The Fairfield County Business Council is taking the legislative route to stem the flow of young people from the county as well as kick-start stagnant job growth due to a systemic problem ­ lack of affordable housing.

And the absence of affordable housing is having a deleterious trickledown effect on the highways. With 30 percent of the county’s labor force coming from New York state, traffic congestion is impacting the roads, according to Joe McGee, vice president of public policy for the business council.

“A lack of middle-class, affordable housing in Fairfield County has an enormous impact on the transportation system,” McGee said. “There is a problem.”

A lack of job growth, along with a recent report detailing the loss of population between ages 25 and 34 in the state (Fairfield County Business Journal, Jan. 22), can at least be partially attributed to the dearth of affordable housing, McGee said.

“Job growth is low in Connecticut, and (affordable housing) is one reason,” he said. “It’s not the only reason, but a big one.”

With no county government in the state, each municipality has to come up with its own solution for affordable housing, also dubbed “work-force housing.”

Addressing the problem itself, the business council is proposing a bill to the state General Assembly that would create incentives for municipalities to add more affordable housing.

Some solutions

The voluntary plan would be available for municipalities that create an Overlay Zoning District, which would allow housing densities of at least six single-family units per acre or 20 multifamily units per acre, and set aside 20 percent of the housing in the zone as affordable to households earning 80 percent or less of the area’s median income.

Municipalities that create these zones would then receive incentives such as:

+ A one-time payment of $2,000 per unit for every unit possible in the district, after it is approved by the state.

+ A one-time bonus payment of $2,000 per multifamily unit or $5,000 per single-family unit when a building permit is issued for that unit.

+ Annual payments from the state for any additional net public school costs it incurs for any children who move into the district.

“We hope it to be introduced as a committee bill,” McGee said. “There’s a price tag, so it will have to be debated.”

The city of Stamford has been “very successful,” he said, since it passed a law five years ago requiring 10 percent of all new residential construction to be affordable housing. Those who would qualify for this type of housing are people making up to 80 percent of the median income in the city, McGee said.

Much more recently, Norwalk passed a similar “inclusionary zoning” law.

Stopping the exodus

Another bill, this one proposed by the Republican caucus of the state General Assembly, seeks to solve the problem of younger people leaving the state by helping graduates of state universities and two- and four-year colleges buy houses and settle in Connecticut.

The proposed First-Time Homebuyer Trust Fund act would establish a trust fund for those who enroll in the program. The portion of earnings that enrollees would normally pay toward income tax would instead go into the trust fund, which would be managed by the state treasurer’s office.

“It’s almost like forced savings,” said Rep. Dolly Powers, R-Greenwich, House of Representatives Republican leader-at-large. “We are very much aware of the fact we are losing our young people, and this is an attempt to look at the problem a little more creatively.”

Participants in the program would be able to withdraw their accumulated tax money, no more than 10 years after the initial deposit, for the sole purpose of purchasing a house in Connecticut or putting a down payment toward one.

The bill would also impose a penalty, as of yet undetermined, for funds withdrawn from the account used for a different purpose than buying housing, and if the money is not withdrawn within the 10-year time frame, it would be transferred to the general fund of the state budget.

Powers said interest generated from each account would also go into the general fund, so the state would not entirely lose out on all the income tax money it would have received from those participating in the program.

She said Republicans are hoping the bill is raised in the Finance Committee for discussion.

Encouraging developers

Powers said affordable housing in the state, and Fairfield County in particular, is a serious problem.

“(Affordable housing) is an oxymoron in Fairfield County,” she said.

Like Stamford and Norwalk, the city of Bridgeport also recognizes the need for affordable housing, according to Caryn S. Kaufman, community liaison to Mayor John M. Fabrizi.

While Bridgeport has not yet adopted a citywide affordable housing policy like Stamford and Norwalk, developers building in the city are encouraged to consider those needs, she said.

The city last week marked the start of construction on one such project, East Main Mews, on East Main Street.

The co-developers on the project, E/N Properties and Regan Development Corp., will redevelop six historic buildings, now vacant and deteriorated, and turn them into a housing development that will create 20 affordable rental units and four commercial/retail units.

The residential units will be available to people making 40 to 60 percent of the median income of Fairfield County.

E/N Properties works solely in Bridgeport and primarily buys vacant buildings and renovates them, according to Jason Epstein, a principal with the company.

The company constructs both affordable housing and luxury units, but does more of the former, he said.

Epstein and his partner at E/N, Victor Naar, own the East Main Mews building and had to wait three years to begin construction until all the financing fell into place.

The project is being privately and publicly financed by a number of sources, including the Connecticut Housing Finance Authority, the state Department of Economic and Community Development, low-income housing tax credits, historical tax credits and the Bank of America.

The development budget for this project is more than $5 million.