The proposed legislation, known as Substitute Bill No. 1361, establishes a Housing Growth Fund aimed at supporting municipalities in increasing the availability of affordable housing and promoting mixed-use and mixed-income developments. The fund will be administered by the Commissioner of Economic and Community Development, who is tasked with allocating $50 million annually to eligible municipalities. The bill outlines specific definitions related to housing, including "dwelling unit," "mixed-income development," and "transit-oriented development," and sets forth a framework for calculating a "housing growth score" for each municipality based on the number of dwelling units approved for construction in the previous fiscal year.

To qualify for grants from the Housing Growth Fund, municipalities must meet certain criteria, including having approved a minimum percentage of housing permits relative to state totals and ensuring that a significant portion of new housing is affordable to low- and moderate-income families. The bill also mandates that municipalities submit necessary documentation for the calculation of their housing growth scores and establishes penalties for non-compliance. The act is set to take effect on October 1, 2025, and introduces new sections to the general statutes without deleting any existing legal language.