A preliminary concept for a housing development in Rindge ignited a fierce debate among some residents this past week: Do we need or want more housing?
It’s a schism that’s splitting several area towns, where some longtime residents or transplants from larger cities feel the rural character is threatened by heavy construction and dense development. But resistance to such projects continues to stifle a rental housing market with dangerously low supply, further driving up prices.
In a private Facebook group for Rindge residents, a member posted Wednesday morning about a conceptual plan that was presented to the planning board Tuesday night. Navian Development Co. had shown early designs for a proposed 66-unit housing complex on Route 119. At least a portion of that would be workforce housing, another term for affordable.
No formal plans have been submitted to the town, but the Facebook post garnered nearly 200 comments in less than two days.
Supporters argued that young people and families need affordable rental units, either as an alternative to or a step before home ownership. One woman wrote that her teenage son will want to move out soon but won’t have many options if he wants to stay in the area.
Others countered that they appreciate the quiet and quaint atmosphere and said any major housing complex would bring the big-city qualities of more people, more businesses and more construction.
Rindge isn’t alone. In Peterborough, litigation continues over a zoning amendment voted on at this year’s town meeting that would’ve repealed measures to allow denser development.
And a workforce housing development in Walpole hasn’t gone up without a fight: In its early stages, Avanru Development Group faced a lawsuit from residents who accused the company of tricking the planning board when plans changed from senior to workforce housing. A judge disagreed, and the project continued.
Will Stewart, the executive director of Stay Work Play N.H., a nonprofit agency with the mission of attracting and retaining more young people, underscored the need for affordable housing across the state, but said these debates have to be resolved first.
“Every community needs to decide for itself what its priorities are.”
A case of supply and demand
In its Out of Reach 2019 report, the National Low Income Housing Coalition ranked New Hampshire as having the 12th highest “housing wage,” calculating that renters would have to earn $23.23 an hour working full-time to afford a two-bedroom home. Renters in the Granite State make an average of $15.63 an hour, according to the coalition’s data, and only $12.63 an hour in Cheshire County.
Fair market rent — a measure of how much a property in an area rents for, which is calculated annually by HUD and includes essential utilities, such as electric and gas — for a one-bedroom apartment in Cheshire County is $841 and jumps to $1,096 for a two-bedroom place.
The high cost of rent in New Hampshire is a function of supply and demand, according to Dean Christon, the executive director of N.H. Housing Finance Authority, an organization that helps fund affordable housing projects across the state.
There’s an increased demand for rental housing across the country, Christon said: Millennials are buying their first homes later in life, seniors are downsizing and some people experiencing “recession trauma” are avoiding the hassle of a mortgage outright.
While these trends are happening nationally, New Hampshire’s low housing stock forces prices up, he said. Though people might cite the state’s high property taxes, Christon said the taxes passed down to tenants don’t influence rental rates significantly enough to explain the current market.
A better indicator is the rental vacancy rate, which should be around 5 percent in a balanced market, according to N.H. Housing. Census data put the nationwide vacancy rate for the second quarter of this year at 6.8 percent, and most New England states are near 5 percent.
In N.H. Housing’s annual residential rental cost survey, the agency calculated the state’s 2019 vacancy rate at less than 1 percent.
To explain why there aren’t enough rental units, Christon pointed to New Hampshire’s core of rural communities, which value home ownership and haven’t traditionally encouraged the development of rental properties.
There are other factors, he added, such as the labor market and materials increasing construction costs, and state and local regulatory processes don’t often favor large-scale projects.
“And so we have simply a deficit of rental housing that circles back to that supply-and-demand thing,” he said.
Building apartment complexes and multi-family residences would seem to be the answer, though Christon underscored the importance of diversifying new housing stock.
“If we simply built more market-rate rental housing, if we had enough supply, it would begin to mitigate the upward pressure on prices,” he said. “... At the same time, there’s always going to be a need for housing that targets individuals at the lower end of the economic spectrum.”
Although the term “affordable” is used broadly and can be confusing, he said, there are general definitions and guidelines. N.H. Housing targets people who earn 60 percent or less of the state or area median income, depending on the program, but its services aren’t closed off to others.
The U.S. Department of Housing and Urban Development’s website says affordable housing should cost less than 30 percent of a person’s income.
Looking for answers
Other organizations in the state are stepping up to help find solutions.
About a year and a half ago, Stay Work Play N.H. commissioned a survey to find out why people between 20 and 40 wanted to leave or stay in the state.
“One of the big factors that came back was that of housing affordability,” Stewart, the executive director, said. “It’s just expensive to live here. It’s expensive to find housing here, both on the renting side and on the home ownership side.”
Housing is generally a hefty expense for young adults, he said, and that’s exacerbated by other problems in New Hampshire, such as higher-than-average student debt and a lack of public transportation, which nearly mandates a car payment.
This combination of circumstances leads to high costs for a young person to live in the state, Stewart said, which conflicts with the narrative that New Hampshire wants to attract that demographic.
As part of its advocacy efforts, Stay Work Play supported and lobbied for a bill signed into law this year that established a commission to study the barriers to increased density of land development.
Stewart said local zoning codes often restrict development to one resident per acre or half-acre. Since large lot sizes mean more costs for the developer, it’s not economical to use that much land to build something that’s both small and affordable for a tenant, he said.
Changing zoning codes to allow for denser development could encourage more rental unit construction.
Stay Work Play advocates for affordable housing in its goal of attracting young people to the state, but at least one economist stresses a different method.
Brian Gottlob, recently named the director of the N.H. Economic and Labor Market Information Bureau, said young people in general are looking for quality housing — the biggest bang for their buck.
In Keene, two high-end apartment complexes have neared completion around the same time. Christon guessed that any new developments in the area would fill quickly, given the low vacancy rate, and so far that seems to be the case.
About half the 135 units in the Washington Park Residences opened for leasing a few weeks ago, project manager Tony Marcotte said, and the remainder should be ready later this fall. The company has rented out five to seven per week, he said, despite having no advertisement aside from a posting on apartments.com. On the site, the apartments range from $1,372 to $2,133.
The Colony Mill Apartments on West Street comprise 89 units, most of which have two bedrooms. Prices range from $1,300 per month for the studios to a maximum of $2,550 per month for the three-bedroom units. An open house is slated for later this month, but there are already 200 people on a waiting list, according to marketing manager Holly Ackerson.
Simply having enough of these types of rental units is no guarantee of attracting young people, Gottlob clarified. Other factors can come into play as well, such as whether there’s a lively downtown or another hub of activity. But there’s a clear correlation, he added: Cities and towns with more high-quality rental units have more young people.
Many of the Facebook comments by Rindge residents this week raised concerns that any new housing development would hike taxes, particularly by adding more children to the school system. Gottlob disagreed, noting that rental properties typically have few kids per unit, especially when compared to single-family homes.
By “young people,” Gottlob said he’s usually referring to 25- to 35-year-olds — people who are starting their careers and statistically likely to spend more money in their local economies.
“That type of demographic will be important to sustaining the businesses, the local businesses, in a region, in a community,” he said.
The share of Granite Staters 20 to 34 years old has continually decreased, however; from a quarter of the population in 1990 to 17.4 percent in 2010, according to U.S. Census Bureau data.
Meanwhile, older residents have gained more ground. The state’s median age spiked from 33 in 1990 to 41 two decades later, and five-year estimates put the 2017 median age at nearly 43. More than half the state is older than 35, with the 65-and-older crowd counting for 16.5 percent of the population in 2017, according to five-year estimates.
Gottlob emphasized that communities have to determine what their values are. A population that isn’t diverse in age can mean fewer opportunities for local businesses and a less vibrant downtown, though he noted that that’s not what everyone wants.
But there can also be consequences to not looking to the future, he added, and despite the convictions held by residents who want to see their town stay as it always has, Gottlob said that may not be possible.
“A community is never in stasis. It’s never not moving either up or down,” he said. “… It needs to either be moving forward or it’s probably going to be, at least very slowly, in some sort of decline.”