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Incentive Housing Zone (IHZ) Program

Local Control

Only municipalities can decide whether housing is created in their towns and the Incentive Housing Zone (IHZ) program, officially known as the Connecticut Housing for Economic Growth (HEG) Program, was designed to complement that reality. It is a voluntary, incentive-based land use program created by the General Assembly in 2007 and begun in 2008. The program, administered by the state's Department of Housing, provides towns with incentives if they choose to create an Incentive Housing Zone in a smart growth location in their community.

An Incentive Housing Zone (IHZ) is an area which has a zoning overlay that allows developers to increase housing density in exchange for creating mixed-income housing. The program provides municipalities with complete control over the location, amount, type and design of the homes created, while also offering a tool that allows all residents of a town to have input into housing decisions: where it should be built, what it should look like, or whether it should be created at all.

A Program That Meets A Need

Connecticut has a low supply of affordable homes and most of Connecticut's existing affordable housing is located in only 18 percent of its towns and cities, with significant impacts on the state:

  • The state has lost a greater percentage of its millenial population than all but 11 states (based on the 2016 Census Bureau) since 2010.
  • Too many residents pay too much for substandard housing.
  • Elderly residents have no downsizing opportunities.
  • Working-class families have little choice of homes.
  • School districts and many businesses and municipalities can't find workers, police, firefighters or teachers.

The IHZ program is a tool that towns can use to create mixed-income communities with both affordable and modest, market-rate homes throughout the state.

A Simple System of Incentives

A municipality’s first step in the IHZ program is typically to receive a planning grant to help it determine its housing need, where housing could be accommodated, and how to zone successfully. There is no obligation to create housing or establish a housing zone after receipt of the planning grant. Towns that choose to create more housing using the IHZ program can create zoning with only two requirements:

  • That at least 20% of the units in the zone be affordable for households earning 80% of the area median income or less, and
  • That the zoning allows at least 6 single-family, 10 townhomes or duplexes, or 20 multifamily housing units per acre. (Rural towns and developments in which all of the units are affordable may request a density waiver from OPM.)

When the zone is created, towns then qualify for:

  • Zone Adoption Incentives of $20,000 when the zone is approved by DOH.
  • Building Permit Incentives between $15,000 and $50,000, when housing is built in the IHZ.

Towns may use Incentive money for any purpose.

Click here for more detail on the IHZ program benefits and requirements.

View a map of the current IHZ status of our towns. 

Here is a list of planning and zoning consultants.


To Date, Success!

The program has helped many Connecticut municipalities see the potential of housing to meet their residents’ needs and improve their local economy and tax base. More than 70 municipalities have taken part in the program – cities, suburbs and rural towns, all across the state. Thirty-four of them have adopted Incentive Housing Zones (IHZ) or similar zoning. Three have IHZ or similar zoning adoption pending and 41 towns have conducted studies to identify potential sites for IHZ or similar zoning. They now have a tool that allows them to create housing that meets their unique local needs. An infusion of state money into the program will allow many more towns to get help with their housing needs.

The Goal: Mixed-Income Communities

The IHZ program is helping to set the stage for thoughtful local planning of dynamic, mixed-income communities throughout the state. In addition, the program provides a way for towns to create mixed-use development that incorporates both housing and economic development. By allowing towns to plan for mixed-income housing and mixed-use development in smart growth locations, the program will foster communities throughout the state that are both economically and ecologically sustainable.