted housing” or a “set-aside development” under the current affordable housing land use appeals procedure statute (CGS § 8-30g), or meet the following minimum requirements relative to the total number of units in the development:

1.

at least 20% must be age unrestricted, deed-restricted affordable units (inclusive of the units described below for very low-income households);

2.

at least 5% must be deed-restricted affordable units for households earning up to 50% of area median income (i.e.

very low-income households);

and 3.

at least 10% of deed-restricted units must have at least two bedrooms (presumably, deed-restricted affordable units).

BACKGROUND Fair Share Allocation A 2023 law required the OPM secretary, in consultation with the housing and economic and community development commissioners, to create a methodology for each municipality’s fair share allocation of affordable housing by generally (1) determining the need for affordable housing units in each of the state’s planning regions and (2) fairly allocating this need to each region’s municipalities.

The OPM secretary must, in consultation with these commissioners, use the methodology to determine the minimum need for affordable housing units for each planning region and a municipal fair share allocation for each region’s municipalities.

The methodology must generally rely on specified federal data and meet certain requirements.

Related Bills sSB 1252, favorably reported by the Housing Committee, makes it easier for a municipality that adopts an overlay zone covering at least 10% of its developable land, in which multifamily housing is allowed sHB6944 / File No.

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266 as-of-right, to qualify for a moratorium under the affordable housing land use appeals procedure (i.e.

CGS § 8-30g).

sHB 6831, favorably reported by the Planning and Development Committee, makes municipalities that plan to adopt zoning regulations allowing certain housing developments to be built as-of-right in a transit-oriented district eligible for prioritization of infrastructure funding for use within the district.

COMMITTEE ACTION Housing Committee Joint Favorable Substitute Yea 12 Nay 6 (03/06/2025) sHB6944 / File No.

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