Taking the first step to solving New Hampshire’s housing shortage
A positive shift is happening in New Hampshire’s pro-housing movement. Gov. Chris Sununu helped highlight it on Wednesday.
Speaking at a housing forum organized by the Center for Ethics in Government at St. Anselm College, the governor criticized municipalities that use local regulatory powers to impose severe restrictions on housing development.
Bedford, the governor said, was an example of a town that has made it difficult for people to build lower-priced homes, particularly multi-family housing.
That comment made news and focused attention on local regulations that prevent developers from meeting New Hampshire’s high demand for new residential construction.
Taylor Caswell, commissioner of Business and Economic Affairs, called the situation a crisis, as did others at the conference.
New Hampshire Housing Finance Authority data support that description. The authority’s November Housing Market Report found that New Hampshire’s rental vacancy rate was a scant 0.75 percent. A healthy vacancy rate is closer to 5 percent.
As of October, only 44 percent of New Hampshire real estate listings were for homes priced below $300,000. The authority’s research shows that overall real estate listings have fallen 41 percent in the past five years. But to highlight the affordability problem, listings above $300,000 have fallen 8 percent while listings below $300,000 have fallen 60 percent.
Vacancy rates, listings, and prices signal a serious supply shortage.
In the past, much of the effort to address this ongoing problem has focused on state subsidies for affordable housing. But there’s an increasing recognition that subsidies will not solve the problem because a lack of incentive to build is not the cause of the shortage.
A poll conducted at the end of Wednesday’s conference reflected an increasing agreement that local government regulations are preventing developers from meeting the market demand for lower-priced homes.
State financial incentives did not poll as well as did proposals to educate the public about the issue and encourage citizens to loosen overly restrictive local regulations.
Developers we’ve spoken with about this issue say they want to build less costly homes, but local regulations often pose insurmountable obstacles. Zoning and planning rules can literally make it illegal to build small single-family homes on small lots or to construct multi-family dwellings in a way that keeps rental prices low.
There seems to be an increasing realization among housing activists and office holders that the market isn’t the problem, government interference in the market is. That understanding is the first step to fixing the problem.
