It took a bit of elbow grease and some old-fashioned bargaining, but a proposed apartment development on New Salem Street won planning board approval on Tuesday night, along with a partial waiver of impact fees, in exchange for keeping some of the units affordable.
In an agreement negotiated on-the-fly during the meeting, KNM Holdings, the development entity planning to build 48 apartments at 77 and 97 New Salem, will rent-restrict four units to the state-defined workforce housing rate for 12 years. As an incentive to do so, the city will waive 80% of their assessed impact fees for the project.
It’s a small but significant win for city leaders, who have long grappled with a systemic problem relating to housing affordability and availability.
“Market rates have gone out of control — that’s not just my opinion, that’s the opinion right across the board,” Laconia Planning Board Chair Charlie St. Clair said. “It’s expensive to develop property, it’s very expensive, there’s a lot of money being thrown into it, but it doesn’t do us any good if nobody can afford to live there, and you end up getting somebody in there who’s just going to sublet it or do whatever they do.”
St. Clair also serves Laconia as a Democrat in the New Hampshire House of Representatives.
Planners received support in that direction from Mayor Andrew Hosmer, who attended the meeting and appealed for the inclusion of workforce housing during a period open to public comment, naming a significant shortage in available dwellings as one of Laconia’s most important long-term challenges.
Developers working to create a large number of units at the site of the old Friendly’s restaurant on Union Avenue agreed to deed-restrict 12 units to workforce housing rates for 35 years when moving through the planning process last year.
“I strongly encourage this planning board to consider the importance and the desperate need in this city for workforce housing. As you probably all know and are quite aware, the vacancy rate has hovered around 0% for an extended period of time — that’s for market-rate as well as anything that might be considered workforce or otherwise,” Hosmer said. “A healthy market has a 5% vacancy rate — we’re nowhere near that right now.
“Workforce housing means you take into consideration the average median income in this area, and then it’s based on a percentage of that income and rents are targeted within that percentage — could be 60% of AMI up to 110% or 120% of AMI,” Hosmer continued. “Average median income right now, by my last time I looked, is probably somewhere just under $70,000, so with two-bedroom units available for rental in this city approaching $2,000 or thereabout, plus utilities on top of that and any insurance someone might carry, that in my mind far exceeds the 30% or 40% of net income someone may make. It makes their housing significantly unstable when they’re paying out so much just to keep a roof over their head, or over their family’s head, and that’s what I would suggest might happen with a two-bedroom here.”
Planners posited the agreement, and following a brief recess for discussion between Ethan Wood, an attorney from Normandin, Cheney & O’Neil who’s representing KNM Holdings and developer Kevin Morrissette, Morrissette agreed.
“Deeded covenants for four units as workforce housing, as defined by state statute, for a minimum of 12 years must be provided to the planning department and recorded at the Belknap County Registry of Deeds at the applicant’s expense,” Planning Assistant Director Tyler Carmichael said.
Wood also told members of the planning board his client plans to significantly increase the amount of green space on the property, from about 25% to 38%, and requested a waiver to not include a drainage and watershed analysis with their application. Planners approved their request.
“It actually has less impact on drainage than it would otherwise, and that’s why we’re asking for the waiver,” Wood said. “The impervious surface is actually being reduced.”
Their plan includes 48 two-bedroom apartment units across eight buildings on the downtown parcel located across the street from Isaiah 61 Cafe and near the Laconia Police Department. The lot was formerly home to a Salvation Army thrift store.
“There were a number of existing commercial buildings and storage areas,” Wood said. “Those have been removed and what we’re proposing is the building of eight three-story, six-unit per-building, apartment buildings with two garages. This has been a change from some of the earlier plans that we discussed in conceptual review.”
At a meeting of the planning board in March, Morrissette’s conceptual presentation detailed the construction of 44 units of housing across 11 buildings there. Those units were likely to be rented out at market rate, as are the units included in the plan which won approval Tuesday night, other than the four which will be rent-restricted. The two-bedroom, one-bathroom units are planned for just over 1,000 square feet.
Wood said Tuesday a traffic study was conducted, and signaled the development would decrease traffic along New Salem Street.
After securing planning approval Tuesday, developers have until May 2030 to complete the project.
“We’re looking to start construction sooner rather than later,” Wood said.
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