When Hartford Business Journal launched its “CT’s Economic Competitiveness” series earlier this summer, one theme quickly stood out: the state’s regulatory environment is a drag on growth.
From unpredictable permitting delays to layers of local zoning rules, the state too often makes it harder — not easier — for businesses and developers to invest here.
Yes, progress is happening. At the state Department of Energy & Environmental Protection, Commissioner Katie Dykes’ “20BY26” initiative has accelerated permit approvals, consolidated overlapping environmental permits and introduced a concierge-style help desk for developers.
The sunsetting of the Transfer Act in 2026 is another welcome step toward modernizing environmental rules.
But, despite these reforms, Connecticut still struggles with business-friendliness, ranking 32nd in that category in CNBC’s 2025 “America’s Top States for Business” index, even as it inched up to No. 28 overall.
The state should do better. Plus, regulatory reform is a far simpler and more cost-effective way to improve the business climate than rolling out a new incentive program that relies on taxpayer dollars to lure companies and investment.
A 2024 policy brief on housing permitting by the free market-oriented Mercatus Center at George Mason University reflects Connecticut’s challenges. It noted that construction timelines in the Northeast have nearly doubled since the early 2000s — from about 10 months to almost 20 — largely because of delays in planning and permitting.
In Connecticut, the Inland Wetlands and Watercourses Act, established in 1972, has become a choke point, according to the policy brief, with local zoning boards often staffed by untrained volunteers, and hundreds of lawsuits causing average delays of more than two years.
Even meritless legal claims add enormous costs and uncertainty, according to the Mercatus Center, which recommends some practical reforms, including mandatory training for wetlands board members, limiting legal challenges to parties with direct property interests, and crafting clear and objective state standards that waive the need for an inland wetlands agency review.
It also urges municipalities to modernize conservation and development plans with measurable data — from housing and zoning capacity to infrastructure and sewer availability — so planning decisions rest on facts rather than assumptions.
Developers echo these frustrations. At HBJ’s Cranes & Scaffolds Commercial Real Estate Conference earlier this month, panelists noted it can take as long as 18 months just to secure local approvals before putting a shovel in the ground. In a competitive region like ours, where New York and Massachusetts are also vying for projects, those kinds of delays are unacceptable.
The bigger problem is fragmentation.
Every town runs its own permitting system, with different timelines and zoning rules. A regional approach — even just standardizing some guidelines — would reduce duplication and speed up investment.
Towns that cling to home-rule traditions risk holding back the entire state, especially when it comes to addressing the housing shortage.
Lawmakers have recognized the need for change. The state House passed a bill earlier this year requiring every state regulation to be reviewed every seven years. Unfortunately, the measure stalled in the Senate.
That kind of accountability should be a priority if Connecticut is serious about competitiveness. Lawmakers should raise and fully pass the bill next session.
Connecticut has plenty of strengths: its location in the heart of the Northeast corridor, a highly educated workforce, blue-chip corporate headquarters, and relative affordability compared to neighboring states. But those advantages are undermined when businesses and investors can’t get timely answers or consistent guidance from regulators.
Permitting reform may not grab headlines like tax cuts or splashy corporate relocations, but it’s every bit as important to economic competitiveness.
If Connecticut wants to shake its reputation for red tape, it needs more than incremental changes. It needs comprehensive, coordinated reforms that make regulation smarter, faster and fairer.
