The citizen’s role in reopening the economy

In some activist circles, refusal to wear a face mask has become a sign of defiance, an expression of one’s rebellious spirit, like riding a motorcycle without a helmet. 

It should be the other way around. Wearing a mask is an expression of resistance to governmental authority. (Make it a Gadsden flag mask, to emphasize the point.) 

In history and legend, an American community under threat from an outside danger turns to the skills and leadership of the rugged individualist. John Smith, John Stark, George Washington, U.S. Grant come immediately to mind. 

This is the main theme of Western movies. The reluctant hero agrees to save the town, often at great sacrifice to himself.

The philosophy of the rugged individualist runs deep within American conservatism, which holds that government has no business protecting people from themselves. It’s why New Hampshire doesn’t mandate seat belt or motorcycle helmet use and embraces the motto: “Live free or die, death is not the worst of evils.” 

It’s easy to forget that the community and the rugged individualist are two parts of the same philosophical tradition, and they answer each other. The rugged individualist is not a hermit. He needs the community and it needs him. 

To be free from government controls, individuals have to be as self-sufficient as possible within their community. They work out their problems through community participation, good citizenship, and strong leadership. Personal responsibility, a coinage of the American founding, is an essential building block of a society with a limited, constrained government. 

The Founders understood this and wrote about it often. As John Adams put it one of the many times he made the point, “Public virtue cannot exist in a nation without private, and public virtue is the only foundation of republics.”

Ronald Reagan made the same point in his acceptance speech at the 1980 Republican Convention.   

“Together, let us make this a new beginning. Let us make a commitment to care for the needy; to teach our children the virtues handed down to us by our families; to have the courage to defend those values and virtues, and the the willingness to sacrifice for them.

“Let us pledge to restore, in our time, the American spirit of voluntary service, of cooperation, of private and community initiative; a spirit that flows like a deep and mighty river through the history of our nation.”

Service, cooperation, community, sacrifice. 

Reagan absorbed from the Founders the understanding that freedom from government constraints requires us to build voluntary associations through which we care for each other.  

To praise doctors and nurses for their sacrifice in the face of a global pandemic is an empty gesture if not accompanied by some effort of one’s own to reduce the risk those doctors and nurses must face.

Sweden is given as an example New Hampshire should follow. It has not ordered a nationwide lockdown to deal with the coronavirus. The reason? Sweden enjoys high levels of trust and personal responsibility. (Its people are also very healthy.) 

Large gatherings have been banned and sporting events canceled, but otherwise Swedes have voluntarily adopted behaviors that slow the spread of the disease. 

That’s the way to have an open economy during a global pandemic. (Although, as The Wall Street Journal has reported, Sweden’s economy is hurting too.) 

Granite Staters can speed the opening of the economy by doing three simple things. Wash hands, wear a mask, maintain personal distance. That will slow the spread faster than any government order. It will enable more businesses to open and stay open. It is done not to show obedience to the state, but to protect each other so there can be no justification for state controls.  

Now, about those masks. They’re not like motorcycle helmets. Their point is to protect others in your community, not you.

Most people who get the coronavirus don’t get seriously ill. They spread it without knowing they have it. Although Swedes tend not to wear masks, there’s strong evidence that masks are effective at slowing the spread of the coronavirus when people don’t even know they have it. 

Several academics writing in The Atlantic last month examined clinical studies and real-life experiences to conclude that “if 80 percent of people wear masks that are 60 percent effective, easily achievable with cloth, we can get to an effective R0 of less than one. That’s enough to halt the spread of the disease.”

“Mask use in combination with physical distancing is even more powerful,” they wrote.

Wearing a mask is not a sign of complicity (there’s no mask order in New Hampshire). It’s a sign that you don’t need the state to tell you to care for your fellow citizens. 

Individuals, acting in their own capacity without government orders, have the ability to slow or stop the spread of the coronavirus.   

Isn’t that what a self-governing people ought to be doing?

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To reopen the economy, ditch the ‘essential’ vs. ‘non-essential’ framework

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Addressing the first meeting of the Governor’s Economic Re-Opening Task Force, Gov. Chris Sununu said the state likely faced a gradual reopening over many months, not a quick lifting of restrictions within a few weeks. 

The task force’s job, then, is to craft a strategy that would “allow us to continually manage through the process as opposed to closing everything down and rewriting the playbook” if Covid-19 infections surge again in the fall or winter, the governor said.

Throughout the meeting, members discussed how to include all of New Hampshire’s industries. Two members stressed the importance of the arts to New Hampshire’s economy. The pressure on members to get certain industries listed as “essential” was obvious. 

Since the governor’s March 17 order that divided state businesses into “essential” and “non-essential” categories, people in industries categorized as “non-essential” have pressed hard to have their businesses recategorized. And who can blame them? For many, a forced closure for even a few more weeks, not to mention 18 months, is an economic death sentence.

It’s become clear that the “essential” vs. “non-essential” framework is deeply flawed. Adopted by governors nationwide, it’s a better fit for wartime production circa the 1940s. The effort to suppress the spread of the coronavirus does not fit that model very well.

The government isn’t forcibly converting the private sector to war-time production for the obvious reason that surviving a global pandemic does’t require quite the same sort of government direction and mobilization that defeating an enemy nation does. 

The task is not to turn our economy over to government control. It is to slow the spread of a virus. To do that, it isn’t necessary for the state to dictate which industries get to stay open. It’s necessary for people to behave in ways that minimize the spread of a virus. 

Anyone who’s shopped in the last month can see the problems with the current model. Grocers, classified as “essential,” sometimes implement responsible protocols and sometimes don’t. Grocery clerks are a top infected group, showing that safety practices are not always followed as rigorously as they might be. 

Artists and many small retailers, on the other hand, are forced to keep their doors closed even if they can responsibly clean their facilities and implement effective safety protocols.

A safe practices model that emphasizes behavior rather than industrial classifications is a better fit. 

Our counterparts at the Beacon Center of Tennessee have recommended that “any businesses that can maintain public health and safety guidelines should be allowed to open.”

That’s a much better framework to guide the reopening process. And it’s based on existing regulatory practices. 

Restaurants and hospitals, for example, have to meet lengthy checklists of health and safety standards. They are inspected, and if they meet the standards, they continue to operate. 

Rather than having the governor dictate which industries can and can’t open, a safe practices model would encourage and reward responsible behavior, including the widespread adoption of rigorous safety protocols throughout the economy.

Setting safety standards for businesses to meet could open much more of the economy while creating powerful incentives for the more widespread adoption of safe practices.

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Virtual Happy Hour with P.J. O’Rourke!

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Join us Friday, May 1, from 4:30-5 p.m. for a very special event, our first Virtual Happy Hour with author P.J. O’Rourke.

 

We’ll talk politics and policy during the coronavirus era.

Our thanks to

Jeremy Hitchcock

and

the New Hampshire Brewers Association

for sponsoring the event.

Everyone who attends the Happy Hour with P.J. O’Rourke will also receive free admission to the Brewers Association’s Virtual Beer Festival on Saturday, May 2.

There is no charge for the happy hour.

Register here: pjhappyhour.eventbrite.com

 

SPONSORED BY:

Jeremy Hitchcock 

and

 

 

 

 

 

 

 

 

 

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A virtual luncheon — Licensing in a Pandemic: Why you can’t find a food truck or get a haircut

Join the Josiah Bartlett Center for Public Policy for a virtual luncheon,

 

Licensing in a Pandemic: Why you can’t get a food truck or a haircut, and what you can do about it

 

Monday, April 27, at noon

 

We’ll discuss problems created by state and local licensing laws that prevent customers from accessing needed services, and how those laws make it harder for individuals and entrepreneurs to get by during a pandemic.

 

Our speakers are Andrew Cline, Justin Pearson, and Ross Connolly.

 

You can sign up by clicking this link to our Eventbrite page.

 

Speaker bios:

Andrew Cline is president of the Josiah Bartlett Center for Public Policy. Before that, he spent 14 years as editor of the editorial page of the New Hampshire Union Leader, where his work won him two New Hampshire Press Association Editorial Writer of the Year awards. A USA Today contributor, he has been published in more than 100 newspapers and magazines, including The Atlantic, The Washington Post, The Wall Street Journal, National Review, and The Weekly Standard.

Justin Pearson is the Florida Office Managing Attorney at the Institute for Justice and also oversees IJ’s national economic liberty efforts. Justin has devoted his career to defending the constitutional rights of small-business owners, and he has victoriously argued on their behalf in trial and appellate courts across the nation. These include winning several types of constitutional challenges that had never previously prevailed anywhere.  Justin received his law degree with honors from the University of Miami and his bachelor’s degree in business management from North Carolina State University.

Ross Connolly serves as the Deputy State Director of Americans for Prosperity-New Hampshire.  Ross oversees AFP-NH’s efforts to reform our occupational licensing regime to one that protects public safety while breaking down barriers that hold Americans back from reaching their full potential. A native Granite Stater, born and raised in Hollis, he is a graduate of Bishop Guertin High School in Nashua. Ross is an alumnus of the University of Rhode Island.

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Against federal guidance, Fiscal Committee transfers relief funds to state budget

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In a surprise motion, the Legislature’s Fiscal Committee voted 7-3 along party lines Monday to move $26 million in federal Coronavirus Relief Fund money to the state budget to pay for ongoing programs. But federal law does not allow such a transfer, leaving members confused about what the vote accomplished and whether it was legal. 

The Coronavirus Relief Fund included in the Cares Act provides $150 billion to states to help fight the virus. New Hampshire has so far received $625 million from the fund. That money is restricted for use in fighting the coronavirus. 

The IRS has issued clear guidance on how the funds are to be spent. It states:

“The CARES Act requires that the payments from the Coronavirus Relief Fund only be used to cover expenses that—

  1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
  2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
  3. were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.”

Those three conditions make clear that the federal money may not be used to fund programs that were part of any state budget approved before March 27, 2020.  

Legislative Budget Assistant Mike Kane read that guidance to the Fiscal Committee during its Monday meeting, which took place over the phone. 

Nonetheless, the 7-member Democratic majority voted to move $26,050,000 in federal Coronavirus Relief Fund money to eight existing budget line items. 

In an attempt to navigate around the obvious legal obstacle, the committee’s motion contained the clause “to the extent U.S. Treasury guidance permits.” 

That clause prevents the money from being transferred unless Treasury issues new guidance authorizing budget backfilling.

After Republican members questioned the committee’s legal authority to move the funds, Kane said that under existing federal guidance “there’s not much that the committee can do at this point.”

“I would recommend that legal counsel should be sought,” he added.

He further suggested that any such transfer of federal CARES Act funds might have to be advisory only. 

Sen. Cindy Rosenwald, the motion’s sponsor, said she believed the clause requiring updated Treasury guidance made the motion advisory. 

But because the motion commits the committee to transferring the funds pending federal authorization, it is not clear that the motion is really advisory in nature. If Washington eventually allows the transfer, the vote on Monday presumably would make it automatic.

Sen. Lou D’Allesandro, D-Manchester, acknowledged that the committee didn’t know whether Washington would allow the transfer to happen.

“We now have the money, and if indeed it meets the requirements set forth by the federal government, we can again restore to the public items that we thought they needed at the time so that there’s no disruption in service,” he said.

“If that proves inaccurate, then we have to make a change,” he later added.

Though the move was legally dubious, from a public policy standpoint filling budget holes with relief money has merit.

States are incurring massive revenue losses as a result of the economic contraction caused by business closures and stay-home orders. Gov. Chris Sununu estimated that New Hampshire’s budget could face $500 million in cuts in the next fiscal year, on top of a few hundred million by June of this year.

The Josiah Bartlett Center for Public Policy last week joined other free-market state think tanks in urging Congress to remove those restrictions so states can backfill their budgets in just the way the Fiscal Committee voted to do on Monday.  (CARES Act Coalition Letter[1][1])

But until Washington acts, states cannot use Coronavirus Relief Fund money to fund programs that existed before March 27 of this year. 

Further clouding the issue, Sen. Rosenwald’s motion to move the $26 million was not on the Fiscal Committee’s agenda for Monday’s meeting. It surprised Republican members of the committee, who protested that the vote should be postponed until the public had a chance to weigh in and members had a chance to read the motion. 

No paper copy had been provided to committee members. The text was read aloud during the meeting. 

“We do not have a copy of that motion,” Rep. Lynne Ober, R-Hudson, protested. “I just think that it’s totally inappropriate to be voting on today.”

Rep. Erin Hennessey, R-Littleton, moved to table motion until the public had a chance to see it and guidance from Treasury allowed it. Her motion failed on a 7-3 party-line vote.

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How the state can help restaurants survive the shutdown

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In the month before Gov. Chris Sununu ordered New Hampshire restaurant dining rooms closed, employment at New Hampshire full-service restaurants dropped by more than 8 percent (2,000 people), state figures show. In the month since the governor’s March 16 order, restaurant business has plummeted. State employment data are not yet available for those weeks, but industry insiders expect them to show catastrophic losses. 

Some New Hampshire restaurants already have gone out of business. Restaurant owners interviewed by the Josiah Bartlett Center in the last two weeks say things are bad and getting worse. If restaurants cannot reopen for in-person service in May, several said, the state can expect to see a wave of small-business closures.

A National Restaurant Association survey of restaurant owners nationwide found that 11 percent said they expected to close permanently within the next 30 days. Another 3 percent of those surveyed reported that they already had gone out of business. 

Restaurant revenue nationally is down by 50 percent for the year, according to data compiled by small-business software firm Wombly. That figure includes restaurants that specialize in take-out service, so the decline for dine-in restaurants would be even worse.

Full-service restaurants typically have low profit margins and high monthly expenses, including rent, insurance, taxes, and debt service on equipment. Reduced to take-out service only, many won’t survive if they can’t close the gap between their expenses and revenues. 

Anticipating that dining rooms are likely to remain closed beyond May 4, the Josiah Bartlett Center for Public Policy has drafted a list of policy recommendations to help full-service restaurants narrow their losses, and possibly return to profitability, so they can survive until the economy reopens. 

It’s important to understand that while on-premises service is halted by order of the state, other state laws and regulations prohibit restaurants from pursuing some potentially lucrative alternative sources of revenue. By temporarily relaxing some of these restrictions, the governor might be able to save numerous restaurants from closure, return some employees to work and reduce the burden on state services.

The policy changes listed below would help restaurants either bring in additional revenue or push back some expenses until later in the year, when dining rooms are expected to reopen.   

  1. Allow restaurants to sell beer in growlers. State law does not allow restaurants and bars to sell draft beer in growlers (large bottles, typically 64 ounces, with screw-on caps). With dining rooms closed, restaurants are sitting on thousands of dollars worth of draft beer inventory that they are prohibited by law from selling. The state lets restaurants sell draft beer for consumption on-site only. Keg beer has a short shelf life, so without an order allowing it to be sold for off-site consumption, some restaurants will be forced to pour out inventory worth tens of thousands of dollars. This waste is entirely unnecessary. An emergency order could allow restaurants to sell draft beer in their own growlers or to fill customers’ growlers after washing them in commercial washing machines. The order could require growlers to be transported out of reach of a vehicle’s driver.    
  2. Allow restaurants to sell mixed drinks in closed containers. The state objection to the curbside sale of mixed drinks is that drivers could open and consume the drinks while in the vehicle. But state law already allows patrons to transport open wine bottles from restaurants, provided the bottle is stored in a car’s trunk or out of the driver’s reach. Allowing restaurants to sell mixed drinks in closed, sealed containers, with the same distance-from-driver requirement that applies to opened wine bottles, could offer a significant sales boost for some restaurants without endangering public safety. 
  3. Allow restaurants to sell bottled liquor and wine. The Liquor Commission has let restaurants to return unopened liquor and wine, but only for store credit. That doesn’t help restaurants that need cash. State law allows restaurants to sell only opened liquor and wine, on premises. Temporarily allowing restaurants to sell unopened liquor and wine for take out would allow them to increase cash flow while reducing inventory. Though they wouldn’t be able to compete on price with state liquor stores, they could do a decent business from patrons who don’t want to drive all the way to a liquor outlet or who just want to support local restaurants. 
  4. Allow outdoor, in-person dining, subject to social distancing and other health protocols. Grocery aisles remain clogged with customers, many not wearing masks or following recommended social distancing procedures. Meanwhile, restaurant decks and patios where better health protocols can be enforced go unused. The state could let restaurants reopen outdoor dining areas subject to additional regulations, such as requiring restaurants to space tables at least six feet apart, disinfect tables and seats after each use, have staff wear masks, use disposable menus, and limit the size of parties and the number of customers allowed on site. Some restaurant owners suggested that they could make things work temporarily if the state cut their authorized seating capacity in half and banned large gatherings in lobbies.  
  5. Let restaurants defer rooms and meals tax payments. If restaurants could postpone their rooms and meals tax payments for 90 days, they could save some cash to help get through the emergency shutdown. Payments would still be made, but after business has picked up and more cash is coming in. 
  6. Municipalities can also help by letting restaurants defer property tax payments. 
  7. Give restaurants the same liquor and wine discount that grocers get. State law (RSA 178:28) grants grocers a 20% discount on the wholesale price of liquor and wine purchased from state liquor warehouses, but restaurants a discount of only 10%. Granting restaurants the same discount that grocers get will shave some of their costs when dining rooms reopen.

Restaurants operate on famously thin margins. Many will not survive a prolonged shutdown if the state continues to enforce regulations that prevent them from adapting to the forced closure of their dining rooms. Our recommended changes offer responsible adjustments that could keep many small businesses alive without creating additional risks to public health. 

A downloadable version of this brief is available here: Bartlett Brief — Restaurant Help During Shutdown 

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New Hampshire’s independent bookstores are open for curbside pickup, delivery

If you’re sheltered at home and want a book or a puzzle, you have more options than you might realize. Almost all of New Hampshire’s independent bookstores are open for curbside pickup and local delivery for the duration of the governor’s stay-home order.

Though bookstores are not classified as essential businesses under Executive Order 17, the order’s Exhibit A contains a clause allowing all retailers, essential or not, to “transition to curbside pick up or delivery only for orders taken online, by phone, or by other remote means.”

We confirmed with the governor’s office that this business is allowed under the executive order.

We love books and bookstores (think tankers gotta think). Books open the mind to a universe of ideas, and book sellers are the little markets that offer this vast universe for sale (often at a discount).

Readers benefit when a robust marketplace facilitates competition among a wide variety of book sellers. To help with that, we made a list of New Hampshire independent bookstores that are doing curbside and delivery business during the stay-home order.

We found two independent bookstores that are closed for the duration of the executive order. If we missed any that are doing remote business, let us know.

Here is the list of stores that are taking orders for pickup or delivery, complete with links for your convenience:

 

Bayswater Books, Center Harbor (Phone orders only)

The Bookery, Manchester (Curbside pickup, book & food delivery)

The Country Bookseller, Wolfeboro (Curbside pickup, delivery)

Eyes of the Owl (used books), Wolfeboro (Online orders & shipping)

Gibson’s Bookstore, Concord (Curbside service, shipping)

Innisfree Bookshop, Meredith (Curbside service, delivery)

Little Village Toy & Bookshop, Littleton (Curbside service, shipping)

Main Street Bookends, Warner (Curbside service)

Morgan Hill Bookshop, New London (Curbside service, delivery)

River Run Bookstore, Portsmouth (Local delivery, online order & shipping)

Sheafe Street Books, Portsmouth (Appointment only)

Still North Books & Bar, Hanover (Online orders only)

Toadstool Bookshop, Keene, Nashua, Peterborough, (Curbside pickup, shipping)

Water Street Bookstore, Exeter (Curbside pickup, delivery, shipping)

White Birch Books, North Conway (Curbside pickup, local delivery)

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Why should we have to ask permission to help each other?

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WMUR’s Hometown Hero this week is Alexa Cannon, a Founder’s Academy senior who started delivering groceries to people after she lost her job. She’s one of many, from business owners to individuals, who have begun offering urgently needed services outside of traditional regulatory controls.

In normal times, government prevents a lot of this innovation and cooperation by requiring permission before people can enter the market with a good or service. (Think of the police shutting down children’s lemonade stands.) 

Why weren’t people making face masks for doctors, nurses, and patients before? Because they aren’t allowed to. 

The Food and Drug Administration, which regulates face masks and respirators, suspended its normal, shortage-creating regulations only on March 25.

Why weren’t private labs making Covid-19 tests in February, when the coronavirus was quickly spreading across the United States?

Because the CDC shared testing instructions on Jan. 28 but did not allow private testing until Feb. 29, costing the U.S. an entire month of widespread testing.

In New Hampshire, the governor had to issue emergency orders just to make sure doctors could provide health care services over the Internet, out-of-state doctors could practice in New Hampshire, pharmacists could make and sell their own hand sanitizer, and notary publics could offer services remotely. 

The state even prevents itself from innovating. To allow the transition to remote learning, the state Board of Education had to pass an emergency rule suspending the rule limiting remote learning to five days.

All of this comes from a presumption among lawmakers and regulators that the government always makes people safer by requiring approval before providers can enter the marketplace. 

That’s the impulse behind laws that make it a criminal offense to give haircuts without a license or build a treehouse without a permit. 

A distiller in Vermont got to the heart of the issue when he told the Valley News after transitioning to hand sanitizer production, “Legally, we kind of weren’t supposed to be doing this, but no one cares right now.”

The opposite presumption has come to be called “permissionless innovation.” Duke University economist Michael Munger defines it as “a strong presumption in favor of allowing experimentation with new technologies and with new business platforms that use those technologies.”

It is, Munger says, the most important concept in political economy. 

As he explains, “delays in processing ‘applications’ for permission to experiment sharply curtail the types and frequency of experiments that are possible.”

That’s exactly what we saw with the U.S. response to the spread of the coronavirus. Critical weeks were lost before the government figured out that we didn’t have time to wait for the normal regulatory process to play out. 

That normal process is not just a problem during emergencies. As Munger points out, it curtails experimentation and innovation all the time, making us less well off. 

The coronavirus pandemic is helping to expose many flaws built into our existing regulatory regime. A lot of regulations that prevent innovation and market cooperation are simply unnecessary. 

If the emergency is exposing needless state regulations in health care, imagine how many there are in all the other fields the state regulates. 

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The coronavirus clampdown shows how controls breed controls

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“The extraordinary government clampdown on economic life that we are enduring — in order to preserve hospital beds and the capacity of doctors and nurses — is the result, not just of the coronavirus, but of the severe restrictions on economic activity that have made our economy brittle and poorly-suited to adapt and respond to this natural emergency.”

That’s the important point economics professor Raymond Niles makes in a brief essay for the American Institute of Economic Research.

Governments are ordering business closures and social distancing to ration hospital beds and other health care resources for which previous government regulations had created supply shortages.

Niles cites state Certificate of Need laws, which ration health care resources by requiring state approval before providers can offer new services or buy new equipment, CDC and FDA regulations that have limited the supply of personal protection equipment (PPE), and licensing laws that prohibit doctors and nurses from working in other states.

“This is the context in which we face the coronavirus and it sets the stage for the subsequent choices we must make. Our government is not making the right choice of repealing these death-causing restrictions. It is only doing it in small, halting ad hoc steps and on a completely inadequate basis. The only proper choice for the government is to repeal all of these controls, or as many of them as possible, as quickly as possible.

“If the government did that, the explosion in entrepreneurial activity — in production of tests, vaccines, cures, hospital beds, innovative new treatments, and an abundance of PPE and other life-saving equipment — would be monumental and it would save thousands of lives.

“We are getting some of it, as doctors, entrepreneurs, manufacturers, and everyday people, with shackles on and maybe in some cases partially removed by government, struggle and produce. But we could be doing so much more.”

The shortage of PPE, ventilators, hospital beds and medical professionals has shown the need to reexamine reams of laws and regulations that have caused delays in responding to the coronavirus. New Hampshire legislators and regulatory boards ought to be making lists of such laws and rules to address as soon as possible.

 

 

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Government-inflated rents hurt even more during periods of economic decline

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On April 1, rents were due for the first time since Gov. Chris Sununu declared a state emergency on March 13. News organizations reported on Granite Staters struggling to pay rent after suffering significant income loss in March.

As communities come together to help each other through these difficult situations, it’s important to understand that renters in New Hampshire have been squeezed for decades by a problem identified years ago and never fixed: government-inflated rental rates.

Emergency aid and help from caring communities can provide short-term relief during the next few months. But long-term rent relief can come only by addressing the apartment shortage created by local government regulations. 

In 2002, a legislative commission created to study workforce housing concluded that local government regulations were making rents unaffordable for many families. (The commission’s report was titled “Reducing Regulatory Barriers to Workforce Housing in New Hampshire.”)

“Individual communities, each acting in its own economic self-interest, have disconnected the State’s local housing markets from the rest of our economy and created an artificial scarcity that has driven prices beyond the reach of a large and increasing number of working families,” the commission found.

In 2008, the Legislature tried to provide relief by passing a workforce housing law that required municipalities to create “reasonable and realistic” opportunities for workforce housing. 

Twelve years later, rents are still rising as municipal housing restrictions have continued to strangle the supply of rental units.  

Data collected by the New Hampshire Housing Finance Authority illustrate the problem. 

The average rent for a one-bedroom apartment in New Hampshire rose from $587 in 2000 to $1,055 in 2019. Had rents risen at just the rate of inflation, the price would be $871, or $184 less than the 2019 rate. 

The average rent for a two-bedroom apartment rose from $774 in 2000 to $1,347 in 2019. Had rents risen at just the rate of inflation, the price would be $1,149, or $198 less. 

Saving $198 a month on rent would come to $2,376 a year. Some people who can’t pay rent this month because their hours were cut or their employer closed might have been able to cover a payment that was $184 or $198 cheaper.

As the 2002 legislative report noted, rents are being pushed up by local government regulations that have created an artificial scarcity in the rental housing market. For decades, demand for apartments and multi-family homes has far outstripped supply. Not enough rental units are being built because local governments have made it extremely difficult to build them. 

That inescapable fact is reflected in the state’s shockingly low rental vacancy rate. A healthy apartment vacancy rate is around 5 percent. New Hampshire’s rental unit vacancy rate in 2019 was 0.6 percent. The rental vacancy rate for the United States at the end of 2019 was 6.4 percent, according to the Federal Reserve Bank of St. Louis. 

New Hampshire renters have been burdened for decades by regulations that have prevented the supply of rental housing from matching demand. In boom times, restrictions on the construction of rental housing give the appearance that growth is being limited at no cost. But the cost is always there, and it hurts the most during times like this when thousands of people are losing their jobs or having their pay reduced.

If New Hampshire communities want to be places where everyone can find a home, the supply shortage will have to be addressed.

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