It took just five years for rents in southeastern New Hampshire’s to become unrecognizable.
As recently as 2015, the median rent for two-bedroom apartments in Rockingham County hovered around $1,200 a month, according to data from the Residential Rent Cost Survey from the N.H. Housing Finance Authority.
By 2020, the median rent was up 28 percent to $1,600.
That leap — which was mirrored in other counties — underscores a decades-long problem that pre-dated the COVID-19 pandemic, experts say. New Hampshire rents have steadily increased, at about 20 percent overall since 2015, while housing stock has failed to keep pace, according to a report released by a statewide housing group this month.
“The housing market was tight pre-pandemic and the migration of new full-time residents to the state during the pandemic likely exacerbated the shortfall,” said the report, written by the Council on Housing Stability, which was created by Gov. Chris Sununu in November. “This migration has resulted in housing units that were rentals coming off the rental market, an increase of second home purchases, and an overall decrease of available units for rent or sale.”
The council has a basic solution: more housing units. According to the three-year strategic plan released by the council, towns and cities in the state must collectively build 13,500 new units by 2024 in order to create housing stability and ensure that “homelessness is rare, brief, and one-time.”
But getting there could require political muscle. While legislative efforts to encourage affordable housing have attracted bipartisan interest, opposition persists around the details. Moving major legislation across the finish line has had mixed results in recent years.
In 2020, a bipartisan group of lawmakers introduced an affordable housing bill they hoped would make a difference.
The bill, which had the support of Sununu and was built on the recommendations of a gubernatorial task force from 2019, aimed to help towns reduce local bureaucracy around housing development.
But it died as a result of the legislative process, after lawmakers missed a set of calendar deadlines due to the outbreak of COVID-19 in March 2020, and Republican members of the House voted against extending deadlines in June.
In 2021, the bill returned, this time to a Republican-led Legislature, only to be tabled on the House floor in February after Republican opponents said it needed work.
Next year, proponents of affordable housing legislation hope to finally close the gap. That means winning over skeptics in the GOP.
“The problem with affordable workforce housing hasn’t gone away,” said Rep. Joe Alexander, a Goffstown Republican and one of the prominent champions in his party for affordable housing. “I think it’s gotten worse. It’s been exacerbated, especially through this pandemic.
“This year we’re prepared to do a lot of education.”
The fate of HB 586
New Hampshire’s housing crisis is rooted not just in the shortage of affordable housing, but in the shortage of all housing units, experts say. Even as the economy has stayed strong, with low unemployment and a low poverty rate, the number of units has not increased to the same extent.
The result: high demand for housing and increasingly high rents. And because wages have not increased at the same pace as rents, fewer are able to afford the units that do exist. In order to afford the median two-bedroom apartment in the state, tenants need to earn $23 an hour, according to a 2020 study by the National Low Income Housing Coalition. It’s a high entry point that has squeezed some low-income workers into devoting more of their paychecks to rent — and others into homelessness outright.
House Bill 586 was supposed to help streamline the approval process for affordable housing units, and overcome local hurdles.
The bill required local planning boards to give specific findings for why they rejected a development in town, or risk the rejection being automatically overturned on appeal. It added new time limits under which the state superior courts and Supreme Court must consider and rule on a zoning board appeal.
The bill also sought to empower towns and cities to find ways to attract affordable housing developers. It allowed them to use “tax increment financing” districts, where municipal investments in a project are paid off using future property-tax revenues from the resulting development as a means to fund affordable housing. It gave towns the ability to dramatically expand the length of property tax credits awarded to a developer of residential units, from the current five years to nine, or up to 13 years for units that qualify as workforce housing.
And it expanded the definition of workforce housing to include people earning up to 120 percent of the federal poverty line, up from the current threshold of 100 percent, in an attempt to broaden the pool of tenants and entice more developers.
To Alexander and other supporters, some of whom were Republicans, the bill created the ideal approach to encouraging housing: cutting down on bureaucratic delay and adding voluntary incentives and tools. And the House Municipal and County Government Committee supported it, voting 15-3 to recommend the bill.
But some Republicans have strongly disagreed. In a speech in February just ahead of the vote to table HB 586, Rep. Barbara Griffin, the chairwoman of the House Election Law Committee, assailed the effort, telling her colleagues, “This bill needs work.”
“HB 586 is an attempt to address the affordable housing issue, but instead of focusing on costs, it changes and overrides the process that our communities and constituents have adopted for planning and zoning,” Griffin said, opposing the new regulations on planning boards.
Griffin argued against the expansion of property tax credits, which she said opened the door to “preferential access” for developers, “creating the potential for abuse.”
Minutes later, the vote to table the bill was 175-172, an unusually narrow outcome. Griffin did not return a request for comment.
As they regroup, supporters of local zoning reform are considering how to expand their campaign to win over House members on the fence. But some lawmakers are unlikely to budge.
Rep. Charles Melvin lives in Newton, a small town of 5,000 near the Massachusetts border. A town like Newton can’t support affordable housing, Melvin argues. Building a unit would only introduce more families and drive up costs in the local school district, which he predicted would not be recouped by the property taxes generated by the unit itself.
“To be honest with you, it’s almost impossible in a town like mine,” said Melvin, a Republican member of the House Municipal and County Government Committee and a former zoning board member in his town. Instead, Melvin says the burden of expanding the state’s housing stock should be picked up by cities.
And he argues there is no need for new laws; the housing market will sort itself out over time, he said.
“It’s all about supply and demand,” Melvin said.
But Melvin’s opposition to affordable housing extends beyond logistics, he said. It also includes the people involved.
“You do know that workforce housing is nothing but Section 8,” he said in an interview, referring to the U.S. Department of Housing and Urban Development program that allows landlords to receive federal subsidies for renting to low-income tenants. “It’s government subsidies to build them, and then the government turns around and subsidizes (the tenants), meaning that they pay 80 percent of the rent. So what you’re not doing is you’re not bringing the best of the best into the community.”
Advocates for housing have rejected that mindset, noting that expanding the state’s housing stock helps build the state’s population and economy, which is aging.
But the perspective is pervasive among some House Republicans, and it has animated many opponents to housing developments across the state.
Proponents of increasing housing are now trying to combat it.
To Rep. Jim Maggiore, a Republican and a member of the select and planning boards in North Hampton, attracting more people into the state is the entire point of the affordable housing effort. And high housing prices and rents are preventing that from happening effectively, he said.
“If we continue to let the market set the pace — a single-family home in some communities is almost $400,000,” Maggiore said.
Getting to the three-year goal of 13,500 housing units, meanwhile, is not going to happen through supply and demand alone, some lawmakers counter. “I don’t think it’s realistic,” Alexander said.
Republicans such as Alexander and Maggiore say the ideal approach to housing lies between imposing mandates or rent controls and doing nothing at all. The third way is to pass “enabling” legislation to allow towns to opt into the programs.
That means that smaller towns might not immediately jump into the effort, but they could have the availability to do so later.
“Enabling that (could mean) it works for city A, but it doesn’t work for town or hamlet or little subdivision B,” Maggiore said. “But you know if things change in 15 years, it’s still available.”
Maggiore also favors an approach that would enable towns to allow multiple family units on a single plot of land, provided that ample water and sewer connections were present. Melvin has fiercely opposed that effort.
“That’ll be a big drain on the school systems,” Melvin said.
As lawmakers quibble, affordable housing continues to attract support from Sununu.
In a letter introducing the council’s strategic plan, Sununu championed the three-year affordable housing proposal, adding that he looked forward to “collaborating with the council, the Legislature, state agencies, regional and local leadership, nonprofits, and businesses” to implement it.
“Housing stability is a significant challenge with an impact that reaches across the entire state, with vacancy rates in rental units near zero percent in some communities,” Sununu wrote.
Now, allies of the governor and supporters of affordable housing — including most Democrats — are rethinking their strategy for next year’s bill.
Throughout 2020 and 2021, the affordable housing bills have been expansive, tying together five to six ideas like zoning board reform and tax credit expansions into single pieces of legislation.
A better approach might be to narrow priorities, advancing one or two at a time, Alexander and Maggiore said.
“I don’t think we can eat the whole apple in one bite,” Maggiore said. “I think we need to take smaller steps.”
The proponents are also hoping to talk to lawmakers, educating them on how widespread the housing problem is.
“I think part of the problem is that there’s not enough young people in the Legislature to highlight the fact that it’s an issue,” Alexander said. “I have so many friends that, you know, get kicked out (of apartments), or need to find a place in a heartbeat. I look on the town Facebook page and every couple days there’s somebody that’s looking for an apartment in Goffstown, and it’s like, there’s nowhere.”
Despite the setbacks, lawmakers are optimistic that the underlying goal — combating an unhealthy housing market — commands broad enough support to bring success.
“This issue is not as polarizing as so many other issues,” Maggiore said. “So we can grab people from all the way out to all the way in the middle to at least be able to present things on housing that they’ll be willing to accept. That they’d be willing to learn about.”
“I think there’s real opportunity coming up in this next session for that,” he said.