With the ongoing housing crisis affecting many communities across Connecticut, the introduction of House Bill 7112 on March 26, 2025, aims to tackle pressing issues related to housing affordability and homelessness. This legislative proposal seeks to establish a framework for innovative solutions, including the creation of an Affordable Housing Real Estate Investment Trust (REIT) and a housing opportunity tax credit for landlords.

The bill's primary focus is twofold: first, it mandates a study by the majority leaders' roundtable group on affordable housing to explore the feasibility of an Affordable Housing REIT. This initiative would involve acquiring housing units for long-term retention as affordable housing, secured through deed restrictions. The goal is to reduce the cost of deed-restricted affordable units in Connecticut, addressing the growing demand for affordable housing options. The roundtable is expected to submit its findings and recommendations by January 1, 2026, providing a roadmap for future legislative action.

Secondly, the bill proposes the establishment of a task force to evaluate the potential benefits of offering a housing opportunity tax credit to landlords who rent to formerly incarcerated individuals. This credit would amount to 25% of the rental income received from such tenants and could be applied against state income tax owed by the landlords. This provision aims to incentivize landlords to provide housing to a vulnerable population, thereby aiding in their reintegration into society and reducing recidivism rates.

The introduction of House Bill 7112 has sparked discussions among lawmakers and advocacy groups. Proponents argue that the bill addresses critical issues of housing insecurity and social justice, while opponents express concerns about the financial implications for the state and the potential for landlords to exploit tax credits without ensuring stable housing for tenants.

The economic implications of this bill are significant. By potentially increasing the availability of affordable housing and supporting formerly incarcerated individuals, the legislation could contribute to a more stable workforce and reduce reliance on social services. However, the success of these initiatives will depend on the thoroughness of the studies conducted and the willingness of stakeholders to collaborate on effective solutions.

As the legislative process unfolds, the outcomes of the studies mandated by House Bill 7112 will be closely monitored. The findings could shape future housing policies in Connecticut, reflecting the state's commitment to addressing the intertwined issues of housing affordability and social equity. The bill's progress will be a crucial indicator of how Connecticut plans to navigate its housing challenges in the coming years.