Substitute House Bill No. 5364 seeks to amend Connecticut's affordable housing laws by introducing tiered deed restrictions and clarifying the criteria for municipalities to qualify for moratoriums on affordable housing applications. The bill defines "set-aside development" to require that at least thirty percent of dwelling units be affordable to individuals and families earning thirty percent or less of their annual income, with additional provisions for those earning sixty percent or less of the median income. It categorizes set-aside developments into three classifications based on the duration of deed restrictions: "forty-year," "thirty-year," and "twenty-year." The bill also modifies the appeals procedure for affordable housing, allowing moratoriums to last four years (or five for larger municipalities) and establishing criteria for issuing certificates of affordable housing project completion.

Key changes include the insertion of new criteria for calculating housing unit-equivalent points, which consider factors such as the duration of deed restrictions and the type of housing units. The bill specifies that points will be awarded based on income levels and the length of set-aside developments, with family units in 40-year developments receiving 100% of points, 70% for 30-year developments, and 40% for 20-year developments. It also clarifies the process for municipalities to document their units and apply for moratoriums, allowing provisional approvals if the commissioner does not act within a specified timeframe. The effective date for these changes is set for October 1, 2026, and the bill may have fiscal implications for municipalities, potentially increasing legal costs due to more appeals while offering savings if more municipalities qualify for moratoriums.