Keene’s property taxpayers are footing the bill for skyrocketing welfare costs amid high demand for help, rent hikes and waning federal support.
New Hampshire law requires towns and cities to provide financial assistance to those unable to meet basic needs such as food, rent, shelter, utilities, prescriptions and funeral expenses.
Housing assistance is the biggest category of need, Keene Human Services Manager Natalie Darcy said in an interview Thursday.
In 2019, the city paid $238,656, or an average of $19,888 per month, to help people cover their rent or pay for an emergency motel room if they didn’t have a place to stay.
These costs increased nearly 400 percent by the 2024 fiscal year, which ended June 30, reaching $1,158,120, or an average of $96,510 per month.
With the cold season just starting, this expense has hit $309,045 for the first five months of the current fiscal year, July 1 through Nov. 30.
Federal rental assistance under the American Rescue Plan Act was available starting in March 2021. But those funds ran out in June 2023, causing local costs to accelerate, Darcy said.
Todd Marsh, president of the N.H. Local Welfare Administrators Association and Rochester’s welfare director, said Keene’s experience is similar to that of towns and cities across the state.
The federal assistance ended after a couple years of serious increases in the price of housing. The double whammy caused local welfare costs to spike. Local costs have begun to moderate, but they remain well above pre-pandemic levels, Marsh said.
Before it ended, the federal rental assistance program provided more than $302 million across New Hampshire, including nearly $10 million in Cheshire County, and more than $7 million in Sullivan County.
Darcy, Keene’s human services manager, fields requests for help from the public every day.
“We have been bombarded with people this year,” said Darcy, who has worked in the city’s welfare department for 16 years. “I’ve never seen it as busy as it is right now.
“We’re kind of between a rock and a hard place. We don’t want to overspend city taxpayer money, but on the other hand, we have to assist people as part of the law.”
Lack of affordable housing is a key problem, and people with a poor credit score or without good references may have trouble securing a rental even if they can find one that fits their budget, she said.
Beth Daniels, chief executive officer at Southwestern Community Services, said some of the people her nonprofit helps with emergency housing have jobs but not enough income to afford an apartment.
Property owners raised rents significantly over the past several years, she said.
“Some landlords decided to sell their property or maybe they did some rehab work and decided they were going to be renting to a different income level,” Daniels said.
“Or they just decided to increase rents, and that could be for a variety of reasons. They themselves were experiencing inflation.”
In its 2024 Annual Report, N.H. Housing, a nonprofit that finances residential construction, said only 13 percent of two-bedroom apartment units are affordable to the median-income renter.
The organization’s 2024 Residential Rental Cost Survey Report said the median cost of a two-bedroom unit in Cheshire County this year was $1,455, up 30 percent since 2019.
Robert Dapice, chief executive officer of N.H. Housing, said New Hampshire needs to build more homes and apartments to make up for years in which such construction was discouraged by restrictive local zoning ordinances.
With limited housing supplies and strong demands, prices have risen greatly in recent years, he said.
“A lot of people sort of see homelessness and housing insecurity as the product of personal failings, but I think more and more people are now realizing there are structural problems here that are driving up the cost of housing,” Dapice said.
“In fact there’s been a lot of research that higher levels of drug addiction and mental illness do not correlate with higher levels of homelessness. The one thing that does correlate is higher cost of housing.”
The state has an emergency assistance phone number 2-1-1, which is staffed around the clock and is a point of entry for people needing housing assistance.
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