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SB 778

AN ACT ESTABLISHING A TAX CREDIT AND AWARDING HOUSING UNIT-EQUIVALENT POINTS FOR THE CONVERSION OF COMMERCIAL AND INDUSTRIAL PROPERTIES FOR RESIDENTIAL USE.

2025 Regular Session Introduced by Paul Cicarella and 1 co-sponsor

Connecticut offers tax credits and points to encourage converting commercial/industrial buildings into residential housing, aiming to increase housing supply and revitalize underused properties.

REF. TO JOINT COMM. ON Housing
#housingandcommunitydevelopmentprojects #taxcredits
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Bill Summary · SB 778

Legislative bill overview

SB 778 creates financial incentives for property owners to convert commercial and industrial buildings into residential housing. The bill establishes both a tax credit mechanism and a "housing unit-equivalent points" system to encourage these conversions, addressing housing supply by repurposing existing structures rather than requiring new construction.

Why is this important

Connecticut, like many states, faces affordable housing shortages and vacant commercial real estate, particularly in downtowns and industrial areas. By offering tax incentives for conversion projects, the bill aims to increase residential housing stock, revitalize underutilized properties, and potentially reduce pressure on greenfield development. This approach can be more economical than new construction while addressing both housing and urban renewal goals simultaneously.

Potential points of contention

  • Cost to state: The tax credits could significantly reduce state revenue, and the bill's fiscal impact isn't specified—unclear how much the state will subsidize these conversions and whether it represents efficient use of public funds
  • Property owner eligibility and incentive adequacy: Questions remain about which conversions qualify, whether the incentive levels are sufficient to offset conversion costs, and if this primarily benefits large developers versus small property owners
  • "Housing unit-equivalent points" definition: The mechanism is vague—how points are calculated, what they're used for, and whether they create market distortions or administrative complexity needs clarification
  • Affordability requirements: No mention of whether converted units must be affordable housing or market-rate only, potentially missing the core affordability crisis the state faces

Compiled from official sources — confirm details with the bill’s official record.

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