Board members of the Laconia Housing Authority met Thursday to discuss legal and financial hurdles in developing workforce housing in the city. (Photo by Gabriel Perry, The Laconia Daily Sun)
Workforce housing — meant to provide an option for those whose salaries are too high to qualify for subsidized housing — is heroic in theory, but difficult in practice, mainly because of lack of legislation and financial constraints.
Members of the board of Laconia Housing met Thursday afternoon to discuss workforce housing and hear from a Suffolk University law school student with expertise in the intricacies of New Hampshire’s workforce housing matrix.
Omar Frometa Jr., a summer associate with Preti Flaherty, described state law as lacking an enforcement mechanism for developing workforce housing, and said without federal or state subsidies, creating such developments is not financially feasible.
“Because this option is so novel, the solutions are varied as well as the obstacles,” Frometa Jr. said.
Workforce housing, as defined by sections 58-61 of New Hampshire RSA 674, is considered housing affordable for a renting family of three making 60% of the Area Median Income; owner families of four making 100% of Area Median Income; does not include age-restricted housing; and does not include developments with greater than 50% of units with less than two bedrooms.
Affordable is defined as spending no more than 30% of income on housing, including rent and utilities, or mortgage principal and interest, taxes and insurance.
New Hampshire’s workforce housing law, passed in 2008 and enacted on Jan. 1, 2010, states municipalities must provide reasonable and realistic opportunities for the development of workforce housing, including rental and multi-family housing. The collective impact of local land use regulations are to be considered in determining if such opportunities exist.
Workforce housing must be allowed in a majority of land area where residential uses are permitted, accounting for the existing housing stock in determining if a community is providing its “fair share” of needed workforce housing and reasonable restrictions may be imposed for environmental protection, water supply, sanitary disposal, traffic safety and fire and life safety protection.
“Since then, municipalities have had to find their own way to get in compliance with the law,” Frometa Jr. said. “Because the law doesn’t give a mold to adhere to.”
But there is no existing enforcement mechanism written into the law. Frometa Jr. described the legislation as communicating ideals or a clear call to action. Without a change in the legislation by adding an enforcement mechanism or defining a system of financial incentives, the law is essentially toothless.
“What I came away from — birdseye view — is it seems more like a mission statement, the way that the law was written,” Frometa Jr. said. “It feels as it reads that there were good people, trying to pass a good idea to stop a bad problem, but the issue is not cohesive enough or ripe enough. The infrastructure isn’t established enough to make it easy for municipalities to make this a primary way of attacking the housing crisis.”
Workforce housing development has been described as a necessity for Lakes Region towns and cities in recent months. A proposed development in Meredith, which would have provided affordable housing for seasonal and traveling employees of businesses there, was withdrawn after organizers received considerable opposition from local residents. There were zoning issues at play, and their request may have been denied, but Ryan Cardella of East Coast Flightcraft described an innovative approach to tackling the lack of affordable housing for workers there.
And in Laconia, the city’s ownership of a large parcel of land at the intersection of Old North Main Street and Parade Road spurred discussion on what sort of housing development may benefit city residents and workers to the highest degree. Mayor Andrew Hosmer expressed his interest in seeing affordable options developed for teachers, firefighters, police officers and municipal employees, among others.
But enforcement mechanisms aside, financial incentives to developing workforce housing are scarce if they exist at all. Language in the law mandating that workforce housing proposals must be reasonable and realistic are interpreted to mean that developments must be economically viable, Frometa Jr. explained.
“Proposals for workforce housing have to be able to return a reasonable profit to developers,” Frometa Jr. said. “Empty promises would not put municipalities into compliance with the workforce housing law. This is one of the first distinctions between affordable housing and workforce housing — there is a financial bottom-line that is imposed onto workforce housing that doesn’t exist for things such as housing choice vouchers and Section 8 housing, which has the developed and matured financial support of the government.”
The state law requirement that someone must make up to 100% of the Area Median Income to be eligible may be counterproductive if it causes new residents to lose eligibility upon receiving a salary raise. Hosmer, who attended the meeting, asked if AMI requirements could be adjusted by a municipality rather than the state legislature, and Frometa Jr. said he wasn’t sure.
Kara Sweeney, director of Preti Flaherty, said the state statute is meant to prevent municipalities from zoning out workforce housing developments.
“There is a necessary nexus, you can do whatever you want, you just can’t zone them out,” Sweeney said. “There is a difference between what it’s called and how you get it built and how you get it paid for when you operate it.”
Patrick Wood, who is a board member of Laconia Housing, said its clear there are not enough incentives to developing workforce housing.
“There’s no benefit or no incentive from the state to provide this,” Wood said. “There’s nothing that says, ‘If you do this, you get this in return.’ This is to make sure that it’s available, it’s possible, but there’s nothing that says, ‘Hey, you’re going to get some benefit out of this.’”
“That’s the problem with the legislation as it’s written,” Frometa Jr. said. “It wants an ideal but does not incentivize people going out to do it, especially when certain counties and municipalities might have a constituency that is averse to workforce housing.”
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