With a new budget-conscious administration in Concord and a new cut-the-spending-at-all-costs administration in Washington, D.C., real estate professionals wonder what might happen with the progress New Hampshire has made toward resolving its housing crisis.
Will housing programs — as a result of less likely help from state and federal funding — be taking one step forward, two steps back? Two steps forward, one step back? Any steps forward?
The questions come as several significant factors have arisen in recent days relative to housing, including:
- Prices in New Hampshire continue their months’ long trend of ranging at a median of half a million dollars or more.
- A new poll shows housing is the No. 1 concern among New Hampshire residents.
- A new report ties lack of housing to the state’s economy, saying it “creates challenges to Granite Staters’ well-being. These challenges include slower economic growth, increased strain on family resources and loss of housing entirely.”
- The governor signed a bill she says will encourage more housing.
“There’s a lot of noise, right? There’s a lot of stuff happening, and a lot being said and written about it, and so it’s sort of tempting to focus on that as the sort of driving factors of where we’re headed in the long term,” said Rob Dapice, director of the NH Housing and Finance Agency.
He is optimistic about where housing is headed in the state, drawing some confidence in the widespread attention centered on the issue, particularly when it comes to easing local zoning barriers that have stunted housing growth.
“Local zoning and regulatory barriers are a key driver of it, and we need to make change in both the state and local level in order to move the needle on housing supply. I don’t think that we’ve ever been any more ready to make change in those areas as we are now,” he said.
Susan Cole, the president of the New Hampshire Association of Realtors (NHAR), said government funding alone won’t “adequately address the enormous lack of housing inventory in New Hampshire, especially in the single-family home market.”
“Yes,” she added, “state expenditures for housing development are critical in the below-market rental market, and fewer state dollars will mean fewer such developments, but the only real way out of our affordable housing shortage is to empower private property owners to utilize their own land to the highest and best use to meet the market’s need.”
The federal government provides a variety of financial support for state and local housing programs, including Community Development Block Grants, HOME Investment Partnerships, Housing Trust Fund, and Low-Income Housing Tax Credit. The state’s Housing Finance Authority receives federal money for all these programs.
From the state, the current biennium budget, which expires June 30, has provided $25 million towards the Affordable Housing Fund, $10 million for the InvestNH Fund, $10 million for homelessness and housing shelter programs, and $5.25 million for the Housing Champion Designation and Grant Program.
Only the homelessness and housing shelter programs are being advanced in the new budget being proposed by Gov. Kelly Ayotte with another $10 million for the biennial that starts July 1.
On the federal level, the Trump administration has ordered a freeze on Housing and Urban Development (HUD) including Section 8 Housing Choice Vouchers; Project-Based Rental Assistance; Homeless Assistance Grants; Public Housing Operating and Capital Funds; HOME Investment Partnerships Program; Community Development Block Grants; Section 811 Housing for Persons with Disabilities; Section 202 Housing for the Elderly; Housing for Persons with AIDS; Fair Housing; Housing Counseling; Eviction Prevention Grants; the national Housing Trust Fund and others.
How this will play out in the long run remains to be seen, as a new budget makes it way through the U.S. Congress.
A Center on Budget and Policy Priorities statement says, “This year’s funding proposals from House Republicans are insufficient to protect rental assistance for hundreds of thousands of people. Other Republican proposals would impose harmful changes such as rent hikes and inflexible work requirements and undercut community efforts to reduce homelessness and housing discrimination.”
Dapice is looking to Congress to keep up with support of federally backed housing initiatives.
“A lot of the most important sort of housing incentive programs are funded through the tax code, and so it’s really important that Congress continue to support and strengthen the Low Income Housing Tax Credit and the tax-exempt bond programs,” he said. “If they eliminated or weakened either of those programs, which have been huge successes over the last 40 years, it would really be very detrimental to the work that we and our partners do in New Hampshire.”
Among state policymaking, he supports efforts of state Sen. Dan Innis, R-Bradford, and his legislation — SB 81 — to increase the amount of Real Estate Transfer Tax revenue that is transferred to the Affordable Housing Fund, and sends $25 million from the General Fund of all tax dollars to the Affordable Housing Fund.
As it moves through the Legislature, it will have to square up somehow with the governor’s budget and gain acceptance from Ayotte, or face her veto, which would then set up a possible override.
“I think a lot will get hashed out between the House and the Senate, with, obviously, the governor’s budget a factor there as well,” said Dapice. “Long term, I think there’s been a mindset shift and a recognition that the state has a role to play here in providing this kind of affordable housing, And that’s important, but this is a tough budget, no question about it.”
For Cole, owner/broker of Susan Cole Realty Group in Lebanon, if funding isn’t forthcoming from the state, it’s up to the private sector.
“If the state budget is unable to find dollars for housing development, it’s even more critical that the Legislature finds ways to ensure local communities are not blocking new housing,” she said. “The private sector can meet the challenge, but not if local governments are erecting expensive, unnecessary barriers. ‘Home’ should not be thought of as a four-letter word in communities, but unfortunately some planning boards have made it one.”
A University of New Hampshire Survey Center poll from Feb. 24 identifies housing as the state’s most important problem.
According to the survey center, 29% of responding residents said housing was at the top of their list of concerns, followed by taxes (10%), education (8%), drugs/addiction (7%), jobs/economy (7%) and others.
As of today, the median price of a single-family home in New Hampshire stands at $509,000, according to the NHAR’s latest data from February. The median price of a house hit the $500,000 threshold in March 2024 and hasn’t looked back since.
While the NHAR, NH Housing and others continue to press the Legislature for laws that ease restrictive zoning, some municipalities are pushing back.
Todd Selig, administrator for the Town of Durham, testified in Feb. 18 against HB 457, which would prohibit local zoning laws that restrict the number of occupants of a dwelling unit to fewer than two occupants per bedroom. This bill also prohibits zoning laws that restrict occupants based on familial status (e.g., only so many unrelated people living in the same house).
In his comments before the Housing Committee, Selig said managing the commercial use of off campus student housing is a fundamental and overarching issue in Durham, as it is in college towns such as Plymouth, Keene, Hanover, New London and Rindge.
He noted that college communities manage density and use within non-family commercial college student housing through local zoning that limits occupancy in ways the bill seeks to remove.
“It was a difficult hearing,” Selig observed in his Friday Update to Durham residents on Feb. 21. “The majority of the committee appeared negatively disposed toward singling out college student commercial rentals in any way through local zoning in Durham or elsewhere.”
The new report that ties housing to the economy comes from the New Hampshire Fiscal Policy Institute, written by Nicole Heller, senior policy analyst.
The report reiterated long-held reasons for the current crisis: shrinking supply, leading to high demand and rising prices.
Heller cited a number of factors that contribute to the limited supply, including demographics — population growth puts a strain on housing stock.
New housing construction slowed significantly between the early 2000s and 2010. While it started picking up again, said Heller, “The decrease in construction during this time frame reduced the number of available housing units despite consistent population growth in the state during the same period.”
According to Heller, some municipalities may resist additional housing units, particularly multifamily units, based on the unsupported claim that the additional housing will result in more children in the local schools and subsequent impacts on local taxes.
The number of vacation homes, and in particular the number of short-term rental properties, further dampens availability. With short-term rentals, according to Heller, possible long-lease housing is removed from the market.
All the factors add up to making homes more scarce and less affordable, according to the NHFPI report. Per NHAR data, the affordability index started the year at 59, meaning that the median household income is just 59% of what is necessary to qualify for the median-priced home here.
“Without additional investments and enhanced understanding of effective and sustainable polices that support housing access, more New Hampshire residents may struggle to afford to live, work and thrive in the Granite State,” said Heller.
The first bill that Gov. Kelly Ayotte signed as the state’s newest governor is one she says will help address the housing shortage.
On Feb. 27, she signed SB 4, which creates a commercial property-assigned clean energy and resiliency (C-PACER) program in New Hampshire. It is a voluntary program that developers can use to finance energy-efficient upgrades, building insulation, cost-effective renewable energy and water conservation measures. Eligible projects include manufacturing facilities, office buildings, retail buildings and multifamily housing projects. Financing comes from private-sector loans made by private capital providers and repaid through a voluntary property tax assessment on the developed property.
“By making it easier for private-sector partners to finance projects and removing the administrative burden on municipalities, we’re taking an important step in the right direction to increase the supply of attainable housing for our growing workforce,” Ayotte said in signing the bill.
