A burgeoning state program to incentivize progressive zoning could make a significant impact on the development of workforce housing in the state, officials with the Department of Business and Economic Affairs hope.
City councilors learned details about the Housing Champion designation program, which makes municipalities of all sizes eligible for preferential grant opportunities, from BEA and InvestNH representatives Andrew Dorsett and Lee Ann Moynihan at their meeting Monday night.
At the Sept. 23 meeting of the council, an agenda item which would have communicated support from the council to the planning department to begin the initial stages of the program application was declined after a significant show of public opposition. Representatives of InvestNH and the BEA appeared Monday night to dispel misunderstandings about the program and answer questions.
The Housing Champion designation is intended to target specifically an acute lack of workforce housing across the Granite State. According to state law, workforce housing is defined as units for rent that are affordable to an individual making 60% of area median income, which varies from municipality to municipality. To be considered workforce housing, a unit must charge no more than 30% of the 60% cap in monthly rent. The AMI for Belknap County was $107,000, according to census tract data.
State data illustrates the need for housing. According to the housing needs assessment produced by New Hampshire Housing and Finance Authority in 2023, Belknap and Carroll counties experienced the highest level of proportional population growth in the state through the 1990s.
Within Belknap County, the state noted 9,093 jobs in Laconia and 7,600 workers. Of jobs in Laconia, 74% were filled by commuters and the ratio of jobs to housing units was less than 1. In Belknap County, more than 80% of vacant units were available seasonally. In Belknap County in 2020, there were nearly 12,000 vacant units of housing for seasonal or recreational use and just 286 others available for rent and 188 listed for sale, about 25 times as many available seasonal as year-round.
The housing stock in Belknap County is dominated by single-family detached structures at a rate of 72% and between 2010 and 2020, approved permits for single-family structures surpassed multi-family structures by almost three times. There exists a large discrepancy in income between those in Belknap County purchasing an investment property versus those purchasing a primary residence, with those searching for primary residence maintaining median incomes 109 times lower. Out-of-state home buyers also pay $75,000 more, on average, than locals.
The Housing Champion designation uses a points system to determine if individual municipalities qualify. Municipalities which do qualify are able to apply for grants to use at their own discretion. The state legislature allocated $5 million to the program and its first deadline is Friday, Nov. 15. Achieving the designation makes municipalities eligible for funding opportunities.
“This is targeted directly at municipalities,” Moynihan said. “All the grant money goes directly to municipalities, there’s no developers getting these funds.”
According to a report published by New Hampshire Housing, there was a need for over 23,000 new units to meet existing demand, 60,000 by 2030 and 90,000 by 2040. Dorsett told councilors that a housing needs assessment indicated about a 0.02% vacancy rate statewide and noted a vacancy rate of 3-5% is considered healthy.
“It’s a broad problem throughout the entire state,” Dorsett said, adding the economy is straddled by the lack of housing as businesses lose potential employees who can’t find a place to live. “There’s a need for all types of housing.”
In order to qualify, cities must earn 40 points across multiple categories that evaluate the state of their zoning ordinance, among other details. Zoning ordinance revisions may or may not be necessary, depending on the specific language.
The Housing Champion designation includes four grant programs. The Housing Opportunity Planning grant program, largely to assist the city in updating its master plan, received council support in applying at the last meeting Oct. 15; the per-unit program would provide the city with $10,000 per unit of affordable housing; infrastructure grants would support new construction or capacity increases and could encompass water, sewer, communications or transportation projects; and a loan grant program which hasn’t started yet.
The designation lasts for three years before the city would have to enter a review process in order to renew their participation.
“The Housing Champion is a voluntary program, it’s very important to know this is nothing mandated,” Dorsett said. “It is a voluntary program for municipalities and it encourages zoning reform for housing. The state realizes that in order to solve this housing crisis that they need to partner with these municipalities to bring housing to their communities in whatever form that community feels fits and is right for them.”
At the council meeting, City Planner Rob Mora told councilors there are few changes needed in order for Laconia to qualify for the designation, primarily limited to technical changes in the language of some of their zoning ordinances.
“We’re really very close,” Mora said, noting a few minor changes and added definitions are needed. “Laconia is well overdue a rewrite on ordinances.”
Local control of zoning is maintained throughout the process of qualification. There are no mandatory aspects of the designation, cities and towns are able to pick and choose which zoning ordinances they’re willing to adopt or to revise in order to meet the requirements to earn points in the various categories.
“It allows local control, it’s not a one-size-fits-all type of designation,” Moynihan said. “The way it was established is the towns can look at the designation requirements and choose what they would like to change or where they already fit in.”
Many ordinances may already meet the requirements and would not need to be changed at all.
“Housing Champion designation strikes me as, like, you’re on a Major League Baseball roster. You’ve still got to get up and try to get a hit,” Mayor Andrew Hosmer said. “But if you’re not on the roster, you’ve got no chance of going to the plate.”
“And the sooner you get on the roster, the sooner you get in the game,” Moynihan said.
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