Connecticut will officially join other states in rolling back decades-old zoning limits to make ground-up homebuilding easier and more plentiful.
Last Wednesday morning, Gov. Ned Lamont signed compromise legislation created during a special session in mid-November, months after he vetoed the original bill as the state addresses an estimated 100,000-unit housing shortage.
According to sister-title HousingWIre:
“After months of negotiations, the Конференция муниципалитетов и Совет малых городов Коннектикута backed the new bill alongside the governor.”
The milestone measure will take effect January 1, 2026.
In a now-familiar nationwide pattern, municipalities had objected to the state overriding their zoning decisions. They particularly opposed a “Fair Share” policy that required cities, towns, and other localities to zone enough affordable housing to meet regional targets.
Lamont agreed and pushed for a compromise that shifted to opting in to some — but not all — provisions. The compromise was passed two weeks ago, but the bill did not arrive on the governor’s desk until Tuesday. He had promised to sign the bill this time, even though he continued to face pressure to nix it again.
“Connecticut’s housing shortage is among the most severe in the country,” Lamont said when the bill passed. “Simply put, the status quo is unsustainable.”
Among many provisions in the 100-page law, one allows approval of “missing middle” housing developments by a summary or as-of-right–like process in areas zoned commercial or mixed-use. Cities can choose to opt into a similar path in residential zones.
The law bars municipalities from applying minimum off-street parking requirements to residential developments with fewer than 16 homes. For developments with more than 16 units, developers must provide a parking needs assessment instead of meeting rigid minimums.
Lamont’s signature marks another victory for the “yes-in-my-backyard” movement, which has had major wins in California this year.
“This bill represents a big step in the right direction for facing [Connecticut’s] housing shortage,” activist group DesegregateCT said in a social media post.
Using carrots instead of sticks
The bill creates a three-track incentive structure for towns, tied to access to new state money and regulatory relief. Towns can either complete a qualifying housing growth plan, contract with the Connecticut Municipal Development Authority, or adopt transit-oriented upzoning near rail and bus rapid transit.
Choosing one of these options unlocks eligibility for new state funding streams and higher reimbursement rates for school construction projects.
The CMDA option targets downtowns and station areas, where the authority can help finance and coordinate dense multifamily development. The transit-oriented development option pushes towns to zone for more units around transit, often with minimum density thresholds.
These pathways sit alongside the planning-track option, where towns or councils of governments create detailed housing growth plans and land inventories.
The bill also rewires how temporary 8-30g moratoriums work, especially around “points” for middle housing.
Under the 8-30g law, developers can bypass local zoning and build affordable housing in towns with under 10% affordable units. Cities can deny a project only if they prove it poses serious health or safety risks that outweigh the need for affordable housing.
With the new scheme, towns only earn durable moratorium credit for middle housing units if they opt into broader zoning reforms. Those reforms must allow middle housing types to go through a streamlined, summary-style review process in residential zones, not just in commercial or mixed-use districts.
This link between moratorium points and zoning reforms aims to change town incentives. Towns that want relief from 8-30g litigation must not only permit some affordable units but also normalize middle housing procedurally in their residential districts.
Banning algorithmic apartment rent pricing
For rentals, the law prohibits the use of “revenue management” or algorithmic rent-setting software to determine rents or occupancy in residential buildings, with significant civil penalties for violations.
This year, California and New York became the first two states to ban the pricing practice. Several cities have advanced similar measures or investigations.
Controversy erupted three years ago over the pricing practice when a federal class action lawsuit alleged data analytics company RealPage and a long list of major apartment management companies fixed rental prices. The lawsuit followed a ProPublica статья that detailed the practice.
Tenants and critics alleged that the algorithms replaced competition with collusion, resulting in inflated rents and reduced tenants’ ability to negotiate or find affordable options.
The Justice Department and eight states filed an antitrust lawsuit against RealPage last year. RealPage поселился with the DOJ this week and agreed to stop training its algorithms using current leases and to exclude nonpublic data that competing apartment companies provide when making rent rate suggestions.
RealPage doesn’t admit any wrongdoing in the settlement. The company has long stated that its software has been misunderstood outside of the apartment industry.
“We are convinced that RealPage is part of the solution to addressing the cost of housing, helping operators make informed, independent decisions in a complex housing market,” Dirk Wakeham, RealPage’s CEO, said in a statement.
RealPage settled with Nevada in September. A week ago, Connecticut joined eight other states in settling with Greystar Management Services, the nation’s largest apartment manager.
“When the largest landlord in the entire United States rigs the market with unfair and anticompetitive algorithms, it jacks up costs for everyone, everywhere,” Connecticut Attorney General William Tong said in a statement. “Today’s settlement begins to restore fairness to this broken system.”
Connecticut zoning reform is just the beginning
Florida, California, Colorado and Texas offer examples of what may be in store for Connecticut as it implements the new law. In each state, municipalities have pushed back on state-level involvement in local zoning and have often dodged the laws by working through loopholes.
This year, Florida passed a third iteration of its Live Local Act to close loopholes and pressure municipalities to conform. In Colorado, home-rule cities sued the state over what they consider an intrusion on their local authority.
California charter cities sued over a 2022 law allowing “missing middle” housing in residential neighborhoods and won last year. The state appealed the ruling.
Texas suburban cities preempted new state housing laws this year with ordinances that make building apartments more difficult and costly.
If the Connecticut compromise law works, the next few years should bring more projects entitled under locally crafted growth plans instead of one-off battles over every housing development.
If it stalls, the summer’s veto saga and this fall’s special session will look less like a reset and more like another chapter in Connecticut’s long habit of dodging its housing math.
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