Connecticut wants young people to make a down payment on its future.
An incentive program included in the recently passed jobs bill will allow graduates of Connecticut colleges and universities a chance to deposit money into a first-time homebuyers account.
The program, “Learn Here, Live Here” would allow a graduate to deposit up to $2,500 annually for up to 10 years. Participants must remain a Connecticut resident for five years.
“It’s is a creative way to address two problems Connecticut faces,” said state Rep. Kim Fawcett, a Democrat representing Fairfield and Westport in the 133rd House District. “It targets our youngest professionals and gives them an incentive to stay in Connecticut and over the long term will help bring greater stability to the housing market in our state.”
“It's not intended to be a silver bullet,” said Rep. Tom Reynolds, a Democrat representing Ledyard and Montville. “It is one strand in a much larger multi-faceted strategy to create jobs and provide an environment for young people to afford to live here.”
The program is part of a broader plan to make Connecticut an attractive place to live and work, said Catherine Smith, commissioner of the Department of Economic and Community Development.
“My observation is this is part of a renewed interest and energy in getting young people to stay in the state,” Smith said. “It will also get the homebuilding and housing industry a little healthier too.”
According to Rep. Gail Lavielle, a Republican who represents Wilton and Norwalk in the 143rd House District, Connecticut loses more people between the ages of 18 and 34 than almost any other state. This could help stem the tide, she said.
“It’s not a huge thing, but it’s a nice little incentive. It’s meant to slow down the exodus,” she said.
Lavielle said it was an easy decision to vote yes. She taught six semesters at UConn before her election to the General Assembly. Each semester she’d ask her students who planned on staying in Connecticut.
In every class most students said they couldn’t afford to stay in the state, and if they did they’d be moving back home, Lavielle said.
“I think people recognize that as a very important issue,” said Rep. James Crawford, a Democrat representing Clinton. “It comes up all the time, it's part of almost any discussion. It' jut too scary a prospect to have 45 percent of your population over 60 (years old), it's scary.”
All graduates of public colleges, universities and regional vocational-technical schools in Connecticut who qualified as in-state students and paid the in-state tuition rate are eligible for the program. They must have graduated on or after January 1, 2014.
The annual total for all program participants is $ 1 million.
Fred Carstensen Director of UConn’s Center for Economic Analysis called it a modest gesture at best.
“The real problem is there have to be jobs here that Connecticut graduates want to take,” he said. “There is also this mythology that housing costs are a big problem in Connecticut. When you lose jobs from Groton to Cambridge, Mass. it’s not because of housing.”
Carstensen said the incentive wouldn’t really help attract and keep jobs in the long run.
“None of these things says to the business community you can trust us. Connecticut has a long history of offering incentives and then withdrawing them or curtailing them,” Carstensen said.
Reynolds recognizes that the program does not address the larger problem.
“In the short term it will alleviate the symptom but we all understand it's not the solution,” he said. “Our solution is to build an economy for the 21st century.”
DECD’s Smith agreed that no single initiative would change the current dynamic. Rather she said it’s important to look at this program as a way to help convince young people to remain in Connecticut.
“In the long haul, it is an investment,” Crawford said. “We can't afford the continuing trend of the median age getting higher and higher. It's a serious problem to be able to keep younger people productive and give them positions that aren't available now.”
Under the program participants would apply to the DECD commission for a payment on their behalf for a down payment on the house. It must be for the purchase of their first home. Should the down payment be less than the monies set aside, the excess would go into the state’s general fund.
If someone leaves Connecticut within five years of graduation they must repay a percentage on the funds. If they move after the first year after graduation, they must repay all of it.
State Sen. Toni Boucher a Republican who represents Bethel, New Canaan, Redding, Ridgefield, Weston, Westport, and Wilton in the 26th Senate District is excited about the program.
“I love that!” Boucher said. “Years ago we put that out there but the leadership didn’t want it. More than ever we need to keep our 18 to 34 year olds here. They make use of our educational system and if they had an incentive to stay. I’m so supportive of it.”
Crawford also agreed, “we pay lip service to it, but what we really need to do is make it a priority.”