New London County, like so many residents within its borders, is stuck.

The 665-square-mile swath of land, moored by the insulated splendor of Long Island Sound and rising up on the shores of industry along the Thames River, finds itself mired in two different affordable housing crises.

The first is a crisis everywhere. Stretching from coast to coast, it involves the basic mismatch between the amount the nation’s lowest-income earners make and the cost of housing.

In southeastern Connecticut, that means someone has to earn $27.80 an hour or work almost two full-time jobs at minimum wage to afford a two-bedroom apartment, according to data from the National Low Income Housing Coalition. The minimum wage is $14 per hour.

The problem is visible locally in New London’s Red Roof Inn, where Jessica Varas and Mark Beaudrot have been living with their two young children for more than a year because no landlords will rent to them with their eviction history.

“I can afford an apartment and I have money for the deposit and everything, but nobody wants to look past the eviction,” she said.

Varas works full time at Dollar General for about $500 per week, she said. Beaudrot, who has a heart condition brought on by a blood infection, gets $700 per month in state assistance. They pay $1,100 a month for the room.

Housing is considered affordable when the people who live there don’t spend more than 30% of their income on the rent or mortgage, plus associated expenses like utilities and taxes. Based on their income, affordable rent would be around $810.

At the motel, the two sisters in matching dresses ran back and forth on the concrete, second-story balcony of the motel because their parents fear syringes and crack pipes in the grass below. At 2 and 3 years old, the girls are polite and precocious talkers. The youngest asked to be picked up by anyone who walked by.

“It’s not like we want to be here,” Varas said. “We’re just stuck here.”

In New London County and across the state, safe and healthy places to live are often too expensive for those in many income brackets. More and more, prices driven up by limited supply and high demand are rendering the market out of reach for an even wider swath of the population.

That, according to affordable housing policy expert Sean Ghio, is the other crisis.

“Our housing market being too expensive for all kinds of other people, that’s not everywhere,” he said. “That’s in Connecticut. That’s in New York. California is a poster child for that.”

Ghio, policy director for the statewide Partnership for Strong Communities advocacy group, said a shortage of new construction means wealthier residents are bidding up costs for older, less desirable homes that otherwise would be affordable to lower income households.

The Rev. Cathy Zall, an ordained minister who has been at the forefront of the housing crisis in the region since she became executive director of New London’s Homeless Hospitality Center in 2007, said the pandemic has exacerbated the gap in affordable housing.

The region is catching the eye of out-of-state investors at a time when many landlords who were affected by delinquent rent payments during the pandemic have decided to sell their properties.

“Some of these long term landlords are being approached and they’re selling cash on 24 hours,” she said. “These venture capitalists are not coming to New London to buy properties to make them affordable housing.”

What was already a “mismatch” between housing prices and income will only get worse if aggressive action isn’t taken to address the shortage of housing, according to Zall.

“Unfortunately, there are not going to be fewer poor people,” she said.

‘Crisis is real’

More demand than supply means landlords can be pickier when it comes to selecting tenants. Many renters say it has become difficult — and sometimes impossible — to find a place for those who have an eviction on their record, a credit score below 700 or make less than three times the amount of rent.

Josephine Suarez lived for six-and-a-half years on East Lyme’s Sylvan Glen Road, a small cul-de-sac jutting out from a maze of interconnected suburban streets between Latimer Brook and the Cedar Ridge Golf Course. The inter-generational family consisted of Suarez, five children, two of their significant others, her grandson and three dogs.

Then the pandemic hit and the housing market got hot along the shoreline. In the summer of 2021, she got word her landlord had decided to sell the house.

The move late that year, which resulted from an agreement reached after her landlord started eviction proceedings, left Suarez and her two youngest daughters – one a student at the high school and one in the adult special education program – without a place to live. They stayed in motels and slept on the floor at a family member’s house while searching with increasing desperation for a living situation that would keep as much of her family as possible intact.

“The crisis is real,” she said.

She’s living now with her two daughters in a Norwich apartment they found through a friend of a friend. Her mother, who previously helped care for her disabled daughter so Suarez could work full time, cannot live with them because her own disability makes it impossible to climb to the third floor walk-up.

Suarez put in rental applications for a handicapped-accessible apartment at the Rocky Neck Village affordable housing development in East Lyme and a townhouse unit at the Carabetta development in New London, but was rejected on the grounds of poor credit and the start of eviction proceedings by her previous landlord.

Despite successfully appealing the rejection at Rocky Neck Village, she said she is still on the waiting list. Numerous units at Carabetta remain vacant because those in the management office can’t find low-income renters who meet the stringent qualifications.

“There’s apartments, but they’re not letting us rent them,” she said.

Leo Chomen, a real estate agent whose specialties include the Norwich rental market, estimated he sold about a dozen multifamily properties to out-of-state investors in that city alone since the pandemic.

He said low interest rates at the time compelled investors from New York and New Jersey to buy up properties going for less money than the housing stock in their home states.

But now interest rates are on the upswing again, with profound implications for both home buyers and renters. Experts worry those on the verge of being able to afford a home are going to find themselves priced out of the market.

Chomen estimated prospective buyers looking in the $230,000 range now might only be able to afford a $180,000 or $190,000 house, which he described as almost nonexistent in this market.

“The competition for them in that price range is huge,” Chomen said. “So, in effect, what that interest rate hike is doing is putting more pressure on the rental market. Supply and demand.”

According to Chomen, that’s going to make an existing problem worse “because there’s not going to be enough rental housing for everybody.”

A deepening divide

Combined with the forces of poverty, the housing shortage has shown in stark relief the deepening socioeconomic divide between the whitewashed facade of Old Lyme’s Ferry Street and the empty expanse of Crystal Avenue in New London where the Thames River Apartments once stood.

Fionnuala Darby-Hudgens, a Norwich resident and director of operations at the Connecticut Fair Housing Center, said the state’s slow-to-no growth philosophy has been in place for decades.

“We just don’t build housing,” she said. “And most of that is because of exclusionary zoning.”

Research from Jenny Schuetz, a senior fellow with the independent, nonprofit Brookings Institution, says the housing shortage is most prevalent along the western and eastern seaboards – including California and the northeast corridor from the U.S. capital to Boston – where strong regional job markets lure well-paid workers but where local zoning codes have tended to discourage new construction.

Affordable housing advocates describe exclusionary zoning as the process of using regulation to effectively prohibit multifamily housing developments where more people can live for less money. Prominent examples of this type of zoning include enforcing tight caps on how many units can be built on an acre, and how many stories high they can go. Such restrictions are an impediment to developers who are looking to spread their costs across more units to make projects profitable.

Darby-Hudgens cited exclusionary zoning as a symptom of housing and land-use policies going back more than a century that have disproportionately affected people of color.

Data in a 2021 report from the Urban Institute shows 69% of Black households and 70% of Latino households rent their homes in New London County, compared to 27% of white households. That’s among the largest gaps in the state, according to the think tank.

She detailed the rise of single-family zoning in the 1920s, the denial of mortgages for those in predominantly Black areas in the wake of the Great Depression and World War II, subsequent government investment in the mostly white suburbs, and a push for urban renewal that resulted in the demolition of many neighborhoods where low-income families lived.

“The intention of urban renewal was so different than the intention of suburbanization,” she said. “In suburbanization we built roads, we built schools, we built infrastructure, right? For white people. When it came time to put the investment into where people of color lived, we actually just tore it down and we said private investment will follow.”

Now, she said, government policies helping white people build equity through home ownership have been so successful that most of those who need cash assistance or welfare remedies are people of color.

The income disparity between owners and renters in New London is evident in statistics going back to the turn of this century. The median homeowner making $81,000 back in 2000 was making $92,000 in 2018, according to an analysis of Census data by the Urban Institute. But the median renter making the $42,000 median income in 2000 was only making $44,000 almost two decades later.

The evidence of segregation is most glaring when comparing the region’s small cities of Norwich and New London with the affluent shoreline communities, according to Darby-Hudgens.

She pointed to the median income in Old Lyme, which comes in at $105,417 as of the 2020 census, compared to $47,424 in New London. Eighty-two percent of residents in Old Lyme own their own homes, compared to 40% in New London.

“So you have this juxtaposition, this real dichotomy, of wicked poverty and wicked wealth,” she said.

Shifting the paradigm

In Connecticut, state legislators have tried to get around local resistance to multifamily construction through a law that makes it easier for developers to take their fight for affordable housing to court.

Known in statutory shorthand as 8-30g, the law allows developers to sue the town if their plans for affordable housing are rejected and shifts the burden of proof to the municipality. In these cases, it’s up to the town to prove that the risk to public health or safety outweighs the need for affordable housing.

8-30g hinges on a 10% threshold for affordable housing in each of the state’s 169 cities and towns. Once that target is met in a given community, developers no longer get an automatic court appeal when they put forth plans that don’t meet zoning regulations.

A March analysis by Tim Hollister and Andrea Gomes of the Hinckley Allen law firm credits the law with helping to generate 8,500 units of affordable housing since its implementation in 1990.

A development is considered affordable under 8-30g when at least 30% of the units are set aside at reduced rent for those who make less than 80% or 60% of the area median income. For most of New London County except for Colchester and Lebanon, HUD currently calculates the median at $102,700. That means a family of four would have to make less than $90,080 at the moderate-income level or $67,560 at the low-income level to qualify.

The statute has not been without controversy. Many suburban and rural towns view it as contrary to their deeply-held home rule ethos and a threat to their “character.”

More recently, municipalities were required to submit their own plans for bolstering affordable housing within their borders and to update them every five years.

Commercial real estate developer Mike Lech -- whose Old Lyme-based READCO Management LLC built Regal Cinema, Pawcatuck Farms shopping center, and a medical office building in Stonington -- said employees deserve to be able to live in the communities where they work.

According to Lech, now is the time for a comprehensive master plan to address the “staggering” shortage of workforce housing in the tourist area.

He cited Pawcatuck’s Route 2 corridor as being particularly well suited to affordable housing development.

While Pawcatuck is no stranger to affordable housing these days – there are five such projects in Pawcatuck that are recently completed, under construction or approved – they are located several miles away on Route 1.

He said the town is better served by local incentives like tax abatements than by reliance on 8-30g. An abatement, which freezes taxes over a series of years and can include stipulations on how the development will be built, can benefit both the developer and the town.

“It shifts the paradigm,” he said. “8-30g is the developer controlling the municipality. Tax incentives are the municipality controlling the developer. And that’s the paradigm you want.”

Stonington voters last fall rejected a $697,748 tax break over 10 years for an affordable housing development at the site of the former Campbell Grain building on Route 1. Twenty-seven percent of registered voters cast their ballots that day, marking the biggest turnout for a referendum in more than 34 years.

The 82-unit development is planned for the end of Coggswell Street next to the Pawcatuck River and the Amtrak rail line. Residents expressed concern about traffic, the lack of parking associated with the project and the clustering of affordable housing in Pawcatuck as opposed to throughout Stonington.

Lech acknowledged “affordable housing” has become a fraught term among those who incorrectly view multifamily developments as a drain on town services and a threat to property values.

He said there are better adjectives to describe housing for the restaurant servers, hotel housekeepers, and store clerks who support the local tourism industry.

Affordable housing “connotes something that’s negative,” he said. “And it shouldn’t be.”

e.regan@theday.com