Connecticut residents know that their state is becoming more expensive, but some new studies provide documentation of the ongoing problem.
New data shows that Connecticut ranks ninth nationwide for the highest rental rates. The average two-bedroom apartment costs more than $2,100 per month, which requires a salary of nearly $41 per hour to afford, one study said. Luxury apartments in places like Fairfield County and West Hartford can cost even more, while rents are lower in Norwich and communities across rural eastern Connecticut.
According to ZipRecruiter, the average hourly wage in Connecticut this month is $25.51 an hour. Further, according to the Massachusetts Institute of Technology Living Wage Calculator, a single person with no children needs $52,581 a year before taxes in Connecticut, which would be about $25 per hour. In that calculation, the housing cost is estimated at $15,496 per year, or about $1,291 a month.
The Out of Reach report, by the National Low Income Housing Coalition found that in Connecticut, the Fair Market Rent for a two-bedroom apartment is $1,842 and to afford that rent (and utilities) keeping to no more than spending 30% of income on housing a person would have to earn $6,139 a month or $73,664 a year.
According to Smart Asset you need $48.26 and hour, or $100,381 a year to live comfortably as a single in Connecticut.
Here’s what you have to earn to reach ‘comfort threshold’ in CT. Many of us don’t make it.
The most expensive rent in the nation is in Massachusetts, where a two-bedroom apartment costs an average of $2,920 per month. The rents vary widely as Boston and Cambridge are far higher than western towns at the other end of the commonwealth. Officials estimate that renters need to earn $56 per hour to afford the rent in Massachusetts if they are spending the traditional standard of 30% of their gross monthly income.
Across the country, the rent for two bedrooms averages more than $2,500 per month in California and Washington, D.C., while it is more than $2,300 per month in New Jersey, New York, and Hawaii. Prices in places like Manhattan and Honolulu can be far higher.
The lowest rents were in South Dakota, North Dakota, West Virginia, Arkansas, and Oklahoma, which were all below $1,200 per month for two bedrooms.
The survey of all 50 states was conducted by South Carolina-based Bluefield Realty Group with information from the Rent Cafe property listing service. The wages needed to afford the average rents are based on a 40-hour work week.
Connecticut has had high housing prices for decades, but officials said the problem has become particularly acute for young homebuyers as prices have skyrocketed since the coronavirus pandemic.
With inventories low, prices have jumped exponentially as buyers have scrambled for condominiums and homes after they have been out-bid by more well-heeled buyers. The bidding has prompted buyers to pay above the asking price for Greenwich mansions to New Haven condominiums to Greater Hartford homes.
At risk of stagflation
In another report, National Business Capital said that Connecticut ranks second as the “most at-risk state” this year for entering stagflation, which is a combination of inflation and stagnant growth.
“This report is yet another blaring neon warning sign: Connecticut is unaffordable for working class families,” said Senate Republican leader Stephen Harding of Brookfield. “It follows a survey from last week which revealed that more than half of Connecticut parents struggle to afford basic needs. And it comes on the heels of United Way of Connecticut’s annual report which revealed that the percentage of Connecticut households facing financial instability has risen 17% since 2019.”
Harding blamed the Democrats who control the state House of Representatives, Senate, and the governor’s office for the problems.
“Under one-party Democrat rule, Connecticut continues to get more and more unaffordable for hard working families, and our economy is stagnant,” he said. “Senate Republicans will continue proposing common sense solutions to cut taxes, reduce electricity bills, and help struggling working families.”
But the two top Democrats in the Senate, President Pro Tempore Martin Looney of New Haven and majority leader Bob Duff of Norwalk, said the problems have been generated by the Republican president.
“Stagflation is a term most Connecticut families never even heard of until Donald Trump’s reckless tariffs and disastrous economic policies helped bring it back,” the senators said. “Yet instead of standing up to the Washington Republicans who spiked inflation, electric rates, and grocery costs, Connecticut Republicans root for failure here at home.”
They added, “The facts tell a different story: Connecticut has a record Rainy Day Fund, balanced budgets, historic income tax cuts for the middle class, strong job growth, and rising incomes. While we’re working to make our state even more affordable, Senator Harding and his colleagues continue to pay fealty to Donald Trump because they would rather curry favor with their corrupt leader than better our state. Connecticut families deserve better than that kind of cynicism.”
CT economic outlook for year ahead on tariffs, taxes, Wall Street, prices
The senators were referring to the passage in June 2023 of a bipartisan, two-year, $51.1 billion budget that included the largest cut in the state income tax in Connecticut history. The Senate voted 35-1 with one Republican against, while the House had approved the measure after 1:30 a.m. on the same day by 139-12.
The bill called for a family earning $100,000 per year to see their state income tax cut in 2024 by nearly $600 — the largest dollar amount in a sliding scale. With the relief targeted toward the middle class, the tax cuts are not available for individuals earning more than $150,000 per year and couples earning more than $300,000 per year. Overall, 1 million tax filers — or 60% of the total — have been targeted for relief.
The fiscal plan has also helped senior citizens by smoothing out the sharp “cliff” in the state income tax for those with income from pensions, IRAs, and annuities, starting in 2024. This is designed to largely help individuals with federal adjusted gross incomes of $75,000 to $100,000, as well as couples earning between $100,000 and $150,000. Seniors at higher income levels do not benefit.
Christopher Keating can be reached at ckeating@courant.com