A developer's lawsuit challenging New Canaan's affordable housing moratorium directly tests the legal strategy Greenwich and neighboring towns have embraced to slow state-mandated housing growth.

GHF Parade Hill Road LLC, the legal entity behind the Garden Homes Fund, filed a complaint in Connecticut Superior Court after the New Canaan Planning & Zoning Commission unanimously rejected its plan to build 14 apartments at 30 Parade Hill Road in New Canaan. The commission voted June 23 to deny the application, finding the project did not qualify as "assisted housing" under Connecticut's affordable housing statute, known as 8-30g.

The distinction matters.

Under 8-30g, a project that qualifies as "assisted housing" can bypass a town's moratorium even while that moratorium is in effect. New Canaan, like Greenwich, has been actively pushing back against state housing mandates.

The proposed building would include 11 affordable units: five restricted to households earning no more than 50% of the area median income (AMI) and six restricted to no more than 80% AMI. Three units would be market-rate. The development would house families with children experiencing homelessness or housing insecurity, according to the complaint.

The developer argues the project meets two separate definitions of assisted housing: the state Department of Revenue Services approved it for a sales-and-use tax exemption for low- and moderate-income housing, and five of the 14 apartments would be reserved for households receiving rental assistance through tenant-based vouchers, Greenwich Time reported. Either circumstance, the complaint contends, independently qualifies the project under state law.

The commission disagreed. In its written denial, the New Canaan P&Z stated that no governmental entity had made a binding commitment to provide rental assistance to the development and called the voucher claim speculative and unsupported by any binding government commitment.

The lawsuit also alleges the commission adopted an overly narrow reading of the statute by imposing requirements not found in the law, including requiring government financial assistance be paid directly to the developer.

The case has direct implications for Greenwich. First Selectman Fred Camillo held a press conference at Greenwich Town Hall on July 24 with a bipartisan group of officials, including New Canaan First Selectman Dionna Carlson, calling for a statewide moratorium on zoning mandates. "I'm calling on the legislature, the state legislature, and Gov. [Ned] Lamont to put the brakes on the mandates," Camillo said at the July 24 press conference, according to Patch.

If a court rules that the "assisted housing" exemption applies to projects like the one on Parade Hill Road, towns that have earned moratoriums under 8-30g could still face development applications they cannot deny. Greenwich's own land use records estimate the town would need roughly 3,800 new housing units, including 1,140 affordable ones, to reach the 10% threshold for a full exemption from 8-30g, according to Inside Investigator.

The proposal drew opposition in New Canaan. More than a dozen residents spoke against it at a March 31 public hearing, and the town received more than 45 letters opposing the project. Concerns included traffic, density, sewer capacity and limited road visibility along Parade Hill Road.

In a Sept. 3 court order, a judge said the case would remain active while documents are under review. Attorney Amy Souchuns of Milford-based MacDermid, Reynolds & Glissman filed the complaint on behalf of the developer. No next court date has been announced. Greenwich's Affordable Housing Trust Fund Board meets Wednesday, Sept. 16.