Governor Lamont's Fiscal Year 2024-2025 Proposed Budget
February 10, 2023
A summary of affordable housing-related items from the Governor's proposed budget is below. Please note that this is PSC's preliminary review. We will continue to review the document and discuss with partners. If additional relevant information is identified, we will share an update.
Proposed Capital Budget
The proposed capital budget includes $300 million in each year of the biennium for housing projects and programs. The administration anticipates this funding will provide an estimated 2,200 additional homes in each fiscal year. Housing Trust Fund (HTF) is proposed to be funded with $200 million in each of fiscal years 2024 and 2025 and Flexible Housing funding (Flex Fund) at $100 million in each fiscal year. This funding will also support the redevelopment of affordable homes in the State-Sponsored Housing Portfolio (SSHP) that typically serves low-income, disabled, or elderly renters. This $600 million in new bond authorizations represents roughly a doubling of the prior budget authorizations of $305M for both years. The Governor's budget notes that there are currently $377,156,140 in existing unallocated authorizations for both HTF and Flex Fund.
The Governor's proposal includes $100 million in each year of the biennium to create "workforce" housing for households earning between 60 percent and 120 percent of the area median income (AMI) for renters. The administration expects to provide an additional 2,000 homes over the biennium with this additional funding. This $100 million is included in the additional $300 million per-year bonding allocation discussed above. It is not in addition to that funding.
- $50 million each year of the biennium will support approximately 2,500 homebuyers with the purchase of their first home through the Time-To-Own (TTO) program. The program provides first-time homebuyers with forgivable down payment assistance between $18,750 and $50,000. This $50 million is included in the additional $300 million per-year bonding allocation discussed above. It is not in addition to that funding.
Proposed Appropriations Budget
Department of Housing (DOH)
Baseline Budget Adjustments of Note
Housing Homeless Services (HHS) line is flat funded both years (FY 2024 and 2025) at $86,202,789. HHS to municipalities is flat funded FY 2024 - 2025 at $675,409. This line includes funding for Rental Assistance Program.
Initiatives Funded from Federal Coronavirus State Fiscal Recovery Funds
- A Flexible Funding Subsidy Pool for Housing and Homeless Support is allocated to subsidize housing and provide flexible assistance to help individuals, families, and youth to overcome financial barriers and expedite solutions to homelessness. ($2M in FY24, $0 in FY25)
Office of Policy and Management (OPM)
Department of Economic and Community Development (DECD)
$600,000 and three positions in each fiscal year in DECD for the Municipal Regional Development Authority to provide more capacity to support the Governor's legislative proposal to incentivize housing development.
Governor's Legislative Proposals
The Governor has two legislative proposals affecting housing:
S.B. 985 - An Act Incentivizing Housing Production will include significant new bond funding for the Municipal Redevelopment Authority (MRDA), the quasi-public agency authorized to stimulate economic and transit-oriented development across the state. The Governor's budget will fund MRDA staff to coordinate the effort.
Municipalities that develop housing growth zones that establish clear rules of the road and provide certainty to developers will be eligible for funding. Housing growth zones must be centered on a downtown development district that includes a train station or rapid bus station.
H.B. 6666 An Act Expanding Renters' Rights will:
Allow a landlord to collect at most one month's rent security deposit from tenants;
- raise the fine a municipality can charge a landlord for housing code violations from $250 to $1,000; and
- end the ability of small landlords to discriminate based on sexual orientation.
PSC Comments on Governor Lamont's Proposed FY24-25 Budget
The Governor's proposed FY 2024 - 2025 budget authorizes significant new resources to create and preserve affordable homes.
"We are excited to see the Governor's proposed doubling of state investment in the Housing Trust and Flex Funds. This level of investment would represent a significant step forward in addressing our affordable housing shortage. These two state bonding programs are critical to preserving and increasing our stock of affordable housing that the market cannot produce without government support," said Kiley Gosselin, Executive Director of the Partnership for Strong Communities.
"We know that the deepest need for housing is among the more than 200,000 renter households making less than 50% of median income - or about $63,700 for a family of four. If targeted to this population, these investments could potentially support more than 2,000 additional affordable homes when they are desperately needed," Gosselin said.
"We are disappointed the Governor's proposed budget does not include increased funding for the Rental Assistance Program (RAP) - the state's housing voucher program. RAP is a critical resource that has not seen any adjustment in nearly a decade. As rents have rapidly risen, the program serves fewer and fewer households each year. Thousands of families who are eligible for a RAP voucher do not have one, and they are struggling to pay increasing rents or are living in overcrowded conditions. RAP alleviates housing insecurity and prevents the experience of homelessness. The state needs to prioritize this funding," said Chelsea Ross, Deputy Director of the Partnership for Strong Communities.