A lawsuit filed against the Connecticut Department of Housing and the Town of New Canaan by a housing developer questions how DOH officials determine whether a town has qualified for a moratorium from the state’s 8-30g statute, which allows affordable housing developers to take towns to court if they are denied a housing application by a local zoning commission barring significant health or safety concerns.

Plaintiff Arnold Karp of W.E. Partners and 751 Weed Street in New Canaan is appealing a 2024 declaratory ruling issued by DOH and claims the department improperly granted an affordable housing moratorium to the Town of New Canaan without requiring “proof of continuing affordability compliance,” and that some of the affordable units listed in the town’s moratorium application were improperly counted toward the moratorium. 

Karp had originally pushed for the declaratory ruling and was supported by the Connecticut Open Communities Alliance. Several of Karp’s affordable housing developments were rejected by the Town of New Canaan and he is seeking to overturn those rejections in court through the 8-30g process.

At issue is the town’s demolition of 82 housing units at Millport and Canaan Parish that previously counted toward the town’s affordable dwelling units on its “ten percent list,” and replacing those units with 100 new units. Under the affordable housing statute, municipalities that have reached a target of having 10 percent – the ten percent list – of their housing units deemed affordable by DOH are then exempt from 8-30g.

However, towns that haven’t reached that target goal can still be granted a four-year moratorium if they have added affordable housing units equaling 2 percent of their housing stock based on a point system measured in Housing Unit Equivalents (HUE).

The plaintiffs argue that because New Canaan demolished 88 affordable housing units, the town should have lost HUE points that counted toward the moratorium, and the moratorium should not have been granted. Instead, DOH awarded HUE points for all 100 new units. The plaintiffs then sought a declaratory ruling from DOH on how they monitor towns for affordability compliance in moratorium applications and when HUE points are deducted due to demolition.

DOH officials claimed in a declaratory ruling and in court seeking a dismissal that towns are responsible for certifying whether units count as affordable toward their moratorium application, and statutory requirements “do not include any reference to or requisite evidence of ongoing compliance,” and that statute “does not require DOH to second guess documentation submitted by a municipality.” 

DOH also determined that demolition of the Millport and Canaan Parish units did not warrant losing HUE points because they were built prior to 1995 and prior to the affordability statute being changed from using a formula based on area median income to one based on the lesser of area median income or state median income. 

Since New Canaan’s AMI was $60,000 higher than the SMI, and since those units were no longer deemed affordable under the updated statute, their demolition resulted in New Canaan losing zero HUE points. DOH also claims that prior inclusion of those units in the ten percent list is a “red herring,” because the ten percent list has nothing to do with the moratorium, and that the demolished units are to be assessed under the same affordability criteria as the new units.

“Plaintiffs incorrectly obfuscate the matter by arguing that the 10% list has anything to do with moratoria; the mechanisms – while related in subject matter – are manifestly distinct,” Assistant Attorney General Brian Tetreault wrote on behalf of DOH. “The wording of the statute requires DOH to calculate the HUE points for demolished dwelling units according to the same criteria used to calculate the HUE points for new units claimed as part of an application.”

The plaintiff’s, however, essentially claim that this is creating two standards for what counts as affordable housing; units constructed prior to the 1995 change are included on the ten percent list, but their demolition does not count against a moratorium.

“Thus, the Department ‘grandfathered’ these units, and the New Canaan continued to claim them as affordable units,” Timothy Hollister, attorney for the plaintiffs, wrote. “If the Department’s practice during the past 34 years had been to retroactively apply amended affordability standards to previously completed units, then every post-1990 substantive amendment to 8-30g affordability requirements would have required the Department to purge from the Ten Percent List of all no-longer-compliant unit. It has never done so.”

Connecticut’s 8-30g statute has long been criticized by municipalities, particularly affluent municipalities in Fairfield County, for allowing developers to essentially override a town veto on their building project if it meets the definition of affordable housing. Although the statute was passed thirty years ago and pitched as a solution to Connecticut’s housing issues, those issues remain and have been labeled a “crisis” by housing advocates who successfully pushed through a housing bill during a November 2025 special session.

That housing bill – House Bill 8002 – included changes to the 8-30g statute, including reducing the threshold by which a municipality qualifies for a moratorium if they create a “priority housing development zone” that covers at least ten percent of developable land and allows multifamily housing developments “as of right,” according to the bill analysis. 

HB 8002 also allows for extra HUE points toward a moratorium if a housing development was constructed “by, or in conjunction with, a neighboring municipality’s housing authority,” and instructs the Majority Leader’s Roundtable on Affordable Housing to study whether to change the exemption threshold for municipalities from ten percent of housing stock to a “flat numerical value,” or “an alternative model.” 

The percentage model used by the 8-30g statute often means municipalities have to build far more market-rate housing as well because developers try to offset their losses by designating 30 percent of their units as affordable and 70 percent at market rate, according to the Town of Greenwich. The municipality’s land use website claims that following the 30/70 model, it would have to construct 3,800 overall new units with 1,140 deemed affordable to reach the 10 percent mark.

The moratorium granted to New Canaan in 2024 was the second moratorium for the town; the first being awarded in 2017. In their brief, Attorney for New Canaan Nicholas R. Bamonte concurred with the DOH’s interpretation of state statute, and argued that the plaintiff’s “interests are economic, and speculative, at best.”

“The Town fulfilled all statutory and regulatory requirements for the issuance of the Moratorium, and DOH verified compliance based upon the plain language of the law and longstanding implementation by DOH,” Bamante wrote. “The statutory incentive of moratoria has significantly advanced the goal of increasing affordable housing, not only in New Canaan and Fairfield County, but across the state.”

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