The state permitted 9,834 homes in 2025. Strip out the houses and 79 percent of the permits were in multi-unit buildings. Give every small building an owner and the rental share is still 77 percent. The hearing number everyone quotes misses most of the shortage.
Connecticut has figured out how to build. Nearly four of every five homes it permitted last year come with a landlord.
The Department of Economic and Community Development’s statewide row for 2025 is 9,834 permitted homes. Single-family houses were 2,033, or 21 percent. Two-unit buildings were 363. Three- and four-unit buildings were 281. Buildings of five or more were 7,157, or 73 percent. Add every multi-unit permit and the share is 7,801 out of 9,834, which is 79 percent.
A permit does not say lease or deed. The floor is still a landlord’s year. Give every two-unit building one owner, every three- or four-unit building one owner, and the buildings of five or more none. That leaves 7,525 rentals, or 77 percent. A 200-unit building does not have an owner in unit 4-B. Nearly 80 percent is the honest headline.
The hearings differ. The money does not. One board approval spreads site work, engineering, and legal fees across many doors. A lender underwrites the rent. The town collects the tax bill. The household gets a renewal. Bloomfield already has 214 apartments in the center of town, with 200-plus more proposed a block away. Glastonbury approved 266 this spring. Manchester approved 40 in an old mill. Southington cut a plan from 65 to 54. Milford approved 20, then 9. Stamford filed 1,564 of the state’s permits, nearly all apartments. The Hartford Courant reported Bloomfield studios at $1,906 and three-bedrooms at $4,259. The owner of the 214 told the economic development commission the building generates about $2 million a year in taxes. That is his figure, not an assessor’s printout.
The number in the room
In 2023 the legislature ordered a housing study. In 2025 ECONorthwest delivered the Connecticut Fair Share Housing Study. Depending on the method, the state needs between 120,000 and 380,000 homes.
Hearings use about 120,000, the count for households under 80 percent of area median income. That is the midpoint income for a family of four. Statewide it was $124,600 in 2025. The 120,000 figure measures the lower end. It fits a subsidy hearing.
The final report puts the all-incomes need at 379,996. A draft table split a similar count, 358,887 homes, by income band and found that 241,964 of them, 67 percent, sat above the 120 percent line. That line is about $150,000. A two-income household above the middle. Not a millionaire. Those households did not leave. They bid on existing houses, or they sign a lease, because nearly 80 percent of what was permitted is a lease. Ten years on, the tenant holds canceled checks. The owner holds the appreciation.
Four people, one word
Ask four people what Connecticut needs. All four say housing.
The advocate means a cheaper apartment and a slower eviction. The town means pipes. East Lyme has paused large projects over sewer capacity. The governor means a plan on file. He vetoed a larger bill, signed a smaller one, and said the smaller one was not enough. The builder means more doors on the same land.
Every constraint is real. A unit on a report can still be a lease. A deed is a different asset. The hearings are counting units. The 2025 row shows who got them.
Two deals that died
Through the 1980s, the 1990s, and into the early 2000s, a small builder could buy a lot, build a plain house, sell it at completion, and leave. The profit was in the construction. The buyer was not getting the cheapest house on the block. He was buying new, at a price that still cleared the cost.
A different buyer took the cheapest existing house on the block, tired kitchen and all, and put labor in where cash was short. Years later the house was worth more than he paid. The seller had already been paid.
The new house was never the cheap house. The old one was. Both are scarce now, and they died of different causes. In 2025 the state permitted 2,033 houses and 7,157 units in buildings of five or more.
The lump-sum problem
Lumber and paint scale with square footage. The lot, the hearing, the septic test or sewer connection, the ledge, and the code do not. A 1,200-square-foot house needs the same curb cut, the same survey, and the same zoning night as a 4,000-square-foot one.
The National Association of Home Builders, in a June 2026 study, put regulation at $131,734 on an average new single-family house, 26.4 percent of a $499,500 price. It is a national builder survey tied to the Census average, not a Connecticut audit. When a large share of the bill is a lump sum, a smaller house does not produce a smaller loss. It produces a worse margin. Builders in eastern Connecticut are quoting $185 to $230 a square foot before land and site work. Add those and their all-in figures often land between $800,000 and $1 million. Those are quotes, not closed sales. The midpoint of existing sales, Berkshire Hathaway as reported in October 2026, is about $450,000. A new house cannot be delivered there without a loss.
Who covers the gap
The household that can carry $450,000 cannot cover the difference. The buyer of a million-dollar house can, and he is not padding the builder’s fee. Revisions and site work often leave the builder thinner than a plain production job used to. He pays the gap because he wants that house. Profit did not climb the price list. Surplus did.
The apartment owner covers it with rent. Institutional debt will underwrite cash flow. It will not underwrite a starter house that misses its cost on day one. That is why 7,157 of the 9,834 permits sit in buildings of five or more. At about 10,000 homes a year, a 380,000-home gap takes close to 38 years, before any new household is counted. On the 2025 split, about 8,000 of those 10,000 come with a landlord.
Other places, other levers
Houston cut minimum lot sizes. Pew, citing the University of Texas, counted at least 34,000 townhouses from 2007 to 2020. Where a townhouse replaced a single house, the median assessed value was $340,000, against $545,000 for other new single-family houses. Cheaper than the other new house. Not cheap. The change was the lot.
Minneapolis ended single-family-only zoning. A 2025 paper found prices and rents growing more slowly than in a constructed comparison, and did not find more construction. A claim that the city built its way out is not in that paper.
Singapore does not travel. Its statistics office reported that in 2025, 77.2 percent of resident households lived in public flats and 91.2 percent owned. The state owns the land. Connecticut does not.
The tool nobody is using
An owner of a three-family can sell one unit for cash, carry the note on the second, and keep the third. The buyers pay his basis down. He earns interest on the note. He keeps one unit with a smaller balance. Two households get deeds without buying the building. More owners on a street usually means more upkeep. A condo with no reserves can go the other way.
Condominiums created before 1984 sit under the older Condominium Act. A conversion done now falls under the Common Interest Ownership Act. Either way, the blanket mortgage has to be paid off or released as to the unit being sold. A local lender will sometimes set that release price in writing. A loan sold to Fannie Mae or Freddie Mac often will not, because a due-on-sale clause lets the holder call the note. Conversion tenants have a statutory right to notice and a first option to buy.
Under the Consumer Financial Protection Bureau’s rules, an individual who finances one owner-occupied sale in twelve months, who owned the property and did not build it as a contractor, can use a narrow exemption. A builder financing houses he constructed generally cannot. One carried note on a building he bought is the lane. A balloon the buyer cannot refinance is not a sale. FHA single-unit condo approval requires a project of at least five units, so a three-unit conversion does not qualify. Zoning can create the door. The secondary market can still refuse the buyer.
The hearing number is about 120,000. The all-incomes number is about 380,000. The 2025 permit row is 9,834, and 79 percent of it is in a multi-unit building. Developers are not choosing leases out of taste. A lease is the stack that can carry a cost a starter deed cannot. The unused private tool is the owner who sells one door, carries one note, and keeps one. Lender first. Release price in writing. Cash sale first. One note the buyer can someday refinance.