May 7—NEW LONDON — Household incomes are increasing in New London even as home prices and rents continue to rise, according to findings in a new affordable housing study.

The study found that 52% of renter households are cost burdened, or spending more than 30% of their income on housing costs, leaving them less money for necessities such as food, transportation, education, health care and child care. More than 60% of households in the city rent as opposed to owning their home.

The New London Affordable Housing Plan, presented to the City Council's Public Welfare Committee at City Hall on Monday, recommends the the city continue its work on increasing the availability of affordable housing units, especially larger-size units. The study estimates that there are a total of 1,218 households with four or more people and only 290 units with four or more bedrooms. The result is that families rent units with a fewer number of bedrooms than there are people.

The study was compiled by RKG Associates and a requirement of a new state statute that also mandates the study be conducted every five years. The affordable housing plan must also specify how a municipality intends to increase the amount of affordable housing.

RKG Associates is an economic, planning and real estate consultant company with offices in Washington, D.C., Boston, Atlanta, Dallas and Durham, N.C. RKG Associates Principal Eric Halvorsen said the company is working with 18 other municipalties on similar affordable housing plans. New London's plan was completed with input from a committee led Judi Cox, who works in the city's Office of Development and Planning. The committee included residents and representatives from the New London Housing Authority, Connecticut Fair Housing Center and Eastern Connecticut Housing Opportunities, or ECHO. ECHO is a nonprofit whose mission is to provide affordable housing to low-income families and individuals.

The housing study suggests more work can be done to address the disparities that exist in the city. The city's median gross rent is $987 per month and the median home value is $229,949. Rents for a one-bedroom apartment rose by 60% between 2011 and 2019. Household incomes have grown in most segments of the population except for Black households, which experienced declines.

The study estimates that 60% to 65% of people working in the city's largest occupation categories can't afford rent or a new home. Those categories include office and administrative support, health care, sales, management, food preparation and education instruction.

New London, which has 22% of its housing stock considered affordable as of 2021, already exceeds the state requirement of 10%, the study shows. Affordable housing, according to the U.S. Department of Housing and Urban Development, costs no more than 30% of a families household income.

In New London, there is a boom in the construction of new market-rate apartments. Mayor Michael Passero said the new construction is easing the burden in New London, where finding a vacancy at any price is hard to come by.

"Without this inventory of housing we're building now, which we didn't have, the people that can afford these market-rate housing units would otherwise be taking up housing on the lower end and taking away from the people that can't afford that market," Passero said. "This relieves pressure on the housing market."

Felix Reyes, director of the city's Office of Development and Planning, said the city's strategy is to strike a balance. While new market-rate units continue to be built, the city will continue to look for opportunities to develop more affordable and maintain the existing stock "so that we don't lose what we already have."

Passero said would-be developers of affordable housing in the city suffer from a lack of federal funding because New London already has a relatively high rate of affordable housing. One example is the repeated attempts by the Massachusetts-based Affordable Housing and Services Collaborative to develop low-income housing to serve the families that were being moved out of the 124-unit Thames River Apartments, which was federally subsidized and managed by the New London Housing Authority. Affordable Housing and Services Collaborative was unsuccessful in multiple attempts to secure funding for the project from programs sponsored by the Connecticut Housing Authority and Connecticut Housing Finance Authority.

The recommedations of the New London Affordable Housing Plan include: expansion of the first-time homebuyer program, creation of an affordable housing trust fund, promotion of shared equity programs, rehabilitation without displacement, and creation of a registry and inspection process and consideration of a fair rent commission.

The recommendations would help the city meet a list of goals that includes increasing affordable home ownership opportunities, particularly for communities of color and thise impacted by urban renewal.

Councilor James Burke, during Monday's presentation by RKG Associates, noted the concentration of higher incomes and home values are in the southern part of the city versus the north. He asked if it was possible to combat "the economic segregation that seems to be happening with the economically depressed portion of the city to the north to the more economically viable in the south."

RKG Associates Principal Eric Halvorsen, who presented the plan, said some of the differences are related to the concentration of renters to the north and, not surprisingly, the higher home values are closer to the water. He said the city potentially could target the southern areas with inclusionary zoning, which requires new housing construction to include a certain number of units affordable to low and moderate incomes. He said the city also could identify any city-owned properties for construction of low-income housing.

Frida Berrigan, a convenor for the Southeastern Connecticut Community Land Trust, said at Monday's meeting that "I saw a lot in the draft that's critically needed," and she was happy to see her organization mentioned as part of the solution. She said she would be paying attention to "how all of these great ideas get implemented," and "who within the current city government is tasked with this."

"All of the ideas were really good but I'm concerned about implementation," she said.

Berrigan, a former Green Party candidate for New London mayor, was the only member of the public to speak at Monday's City Council Public Welfare Committee meeting, whose chairperson is City Councilor Martha Marx. A half-dozen people were in attendance at the committee meeting, which was held prior to the City Council meeting.

The Southeastern Connecticut Community Land Trust is a nonprofit organization that holds land for the development of permanently affordable housing, food production, green space and facilities for community organization, according to its website. The group recently held an event called "Homeownership in New London: A Historical Perspective on Racist Barriers to the 'American Dream' and How to Build Equity Now."

The city this year used federal COVID-19 pandemic relief funds to revive its first-time homebuyer assistance program and in 2019 partnered with the nonprofit Eastern Connecticut Housing Opportunities, which is purchasing, rehabilitating and reselling homes as owner-occupied rental properties in a program called Hempstead District Homeowners Program.

The council is expected to consider adoption of the plan at its 7 p.m. May 16 meeting at City Hall. The full plan is available on the city's website, newlondonct.org.

g.smith@theday.com