Belknap County has a severe lack of availability of affordable rental units, according to a report published earlier this year by New Hampshire Housing Finance Authority.
The report, which surveyed over 18,000 units priced at market rate, meaning they are not subsidized, indicates a continued trend of the cost for available rental units continuing to rise, straining affordability. Across the state, the average income required to afford a 2-bedroom apartment is $73,300, more than 150% higher than the median income among Granite Staters. Just 13% of available 2-bedroom rentals meet the state’s definition of “affordable.”
About half of the units included in the report were 2-bedroom units, about a third were 1-bedroom units, 16% were 3-bedroom units and no-bedroom and 4-bedroom units made up 4% each of the total.
In 2024, in Belknap County, the median monthly rent for a 2-bedroom was $1,521, 44% higher than in 2019. Prices in Belknap were slightly lower, however, compared with the statewide average of $1,833 and statewide increase of 36% between 2019 and 2024. In nearby Merrimack County, average rent was slightly higher than in Belknap at $1,551, a 29% increase over the same period.
The housing authority postulates the increase in rental costs reflect a tight housing market, where high demand for rental units limits options available for renters looking to move as well as those looking to buy a house. High rent and low availability of units could dampen the prospects of likely homebuyers, who are unable to save at a sufficient rate due to paying more for their existing housing.
The report also notes that a 12.7% decline in the rates of utilities over the previous year likely contributed to a smaller rate of increase in monthly rent, which was observed at just under 4%.
Average monthly utilities rates varied widely by county and unit size throughout the state. In Belknap, the typical cost of utilities for a 1-bedroom was $226 per month, and $287 per month for 2-bedroom units. Those figures are slightly higher than in neighboring Merrimack, where utilities for a 1-bedroom averaged $190 per month, and $262 per month for 2-bedroom units.
But the share of available 2-bedroom units considered affordable in Belknap was considerably higher than in other New Hampshire counties. The median income of renters in Belknap was $46,511 this year, which is about average throughout the state, and rent considered affordable was $1,163. More than one-third of units fit that metric, making Belknap the third most affordable county. Statewide, the proportion of affordable units based on the same matrix was still quite low at just 24%.
The difference between careers for 1-bedroom rental unit affordability was also stark. With an average median rent of $1,430, nurses, public school teachers and electricians on average are able to afford rent for a 1-bedroom unit, while carpenters, firefighters and many other occupations were not.
While the shortage of housing throughout the state, in some ways, comes down to simple supply and demand, there are facets that could be addressed by government intervention or assistance, experts on the problem say.
The city’s new director of economic and housing development, Joia Hughes, pointed to barriers to development presented by the cost and difficulty of improving municipal infrastructure, such as sewer and water.
Areas of the city in need of infrastructure development can be addressed directly, but those projects are exceedingly expensive, and other areas which bisect state and municipal property require greater collaboration and negotiation between multiple levels of government.
The state’s Housing Champion designation program exists to serve that purpose. Cities which receive the designation are eligible for preferential funding and grant opportunities, including a $10,000-per-unit bonus for affordable housing development. At Tuesday’s city council meeting, the council declined to reconsider a Sept. 23 vote not to apply for the program.
“Being a Housing Champion designee would open up a lot of lines of funding for the City of Laconia,” Hughes said Tuesday morning before the meeting.
Some of those resources could, in theory, be passed along to developers one way or another to ease their financial burden in creating more housing.
“The main thing, at this point, is getting people housed,” Hughes said. “It has ripple effects on the whole economy.”
Looking at the 3.9% increase in monthly gross rent, including utilities, over the last year, which was relatively low, Hughes posited state programs like InvestNH may have an impact on slowing the increase, and money available to municipalities through the federal American Rescue Plan Act of 2021 may have assisted in the development of infrastructure.
“I think some progress has been made,” she said.
A conundrum for municipal planners is identifying parcels of land that could facilitate the density needed to develop workforce housing. Those parcels, in order to accommodate workforce housing developments or cluster housing developments with greater density, would also need access to municipal water, sewer and other necessary infrastructure.
“It’s huge,” Hughes said regarding the importance of infrastructure.
A lack of housing is exacerbated by a shortage in affordable stock. Programs offered by social services organizations, such as the Carey or Belknap houses in Laconia, are backed up and at times unable to move new residents in, or transitioning residents out, because they’re not able to find a place to go, even having done everything correctly to prepare for that opportunity, Hughes explained.
In July, organizers of the Carey House hosted a ribbon-cutting ceremony following the completion of renovations to allow more residents to find refuge there. But while the statewide vacancy rate remains under 1%, a few extra rooms doesn’t make much of an impact on the problem.
Despite clear and present challenges, Hughes expressed optimism that more affordable housing could be built in New Hampshire and the Lakes Region.
“There’s some really great programs and developments on the horizon,” she said. “We need to be able to house our people who are already here and to bring in new people in order to grow.”
To view the 2023 Statewide Housing Needs Assessment, visit nhhfa.org/wp-content/uploads/2023/04/2023-NH-Statewide-Housing-Needs-Assessment.pdf.
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