🔒As entry-level home construction declines, developer plans East Hartford subdivision for middle-income buyers

West Hartford architect-turned-developer Matthew Haubrich is betting he can still build something that has become difficult to find in Connecticut: newly constructed single-family homes priced for middle-income buyers. Haubrich is proposing a 19-house subdivision in East Hartford with projected sale prices between $400,000 and $500,000 — a range that stands out in a state where most new houses are marketed well above that level. As of Jan. 28, Realtor.com showed 50 houses in Connecticut that were one year old or newer listed for $500,000 or less, compared with 543 priced above that threshold. Many of the lower-priced listings were in urban centers such as Hartford or Waterbury, or in more remote parts of the state. “It’s hard to find affordable houses in Connecticut these days,” Haubrich said. “That’s why I got into doing this. I see a huge need not only in the state, but in the entire country. It’s getting very difficult to build this.” The project highlights a widening gap in Connecticut’s housing market: while apartment construction has surged in recent years, entry-level single-family homes have become increasingly scarce. Builders and housing policy experts say factors including land prices, construction costs and local regulations often push new homes into higher price tiers, making developments like Haubrich’s an outlier rather than the norm. Beyond the housing market, the issue also carries economic implications for the state. Business leaders and policymakers increasingly link housing availability to Connecticut’s ability to attract and retain workers, particularly as employers report ongoing labor shortages. Working with Meriden-based builder Volpati Homes, Haubrich’s development — called Eastwood Crossing — plans to offer three- to four-bedroom houses with two-and-a-half bathrooms, ranging from 1,400 to 2,000 square feet. The homes would sit on lots between 10,000 and 15,000 square feet, with buyers choosing from floor plans including capes, modern farmhouses and colonials. To control costs, the development would rely on low land prices, higher density and slab-on-grade construction without basements, Haubrich said. He purchased the vacant parcels at 215 and 231 Brewer St. for $108,800 in August 2024. The properties sit near a densely developed corridor and are surrounded largely by modest single-family homes built more than 58 years ago. Haubrich has received a wetlands permit but still needs local subdivision approval. If granted, he hopes to begin site work in June, with a model home ready about six months later.

Tight regulations, rising costs

In the 1980s, about 40% of newly built single-family homes in the U.S. qualified as “starter homes,” typically around 1,400 square feet or less, according to Alex Horowitz, housing policy director for The Pew Charitable Trusts. Today, less than 10% of new homes fall into that size range.

In March 2018, Connecticut had more than 16,000 homes for sale at an average price of $252,000, Horowitz said. By March 2025, inventory had dropped below 5,000 homes, while average prices climbed to $414,000 — a 70% decline in inventory and a 64% increase in prices. Overall, single-family construction in Connecticut has fallen sharply over the years. The state issued more than 9,000 single-family building permits annually in most of the early 2000s, compared with under 3,000 for much of the last decade-plus, according to U.S. Census Bureau figures. One of the main obstacles to adding new single-family housing, Horowitz said, is the growth of minimum lot-size requirements — zoning rules that dictate how much land each home must sit on. “And Connecticut is notorious for having large minimum lot sizes,” Horowitz said. Cities that have reduced minimum lot sizes, including Houston, have seen sharp increases in housing production, he said. In 1998, Houston reduced minimum lot sizes in parts of the city from 5,000 square feet to 1,400 square feet, increasing density from eight homes per acre to 31. Houston expanded the policy citywide in 2013. Between 1998 and 2023, Houston added about 80,000 starter homes, including town house-style developments. “If your builder has an acre of land, they make more money building 10 or 15 starter homes than building one large house because they’re just selling to more customers, and they have a margin on each home,” Horowitz said. “But if they can only build one home per acre, you can be sure it’s going to be a big, expensive home.” Horowitz said factory-assembled housing remains another option for controlling costs. Modern manufactured homes, built to U.S. Department of Housing and Urban Development code, are energy efficient and comparable in quality to site-built homes when placed on foundations. But financing remains a hurdle. In Connecticut, manufactured homes are classified as personal property, like vehicles, which makes mortgages harder to obtain, Horowitz said. In New Hampshire, by contrast, manufactured homes erected on foundations are treated like site-built houses, giving buyers access to lower interest rates and stronger consumer protections. Slow permitting processes and high fees also encourage builders to pursue larger, higher-margin homes, Horowitz said. “Connecticut makes it harder to build than other states do,” Horowitz said. “There’s a reason Connecticut ranks 49th out of 50 states in permitting new homes. And the reason is Connecticut has more regulatory barriers. These are mostly enacted at the local level.”

State reforms and local impacts

In response, state lawmakers have begun trying to address those housing barriers. Horowitz said Connecticut adopted a “strong” housing reform package in November, but cautioned that further changes to allow higher-density housing are still needed. The law requires communities to develop housing growth plans and includes a mix of mandates and incentives. It drew strong support from Democratic lawmakers and Gov. Ned Lamont, but faced opposition from some Republicans and other groups that argued it weakens local control and adds new burdens for municipalities. While many provisions focus on multifamily housing, the law also includes incentives for single-family construction, including expanded homebuyer assistance, requirements that manufactured housing be treated the same as similar residential developments under zoning, and an expansion of the Healthy Homes grants program to cover contamination issues such as radon and asbestos. Builders, however, say more direct action is needed to jump-start starter-home construction. The Home Builders & Remodelers Association of Connecticut (HBRA) is urging lawmakers to adopt a bill this session promoting smaller, lower-cost homes through higher allowable density and tax incentives, said Jim Perras, CEO of the association.

HBRA is proposing that towns allow, as of right, development of eight houses or 10 town houses per acre in areas served by public sewer and water. The projects would not require public hearings but would still undergo municipal staff review. In return, at least 20% of homes in these developments would be sold at prices capped at four times 120% of the area median household income. Under the proposal, resale price limits would begin easing in year six of ownership and expire after 10 years, allowing buyers to gradually build equity. The association also wants to offer builders a 25% state income tax credit to help cover the cost of extending sewer and water infrastructure to development sites. Perras said current zoning restrictions and cost pressures have pushed many builders away from single-family projects and toward small- and midsize multifamily rentals. “You talk to any builder, and they’ll tell you we don’t want to build McMansions, we don’t want to build 2,000- or 3,000- or 4,000-square-foot houses on 3-acre lots,” he said. “But that’s the model they have to work with because municipalities aren’t allowing them to build smaller houses on smaller lots.”

‘Important social issue’

Natuzza Dimasi, a sales associate with William Raveis’ Middletown office who is set to market Haubrich’s planned Eastwood Crossing subdivision, said statewide demand for reasonably priced homes among first-time buyers is strong. But between January and October of last year, only 30% of the 5,944 housing permits issued statewide were for single-family homes, Dimasi said. “That tells us they are saturating the market with rentals and these first-time homebuyers are having such a hard time getting a home for their family,” Dimasi said. “Matt’s concept will build quite a few houses and make them affordable for a first-time homebuyer.” Guido Volpati, owner of Volpati Homes, said most of his business has centered on custom houses. He is working with Haubrich on a 3,000-square-foot custom farmhouse in Meriden that drew a buyer willing to pay about $700,000 just two days after it hit the market, he said. Additional upgrades requested by the buyer will raise the final price further. Volpati said he expects rising demand for more modest, attainable homes, noting there are only so many buyers who can afford the $600,000 to $1 million price range that dominates today’s new-home market. “There are plenty of people out there with money, but there are more people who need more affordable houses,” Volpati said. He said building multiple homes in a subdivision like the one proposed in East Hartford allows for bulk purchasing of lumber, roofing and other materials, lowering costs. Additional savings can come from using less expensive — but durable — fixtures, such as fiberglass tubs. Factory-built roof trusses, rather than hand-cut supports, also speed construction and reduce expenses, he said. Haubrich said he estimates his subdivision will take three to four years to fully build out. He is also considering another starter-home development on a nearby site, featuring smaller homes of 1,000 to 1,500 square feet with rear-facing garages. The concept would appeal to empty-nesters, older buyers and others seeking a close-knit community, Dimasi said, adding that she receives frequent inquiries from buyers looking for smaller homes. Although Haubrich’s previous projects focused on higher-end homes, he said he hopes to make a practice of building at lower price points. “I see this as becoming a more and more important social issue of our time,” Haubrich said. “We need to have people who can live and work in the same community and not be pushed further and further out from job centers. The challenge is keeping the cost within the reach of first-time homebuyers.”