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Under Connecticut affordable housing laws, including 8-30g, a developer can circumvent local zoning laws and build rental apartment buildings in many parts of Greenwich. In this model 70% of the units are rented at market rates and 30% are set aside for affordable housing for a term of years. This type of development is done without needing approval of local zoning and can dramatically change Greenwich.
One of the ways to discourage this type of development is through higher real estate taxes which must be passed on to the renters in the form of a higher rent. If rents are too high, then the building is less profitable and this discourages a real estate developer from building.
In Greenwich all real estate is assessed and taxed based on a percentage of value normally called the mill rate.
In New York City different categories of structures are taxed at different mill rates. Single and up to 3 family structures are taxed at a mill rate that is about 1/3 that of an apartment building or commercial building.
Through a revision of the Town Charter, Greenwich could create different mill rates for multiunit apartment buildings compared to single family or two to three family homes. If that were done, the 8-30g units, using the NYC model, would be paying a mill rate that would be triple that of a single family home of comparable assessed value. Existing buildings could be grandfathered in at their current mill rate structure and therefore existing buildings would not be affected. The higher taxes that would be imposed on high rise buildings would force the landlords to charge higher rents. If the rents needed to return a sufficient profit on the building needed to be too high, these high rises would not be built.
Through a revision of our charter, a new real estate taxing structure could be created that could prevent uncontrolled overdevelopment in Greenwich.
