NH Statehouse

State representatives have again indicated strong bipartisan support for legislation aimed at encouraging the creation of more affordable housing in New Hampshire.

The House Municipal and County Government Committee voted 15–3 last week to recommend House Bill 586, which Gov. Chris Sununu endorsed in a Feb. 1 letter to the committee, for passage by the full House.

The bill would direct communities to offer zoning and tax incentives for workforce-housing developments — units with rent no greater than 30 percent of the area median income for a family of four — and would provide voluntary training to local officials who make housing-related decisions.

HB 586 includes elements from two pieces of legislation that drew bipartisan support last year but were never enacted. Those bills fell victim to the COVID-shortened legislative session and budgetary challenges amid the pandemic.

Calling the lack of affordable housing in New Hampshire a “crisis,” state Rep. Marjorie Porter, a Hillsboro Democrat whose district includes Antrim, said low rental vacancy rates have inflated housing demand and led to higher costs.

New Hampshire had a rental vacancy rate of 1.8 percent last year, according to the independent state agency N.H. Housing — well below the 4 to 5 percent that housing experts consider healthy. (In Cheshire County, the vacancy rate was 1.9 percent.) In a separate report, N.H. Housing estimated that the state would need to add 20,000 units to create a more balanced market.

Porter, the ranking Democrat on the Municipal and County Government Committee, said HB 586 stems from a set of policy recommendations that a state task force on housing made in 2019. The panel, which Sununu convened earlier that year, sought to address a concern that Granite State businesses were struggling to recruit and retain employees due to a lack of housing options.

“Young people want to come and settle, but they can’t find any place to live that they can afford,” Porter said.

Housing Action N.H. Director Elissa Margolin said the latest legislation represents the “low-hanging fruit” from the task force’s recommendations, which also included creating a tax deduction for business profits that landlords collect from certain workforce housing.

“The lack of affordable housing in our state was front and center because it was one of the weak points in an otherwise strong economy,” she said.

Margolin said Housing Action N.H., a policy group made up of developers, housing providers and tenant advocates, calls HB 586 a “community toolbox bill” because it focuses on local solutions to the state’s housing shortage, like expanding existing municipal policies and educating community leaders, rather than creating a statewide approach.

One of its provisions would require municipalities to make local zoning incentives already in place for senior housing — like easing density restrictions and expedited approval processes — available for workforce housing developments, as well.

Others would double the intervals during which residential developers can claim tax relief — to four years for any new development and to eight years for new workforce housing — and would authorize subsidizing new workforce housing in certain "revitalization" districts, though Porter said that would need approval from local residents.

Jack Franks, president and CEO of Avanru Development Group, said he supports HB 586 as a “good first step” for addressing the state’s housing shortage. He said developers like Avanru — a Walpole company that built affordable apartments in that town and has proposed developments for senior and workforce housing in Swanzey — are often stymied by density restrictions that cap the number of units allowed on a certain property, some of which could be bypassed under the proposed legislation. (Swanzey's zoning board asked the N.H. Supreme Court last month to resolve a dispute over one of Avanru's proposed apartment buildings.)  

“A lot of the local zoning ordinances were put in place to discourage growth,” he said. “This would give townships and municipalities more flexibility in creating [revitalization] districts that would allow for an easier path to a development being granted building permits.”

HB 586 would also offer voluntary training for local planning and zoning board members that had previously been available only during a member’s first year in office. Provided by the N.H. Office of Strategic Initiatives, the training would cover the procedures and regulations relevant to that person’s board.

Noting that many planning and zoning board members are appointed volunteers, rather than housing professionals, Margolin said the training would help familiarize them with important statutes, like the state’s Workforce Housing Law. She said affordable units often get built when the developer takes time to educate and work with local leaders before pitching a project.

“I think generally as people get more knowledgeable, they’ll be more welcome to affordable housing proposals,” she said.

The training provision drew criticism from some lawmakers last year because an initial draft of the legislation, then known as HB 1629, required board members to attend the instructional session and pass a test before voting on housing-related matters. The bill was later amended to make the training optional.

Porter said the three Municipal and County Government Committee members who voted against recommending HB 586 for passage, all Republicans, did so after hearing from local officials in two Granite State communities who feel the bill is too restrictive. Lawmakers worked with housing advocates and community leaders, including the N.H. Municipal Association, to make it as flexible as possible, she said.

“If a community doesn’t want to [create zoning incentives for workforce housing], then they can just take away the offer for the senior communities,” she said. “People don’t want workforce housing in their communities because there’s a misconception that … it’s low-income housing. They envision the projects in the cities.”

Despite that opposition, Porter expressed confidence that the legislation will pass the House and the Senate with bipartisan support this session, noting that it was introduced by Rep. Joe Alexander, a Goffstown Republican. Lawmakers of each party in both chambers have also sponsored the bill.

“The fact that both Democrats and Republicans are on board with it, and that we were able to work together to … [meet] objections that had been raised about it, I think is a good thing,” Porter said.

The House will likely vote on HB 586 at its in-person session next week, she said Thursday, though the bill would go to another House committee and then again need approval from the full body before moving to the Senate.

If passed, Sununu has indicated that he would sign the bill into law. In his Feb. 1 letter to the Municipal and County Government Committee, he called it “one of the best opportunities in years to advance New Hampshire's housing situation in a substantive, bipartisan way.”

“House Bill 586 embraces our traditions of local control and individual property rights, empowering municipalities to help attract the workforce that makes our economy thrive,” Sununu wrote.

Margolin said she, too, is optimistic that the legislation will succeed.

She added, however, that addressing the lack of affordable housing in New Hampshire requires cultural change, in addition to new policy. Acknowledging many Granite Staters’ concerns that adding homes would prevent the state from preserving its rural character and natural environment, Margolin argued that the two causes can coexist.

“We have proven that you can have affordable housing and do all of that,” she said. “But we need to get that in the cultural ethos of our state.”

Caleb Symons can be reached at 352-1234, extension 1420, or csymons@keenesentinel.com. Follow him on Twitter @CalebSymonsKS.