Hartford Market Studies

Client

Connecticut Housing Finance Authority (CHFA)

Skills

Appraisal, Market Study – Affordable Housing

Project Description

Clarendon was awarded a contract with the Connecticut Housing Finance Authority (CHFA) to provide Reviews of HUD Section 8 Rent Comparability Studies (RCS) for the State of Connecticut.

Section 8 laws and administrative procedures require HUD to obtain and review Rent Comparability Studies (RCS) when initially renewing most Section 8 contracts and when processing some rent increase using the Annual Adjustment Factors. The market rents resulting from these studies determine the rents owners can receive and, hence greatly influence whether an owner will renew and continue providing assisted housing or opt-out of the Section 8 contract and convert to unassisted, market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy.

Market Overview

The Hartford Metropolitan area includes Hartford, Middlesex, and Tolland Counties, spanning central Connecticut from the Massachusetts border to the north to the Long Island Sound to the south. The metropolitan area includes the City of Hartford, which is the state capital. Population gains since 2010 have lagged gains in other metropolitan areas in the region, such as the Boston metropolitan area, because of slower economic growth in the Hartford metropolitan area since the end of the national recession in June 2009.

Leading the job growth for the metropolitan area are the education and health services sectors. The area is home to the University of Connecticut and the University of Connecticut Health Center. In 2008 (the most recent data available), the university reported a statewide economic impact of $2.3 billion.

Since the beginning of Q4 2007, the fastest growing area of the Hartford Metropolitan apartment market has been the North/West Hartford submarket, adding 962 units over that period, or 24.6% of total metropolitan apartment completions. The market has now experienced eight consecutive quarterly gains in asking rent, for a cumulative total of 5.2%. Since the beginning of Q4 2007, the metro as a whole has recorded an annual average increase of 1.9%.

With 5,527 units, amounting to 14.0% of the total metro inventory, the City of Hartford submarket is the second smallest of the seven competitive Hartford submarkets identified by Reis. In the ten-year period beginning with Q4 2007, new additions to the submarket totaled 845 units, amounting to an annualized inventory growth rate of 1.7%; over the same period, the metro growth rate has been 1.0%.