On housing, a consensus has settled in among Granite State voters. It can be summarized in four main points:

  1. New Hampshire desperately needs more housing.
  2. Local governments should lift regulatory barriers to the construction of new housing.
  3. The state government should act to prompt local regulatory changes.
  4. Multifamily housing is acceptable in suburbs and rural areas.

The St. Anselm College Center for Ethics in Society has polled New Hampshire voters on housing since 2020. The 2024 poll, released this week, shows that voters’ views have solidified into a strongly pro-construction, anti-regulatory, pro multi-family majority. 

A supermajority (75%) agrees with the statement, “my community needs more affordable housing to be built.” 

Roughly 60% (59%-62%) welcome the construction of affordable housing in their own neighborhoods, the relaxation of local land use regulations to allow that construction, the building of multifamily housing in suburban and rural zones, and state intervention to make all of this happen. 

In the 2020 poll, just 28.7% agreed that local governments should relax their planning and zoning regulations to allow the construction of more housing. 

In the spring of 2021, the poll found a 10% increase, to 39%, of voters saying local governments should relax planning and zoning regulations. 

In the fall of 2021, the Josiah Bartlett Center for Public Policy released our landmark study showing that local land use regulations were the primary cause of the state’s housing shortage.

The next year, the percentage of N.H. voters who agreed that local planning and zoning regulations should be relaxed to allow for more housing shot up to 52%. It now stands at 61%.

High-profile conversations about specific policy problems matter. By 2021, Granite Staters were becoming more receptive to the idea that local land use regulations were a problem. A push by the Bartlett Center and others to identify the root cause of the housing shortage and propose solutions helped more people understand the problem and demand the right fix, rather than continue to falsely blame developers or the market.

Today, a strong majority of voters understands the problem and demands that it be fixed. Yet local voters and boards have not gotten the message. 

A few recent examples:

Hampton Falls rejects proposed 88-unit condo project on Route 1

Owner: McIntyre building still a parking lot due to Portsmouth zoning rules

Stratham select board sues town zoning board over 59-unit condo approval

Exeter 120-plus apartment project faces opposition

Portsmouth board rejects plan to raze 1900-era home for four new houses

Board nixes variance for North Newport senior housing project.”

New residential developments are being approved in New Hampshire. But boards continue to reject housing proposals simply because pre-existing regulations don’t allow the type of housing the market now demands. 

In the Hampton Falls and Stratham stories linked above, boards rejected variance requests because members didn’t want to contradict old, outdated rules.

In the Newport example, the rural zone doesn’t allow multifamily housing. Since the developer could conceivably propose a different use for the property than its highest, best, most in-demand use (multifamily housing), the board rejected the proposal. 

Though Granite Staters now say overwhelmingly that they welcome multi-family housing in suburban and rural zones, local boards continue to reject such proposals simply because old rules don’t allow them.

This discrepancy between voter and market demand on one side and inflexible regulations on the other cannot continue indefinitely.

The Center for Ethics in Society polling shows that on questions of housing, large majorities of New Hampshire voters are on the side of developers, not local regulators. And they want the state to act if local governments won’t. 

Voters say housing is the “most important problem facing New Hampshire,” the UNH Survey Center found last month. Thirty-six percent of voters named housing as the state’s top problem. In second place was education, with only 7% of voters naming it the top problem. 

In the most recent legislative session, the House Education Committee dealt with 156 bills. 

The number of bills referred to the Special Committee on Housing? Nine.

Housing beats education as the top concern of voters by 29 percentage points. But legislators, like local land use boards, are operating on outdated beliefs. They’ve yet to adapt to the changing voter preferences. 

But there’s an election this fall, and we’re already seeing candidates campaign on pro-housing agendas. 

Given the firmly solidified pro-housing position of most voters, hardened each month by news of rising home prices, and the slow pace of change at the local level, it would be political malpractice for lawmakers not to make significant regulatory reform a top priority next year.

For years, we’ve predicted exactly this development. The slow pace of change at the local level has voters turning to the state for solutions. So far, legislators have been reluctant to act. That won’t be the case much longer. The pressure to act is too great.

It’s a safe bet that we’ll see a significant increase in legislative proposals to address the housing shortage in 2025. People are tired of waiting for government to get out of the way and let developers solve the housing shortage government created in the first place. 

 

With a growing housing shortage and skyrocketing home prices as a result, the issue of housing is top of mind for Granite Staters. A June UNH Survey Center poll found that Granite Staters overwhelmingly say housing is the most important problem facing the state.

Unsurprisingly, the issue was also a top priority for legislators in 2024. And although some of the more ambitious pro-housing proposals didn’t make it through both houses, the Legislature passed a handful of modest reforms to free up the housing stock in New Hampshire.

The following are the five bills that passed both the House and the Senate and either await Gov. Sununu’s signature or have already received it:

* House Bill 1065: “relative to fire sprinkler requirements in residential buildings.”

* House Bill 1202: “relative to the issuance of permits for the alteration of driveways exiting onto public ways and relative to the definition of disability or special needs under the child care scholarship program.”

* House Bill 1359: “relative to appeals of certain zoning decisions by abutters.”

* House Bill 1361 (signed into law): “relative to municipal land use regulation for manufactured housing and subdivisions.”

* House Bill 1400: “relative to residential parking spaces, landlord-tenant law, unauthorized occupant evictions, and zoning procedures concerning residential housing.”

HB 1065 adds an exception to the state fire code for certain multifamily buildings. Under current law, existing multifamily structures consisting of more than two dwelling units must have a fire suppression or sprinkler system installed on the property. HB 1065 exempts existing buildings of no more than four dwelling units from this requirement unless fire sprinklers already exist on the property or are required by a nonresidential occupancy.

HB 1065 also prevents local jurisdictions from imposing stricter rules and regulations than the state fire code relative to residential sprinkler systems.

Requiring three-family and four-family buildings to have fire suppression or sprinkler systems can disincentivize developers and property owners from converting two-family buildings to four-families because of the prohibitive costs of installing them.

HB 1202 streamlines local permitting of driveways. Under this bill, a municipality must issue a driveway permit for a proposed driveway on residential land, including for multifamily use, within 60 days of the property owner’s application, putting an end to drawn-out permitting processes and preventing municipalities from wasting property owners’ time with delays.

HB 1359 limits who exactly can appeal local land-use board decisions by adding to the definition of “abutter.” Vexatious appeals of local zoning boards’ land-use decisions hinder residential development. Under current law, “any person whose property is located in New Hampshire and adjoins or is directly across the street or stream from the land under consideration by the local land use board” can appeal the permitted use in question to the local zoning board.

Under HB 1359, an abutter is “any person whose property is located in New Hampshire and adjoins or is directly across the street or stream from the land under consideration by the local land use board. ‘Directly across the street or stream’ shall be determined by lines drawn perpendicular from all pairs of corner boundaries along the street or stream of the applicant to pairs of projected points on any property boundary across the street or stream that intersect these perpendicular lines. Any property that lies along the street or stream between each pair of projected points, or is within 50 feet of any projected point shall be considered an abutter.”

In other words, not just anyone can claim to be an abutter and therefore appeal their local zoning board’s land-use decisions. Someone must be close enough to the land under consideration, and therefore have a claim to be materially affected by the permitted use, to have a right to appeal.

HB 1400, focusing on parking space requirements and unauthorized occupancies, was one of the more high-profile housing bills of the year. Originally, the bill prevented municipalities from requiring more than one residential parking space per housing unit. Under the version passed by both chambers, the bill prevents municipalities from requiring more than 1.5 spaces per unit for studio and one-bedroom apartments under 1,000 square feet, as well as for multifamily structures of 10 units or more.

Local parking requirements are often burdensome for housing developers and owners of multifamily properties to overcome because of all the land that needs to be accounted for and set aside to accommodate them. While 1.5 is not as ambitious as one, and owners of multifamily structures consisting of two to nine units will still have to abide by the whims local governments requiring two or sometimes more parking spaces per unit, 1.5 at least gives owners and developers of large housing complexes the breathing room to build without worrying about overcoming overly stringent parking edicts.

HB 1400 also allows municipalities to grant community revitalization tax relief for properties that are converted from office, commercial or industrial use to residential. This would let municipalities temporarily freeze property taxes on a building that is converted to residential use, thereby encouraging owners to make those conversions.

Sometimes local boards recommend changes to land-use regulations that would facilitate more housing development, only to see those changes rejected by voters. HB 1400 offers a remedy for this too. It would allow non-charter towns, village districts and counties that have unincorporated land to ask voters for permission to let the local governing body approve zoning changes without submitting the proposed changes to voters. If approved by voters, the local governing body would be able to change zoning laws or maps by majority vote.

Finally, after an amendment added by the Senate, HB 1400 outlaws squatting in New Hampshire. A “squatter” is someone who lives on another person’s property without that owner’s permission and without any legal claim or title to that property.

With the following language, “No person or legal entity, that is not a tenant, subtenant, or implied tenant, as defined in RSA 540-A:1, II, shall occupy residential real estate without permission of the owner, landlord, or their agent,” claims of “squatter’s rights” will have no legal basis in the Granite State under HB 1400, restoring to property owners the right to control who occupies their private property.

HB 1361, which has already been signed into law, forbids municipalities from banning manufactured housing. Prefabricated homes that are transported to sites, manufactured housing is an easy, quick and often inexpensive way to put more people into homes. Under HB 1361, municipalities can still regulate manufactured housing but not to the extent that it is effectively banned.

Each of these five bills, through exemptions, increased freedom, and/or regulatory reform, enhances property rights, reduces barriers to development, and makes it easier for Granite Staters to build more housing.

“The Legislature did a number of small things to ease the housing shortage, all of which had to do with giving people a little bit more freedom to use their land,” Jason Sorens, senior research fellow at the American Institute for Economic Research, said. “The most impactful reform might be letting residential developers propose alternative parking plans if the minimum requirement can be met through transit, on-street parking, or other options. But the session was also a missed opportunity in that the Senate killed more significant parking reform and by-right ADUs. Next year, they will need to get back to work on the problem.”

Among the more ambitious pro-housing bills that didn’t make it to the governor’s desk were HB 1215, HB 1291 and HB 1399. These bills represented attempts to extend the amount of time new developments are protected from local regulatory changes, allow property owners to add an additional accessory dwelling unit by right, and limit municipal restrictions on homeowners in urban residential zones who want to convert a single-family home to a duplex.

While these more far-reaching reforms didn’t make it through the Legislature, those that did represent an important first step in expanding private property rights throughout New Hampshire and reducing regulatory roadblocks to housing development.

Granite Staters want more housing, and they want enough of it to drive prices down. Whether they want it faster than legislators and local regulators have been willing to provide it is a question that might be answered only by future elections.

When the House passed House Bill 1400, the bill prevented municipalities from requiring more than one residential parking space per housing unit in their local zoning regulations.

Requiring 1.5 or two parking spaces per unit, as many zoning districts do, is often a prohibitive hurdle for housing developers and owners of multifamily properties to overcome, as every duplex, three-family, and four-family structure in the zone needs to have enough land set aside within its lot for as many as four, six, and eight parking spaces, respectively. As a result, many property owners and developers may determine the juice isn’t worth the squeeze and decide against building a multifamily structure that must accommodate all those spaces.

Originally, HB 1400 would have restored to property owners the authority to decide for themselves whether a unit needs more than one parking space on site. As amended by the Senate, however, the bill allows two parking spaces per unit, double the original bill’s limit.

But while the Senate was less ambitious in protecting Granite Staters’ property rights with respect to parking requirements, the upper body added a separate property protection, this one for victims of squatting.

The Senate’s version of HB 1400 first defines “tenant,” “subtenant,” “implied tenant,” and “non-rental owner” as each is most commonly understood. Then, the bill does away with what are commonly known as “squatter’s rights.”

“No person or legal entity, that is not a tenant, subtenant, or implied tenant, as defined in RSA 540-A:1, II, shall occupy residential real estate without permission of the owner, landlord, or their agent,” HB 1400 states. In other words, unless you have the express permission of the property owner through a written agreement or otherwise, then you do not have a right to live on their property.

And that includes being able to claim squatter’s rights.

As defined by Pacific Legal Foundation (PLF), “‘Squatting’ describes moving into a property without any legal claim or title to the property. Such a person is ‘squatting’—living on—someone else’s property without consent from the owner.”

Although the terms are often used interchangeably, squatting in the modern sense is not the same thing as what is traditionally called adverse possession. Under common law, adverse possession occurs when someone wants to lay claim to a property that appears to be abandoned, per PLF. To do so, the person would normally have to show clear possession of the property, start paying property taxes, and get approval from a court to be the new owner of the property.

This common-law understanding of adverse possession would not protect present-day squatting for the simple reason that the properties being occupied by trespassers are not abandoned, let alone the fact that squatters aren’t paying property taxes or going before judges.

The issue of squatting came to a head recently in the state of New York after a series of squatting incidents, including one in which the actual homeowner was put under arrest, led state lawmakers to strip squatters of any tenant protections.

Before these changes, unwelcome guests in New York City could claim squatter’s rights after occupying someone else’s property for 30 days, thereby making it very difficult for the owner to kick them out.

While nothing that extreme has been reported in New Hampshire, squatters can make a legal claim of adverse possession of a property provided they’ve occupied the premises for 20 consecutive years under current state law (RSA 508:2).

HB 1400 would effectively nullify any claim to squatter’s rights in the Granite State if the squatter doesn’t have the homeowner’s permission to live there.

Additionally, HB 1400 would provide enhanced processes for landlords, tenants and non-rental owners to seek relief for unauthorized occupancies on their property. Anyone who claims to be a subtenant or an implied tenant would bear the burden of proof for such a claim.

Laws upholding squatter’s rights—the rights of unwelcome guests to stake a claim on a property they’ve occupied for some amount of time without the owner’s permission—are antithetical to a respect for private property rights. And securing private property rights is paramount to a free society predicated on individual rights and liberties.

The right to private property necessarily includes the right to control who occupies that land. The Senate’s amendments to HB 1400 would make it clear that that power belongs to Granite State property owners.

The House did not concur with the Senate’s changes, so HB 1400 has been sent to a committee of conference to hammer out the differences between the two bodies.

Though a housing shortage amid rising demand continues to push prices up in most of the country, some cities in Florida and Texas are seeing housing prices fall. How? They’ve built a lot more housing, The Wall Street Journal reports.

In most of the U.S., the limited number of homes for sale is pushing prices back toward record highs. Sale prices for single-family existing homes rose in 93% of U.S. metro areas during the first quarter, according to the National Association of Realtors. The median single-family existing-home price grew 5% from a year ago to $389,400.

Yet the market is cooling and prices have started falling in some cities in Florida and Texas, where robust home-building activity in recent years has helped boost the number of homes for sale. The two states accounted for more than a quarter of all single-family residential building permits every year from 2019 to 2023, according to Census Bureau data.

In 10 Texas and Florida metro areas, the inventory of homes for sale in April exceeded typical prepandemic levels for this time of year, according to Realtor.com. In eight of those markets, pending sales in April fell from a year earlier.

In Florida and Texas, “we’re starting to get into a buyer’s market,” said Rick Palacios Jr., director of research at John Burns Research & Consulting.

Only five of the 50 biggest markets posted year-over-year price declines in March, according to data provider Intercontinental Exchange, and four of them were in Texas or Florida: Austin, Texas; North Port, Fla.; Cape Coral, Fla.; and San Antonio.

In Portsmouth and Manchester, where new rental construction has accelerated in recent years, bringing thousands of new units onto the market, prices remain stubbornly high. Some policymakers and observers have suggested that this disproves the idea that adding more supply will lower prices. It does not. New Hampshire’s supply remains tens of thousands of units short of demand. For prices to stabilize, supply will have to approach demand, which will take decades at the current pace of construction.

Stabilizing home prices by letting the market bring supply in line with demand cannot be done overnight. It’s a years-long process. But Florida and Texas show that it can be done.

There’s a growing consensus that New Hampshire’s overly restrictive land-use regulations need to be addressed to reverse the state’s housing shortage. Whether changes should be made at the state or local level, though, remains a major point of contention.

State-level solutions generate reflexive opposition from people who view local land-use regulation as an entirely local issue. Yet some of this opposition, maybe most, is based on an important misconception.

Opponents of state action commonly assert that bills to address the housing shortage are an effort by legislators to take for themselves powers that belong at the local level. This is mistaken. 

Decisions about land use will continue to be made locally. Under many of the bills working their way through the Legislature this session, those decisions will be made by individuals at the local level rather than by local governments—boards and bureaucrats—or voters.

Changes in Manchester

Realizing the desperate need for housing, some local governments are changing their ordinances to allow more development. In Manchester, for example, several proposed amendments to the city’s zoning ordinance would represent small but important steps to relax land-use regulations in the Queen City. 

The amendments would permit four-unit housing to be built on lots currently zoned for three-unit housing, drop the required number of parking spaces for multifamily housing from 1.5 spaces per unit to one space per unit, and no longer require property owners to petition the city’s planning board for a conditional use permit before building accessory dwelling units (ADUs).

These steps are the beginning of a bigger set of reforms being studied in the city. Not every municipality is moving in this direction, though, prompting state lawmakers to intervene in limited but meaningful ways. 

But these interventions don’t amount to the creation of statewide zoning. They just return some decision-making authority to property owners, from whom it was taken in the first place.

Legislation to restore limited rights to property owners

Consider the following bills: allowing one ADU, attached or detached, by right and allowing up to two per lot under certain conditions (HB 1291), forbidding municipalities from banning manufactured housing (HB 1361), allowing the expansion of a single-family residence within an urban residential zone to no more than two residential units without review if it meets certain requirements (HB 1399), and preventing local zoning regulations from requiring more than one residential parking space per unit (HB 1400).

Yes, these would be state laws, albeit modest ones. No, they would not amount to a uniform state zoning code. They would restore some limited rights to property owners while retaining local authority to regulate in each of these areas.

Currently, if a property owner wants to add a second ADU or convert a single-family home into a duplex within an urban residential zoning district—even if the developments wouldn’t encroach on neighboring property, disturb anyone, or change the outward appearance of the property whatsoever—local ordinances can prohibit them from doing so. 

Contrary to popular belief, local governments do not hold that power by right. The power to regulate private property is, under New Hampshire’s Constitution, granted to local governments by the state. 

With each of the bills above, lawmakers are not proposing to impose a single uniform ordinance statewide. They are proposing to reduce the regulation of property in these very limited areas altogether, thus restoring a small measure of rights originally held by property owners. 

Manufactured housing—prefabricated homes that are transported to sites—is an easy, quick, and often inexpensive way to put more people into homes. Under HB 1361, municipalities can still regulate manufactured housing but not to the extent that it is effectively banned. 

Parking space requirements are a pernicious roadblock to creating more multifamily housing. In zoning districts that require 1.5 parking spaces per housing unit, that means every duplex, three-family, and four-family building needs enough land set aside for three, 4.5, and six spaces, respectively. Where municipalities require two parking spaces per housing unit, that means every duplex, three-family, and four-family building must have four, six, and eight spaces, respectively. 

Often these stringent requirements keep a lot of multifamily housing from being created, either through development or single-family expansions. By preventing local governments from requiring more than one space per residential unit, HB 1400 would restore to property owners the authority to decide whether a unit needs more than one parking space on site. 

Because these kinds of state proposals would supersede local ordinances, they rub some the wrong way. Local control has long been a very important principle in New Hampshire.

The state’s historical adherence to local control, however, shouldn’t justify unlimited local control. Local governments are still governments, and as a result, their ordinances can be fundamentally oppressive.  

At the same time, we shouldn’t always assume that the state government overruling some local ordinances automatically represents state overreach. In the case of these four bills, such actions seek to pull back the centralized planning powers of local governments and protect Granite Staters’ property rights. 

Isn’t that what governments are instituted to do, to secure our rights? If so, then private property rights are chief among them.

When you consider that these state laws would be superseding some of the most overly restrictive local regulations that limit property rights throughout the state, and that state lawmakers have only resorted to these very modest steps because of inaction on the part of municipalities, then such proposals look less like top-down state government control and more like state government doing the bare minimum to protect Granite Staters’ property rights and address the state’s housing shortage.



New Hampshire’s median home price hit an unprecedented half-million dollars in March, just two years after passing $400,000 for the first time, underscoring the urgency of making changes to local land-use regulations. 

The change represents “a 16 percent drop in affordability from a year ago,” according to the New Hampshire Association of Realtors (NHAR) report.

For context, the state housing affordability index was 59 in March. In other words, the median household income in New Hampshire ($90,845) is a mere 59% of what one needs to qualify for the median-priced home at current interest rates.

Such poor affordability prospects haven’t always plagued Granite Staters. According to NHAR, the affordability index hit upwards of 150 in March 2017 and even reached a high of 200 in 2013. 

The culprit, as the NHAR concluded (and many Granite Staters know by now), is a “lack of New Hampshire housing inventory….” 

NHAR President Joanie McIntire emphasized the point. 

“The problem remains the shortage of available housing that is continuing to make homeownership more difficult than ever for those workers needed to help an economy thrive,” she said.

There is no doubt that New Hampshire’s supply of homes is nowhere close to meeting residents’ demand for homes. In a functioning market, when prices signal such huge demand builders would be expected to increase supply rapidly.

New Hampshire unfortunately doesn’t have a functioning market thanks to a thick layer of local government regulations. 

Exclusionary zoning—the use of zoning ordinances to exclude certain types of land uses from zoning districts—has run rampant in New Hampshire municipalities for decades, choking the supply of housing throughout the state.

Since our 2021 study identifying zoning as a major cause of the state’s housing shortage, there’s been a growing consensus that the current land-use landscape in the Granite State has to change. 

As if to emphasize our analysis of the New Hampshire market, the Fall/Winter 2023 edition of the Journal of Housing and Community Development last December published this summary of the link between restrictive zoning and housing affordability

Restrictive zoning codes contribute to socioeconomic divisions, worsen the housing affordability crisis, and artificially inflate housing prices. The insufficient housing supply further emphasizes the importance of exploring opportunities for increasing housing stock through land use reform.

The correlation between states’ median home prices and their land-use freedom is particularly damning. Among the 25 states with the lowest median home prices, according to Redfin and Bankrate 2023 data, 20 of them also rank in the top 25 for most land-use freedom, according to the Cato Institute’s Freedom in the 50 States 2023

Conversely, of the 25 states with the highest median home prices, 20 of them are found in the bottom 25 for the least amount of land-use freedom. 

In these rankings, New Hampshire has the 14th-highest median home price and is the 12th-most restrictive state when it comes to land-use freedom.

The relationship, reflected in numerous studies, is clear: Less land-use freedom shrinks the supply of housing, which leads to inflated home prices.

Another way to look at the problem is through building permits. New Hampshire publishes building permit approvals collected by the U.S. Census Bureau. These data show a sharp and sustained reduction in building permit approvals since the early 1980s, showing that the housing supply problem long predates the pandemic or the 2007–08 recession. 

From 1984–1988, more than 10,000 residential building permits (single-family and multifamily) were issued per year in the state, with the peak being 18,015 in 1986. The last time more than 5,000 residential building permits were issued in a single year was 2006—18 years ago.  

The median home price in New Hampshire cracked $200,000 for the first time in 2002. For the next two decades, home construction did not come close to meeting demand. By 2021, the median home price had doubled to $400,000. Now it’s $500,000. Despite astronomical demand for new homes, the number of residential building permits issued in 2023 was just 4,512, a decline of 271 from the year before. 

Builders make money by building and selling homes and apartments. They want to meet this demand. Too many local governments have made it too costly or difficult for them to do so. 

At this point it’s clear that relaxing local restrictions on land-use freedom in New Hampshire is critical to opening the market forces that will allow supply to meet demand. The more urgently policymakers act to lift regulatory obstacles to home construction, the more quickly builders will be able to respond to these flashing-red market signals and provide Granite Staters the housing they so desperately want. 

 

By Jason Sorens

The New Hampshire House of Representatives recently passed a couple of bills to make certain types of housing easier to build: single-family conversions to duplexes on lots with adequate sewer capacity, and detached accessory dwelling units. A more ambitious Senate bill comes up for a vote of the full chamber this Thursday, but unlike the cleaner, smaller House bills, this one has both pro-housing and anti-housing elements. 

As amended, this bill, dubbed the “HOMEnibus Act,” would do the following:

  1. Extend the existing Community Revitalization Tax Relief Incentive to cover conversions of office, industrial, and commercial uses to residential use. This is an optional program municipalities can choose to adopt. It makes it so that rehabilitation or conversion won’t incur additional property tax as a result of improvements that raise the value of a property. This incentive could result in more residential conversions, but it also reduces the property tax benefit a town receives from such conversions, which may make planning and zoning boards less likely to want to approve such developments in the first place. It’s hard to imagine that the incentive would make the housing shortage worse, but it also might not make it any better.
  2. Allow local governments that currently operate under direct democracy (towns without charters and village districts) plus Coos County to let their governing body–typically, the select board–adopt and amend zoning ordinances without a vote of the people. A vote of the people would be necessary to give the select board this power. The assumption seems to be that the people who show up on town election day are less pro-housing than select boards are. I’m unaware of direct evidence on this point. Based on evidence from Texas, Nolan Gray thinks voters are less pro-zoning than officials are. But my experience in New England suggests that the reverse might be true here, though it probably varies by town. Certainly, in places like Canaan and Dalton, the public vote requirement has stopped zoning from being adopted at all.
  3. Require planning boards to consider “alternative parking solutions” proposed by residential developers to meet on-site minimum parking requirements, and if the developer can demonstrate that these alternative solutions would meet parking demand, planning boards must accept them. Alternative solutions could include nearby off-site parking lots, agreements with ride-share companies, public transportation availability, or walkable infrastructure as designated in a master plan or zoning ordinance. This is a straightforwardly pro-housing, pro-property rights measure. It is also rather tepid, given that other states like Minnesota are proposing to abolish all on-site parking minimums statewide for all uses, but it’s better than nothing.
  4. Authorize mandatory inclusionary zoning (IZ) that would require up to 15 percent of new dwelling units be deed-restricted below-market housing provided the developer is granted a density bonus of at least 25% more units than what the base zoning allows. Unfortunately, this is an anti-housing measure, creating a type of rent control tax on new development, as Yale law professor Robert Ellickson pointed out  more than 40 years ago. Research in the Baltimore-Washington area finds that mandatory inclusionary zoning increases the cost of market-rate housing. Other peer-reviewed studies have consistently found a similar result: adopting mandatory IZ increases housing costs and distorts the market away from single-family development toward multifamily development. (However, one non-peer-reviewed study finds that moving away from mandatory to voluntary IZ does not reduce housing costs.)

The original version of the bill also had a major reform to minimum lot sizes that would have been pro-housing, but that was amended out. There is good reason to believe that the net effect of the current version of this bill would be to make housing less abundant and more costly.

Jason Sorens of Amherst is a senior research fellow at the American Institute for Economic Research.



Despite being the main metropolitan area in the state, the City of Manchester’s zoning ordinances are surprisingly hostile to the construction of new multifamily housing. As a review of the city’s zoning ordinances championed by former Mayor Joyce Craig continues, aldermen are considering three relatively small changes unanimously approved by the Planning Board and brought forward by new Mayor Jay Ruais. 

These proposed amendments to the city’s zoning ordinances would represent a small but important step in the long-term effort to make the city’s zoning rules more friendly to new housing development. 

“Specifically, these amendments would help to make the construction of a few types of housing easier in the city by reducing regulatory barriers and by speeding up the permitting process,” Jeff Belanger, director of Planning and Community Development, told aldermen at a recent public hearing. 

The first change would allow four-unit housing to be built on lots currently permitting three-unit housing.

“The ordinance today establishes minimum lot sizes for developing multifamily or townhouse buildings with three dwelling units and then requires additional lot area for each additional dwelling unit,” Belanger explained. “The proposed amendments would change the minimum number of units that could be built on a lot from three to four, meaning that there could be an additional dwelling unit built on the minimum size lot.”

But for these changes to have any meaningful effect, the amendments also address parking requirements, reducing the required number of parking spaces for multifamily housing from 1.5 spaces per unit to one space per unit. 

“The proposed amendments for housing units would not be at all effective really if we didn’t also make adjustments to parking requirements,” Belanger said. “Parking requirements can really limit housing construction because parking takes up land area and adds costs. That’s especially true when it comes to three-family and four-family dwelling units because of the current parking requirements in the zoning ordinance.” 

In zoning districts that require 1.5 parking spaces per unit, the result is that three-family buildings need to set aside five parking spaces and four-family buildings need six parking spaces. And having that fifth parking space triggers an additional regulatory burden. According to Belanger, lots with at least five parking spaces must have a landscaped buffer around them, which costs time, money, and land area. 

Dropping the required number of parking spaces to one per unit would allow four-unit housing to be built on what is now the minimum lot size for three-unit housing, as three-unit and four-unit buildings would only need three and four parking spaces, respectively, keeping them below the five-space threshold. 

The third change would eliminate the need for property owners to receive a conditional use permit from the city’s Planning Board before building accessory dwelling units (ADUs) on their property, bolstering a property owner’s right to build an ADU.

“The benefit of exempting ADUs from Planning Board review is that it makes them faster and cheaper to permit,” Belanger told the aldermen. “Planning Board review usually takes about a month for an ADU application and there are fees associated with it. Both the delay and the fees would be eliminated with this proposal.”

Removing this red tape would help accelerate the construction of ADUs in Manchester, increasing the supply of units in the city and putting more people in homes. 

Interestingly, the Manchester Planning Board unanimously supports all three amendments, though they would take power away from the Planning Board itself. That is a sure sign of how pressing the need is for these types of reforms in the city. 

According to the New Hampshire Zoning Atlas, Manchester permits two-family housing on 23% of its buildable land and three-family, four-family, and five+-family housing on 21% of its buildable land as of 2023. 

That puts Manchester behind seven other cities in the state with respect to duplexes and six other cities with respect to larger multifamilies. (See our breakdown from last year of Manchester’s hostility to duplexes and other multifamilies here.)

“Manchester’s proposed zoning amendment is a modest but meaningful change that will probably result in a few dozen more apartments being built in scattered locations,” said Jason Sorens, senior research fellow at the American Institute for Economic Research and the principal investigator of the zoning atlas. “The city could go even further, especially since some of the changes merely bring the zoning in line with existing densities, but this change would start to chip away at the housing shortage in the city without causing noticeable changes in density at the neighborhood scale.”

There’s more the city can do to free up the supply of housing, such as further rolling back parking minimums, addressing minimum lot sizes, streamlining the permitting process for all types of construction, and opening up more buildable land for duplexes, just to name a few. But these proposed changes before the city now would start the much-needed process of reducing development costs and protecting residents’ property rights. 

“The proposed zoning amendments are not going to fix every housing problem in the city, but they are intended to at least help get at the cause of the housing crisis, which is a lack of supply,” Belanger explained. “They are intended to reduce regulatory barriers to housing production, while respecting the character of neighborhoods.”

State lawmakers are considering a slate of housing bills that would effectively override many municipalities’ zoning codes. And while some view such actions as constituting threats to local control—which New Hampshire rightfully cherishes—inaction on the part of local governments to loosen their own regulations may leave the state with no other choice. 

That is, unless cities like Manchester act first on these kinds of zoning amendments. 

 

As pressure builds for local and state policymakers to address New Hampshire’s severe housing shortage, some activists and lawmakers are again blaming developers rather than regulators for the state’s high rents. 

Developers are building “too many” apartments for higher-income renters, some claim. This raises rents, hurting the poor, so government must intervene to make builders reserve a certain percentage of new construction for lower-income households, the argument goes. Some also want the state to give subsidies to low-income renters. 

The idea that building more apartments raises rents has achieved the status of conventional wisdom in some activist circles. It’s done so despite it being untrue, and confirmed untrue by growing stacks of economic evidence. 

Even academics repeat the claim. A California political science professor, in a February opinion column for New Hampshire Bulletin, wrote that “construction in the high-end ‘luxury’ rental market, which drives up rents for everyone else, remains in an upward trend.”

In fact, building more market-rate apartments reduces rents for middle-and lower-income households. This has been well established in academic research for years. And recent studies have provided more detailed confirmation of the effect.

A review of recent research on the subject finds:

  • Researchers at the Upjohn Institute and Federal Reserve Bank of Philadelphia found in 2019 that new market-rate apartment buildings “decrease nearby rents by 5 to 7 percent relative to locations slightly farther away or developed later.” They made a point of stating that the evidence ran against common complaints about market-rate apartment construction. “Contrary to common concerns, new buildings slow local rent increases rather than initiate or accelerate them,” they wrote.
  • A 2020 study by the National Multifamily Housing Council Research Foundation found that a “substantial flow of new construction apartments, largely targeted to middle- and higher-income groups, has enabled the ‘filtering’ process to create affordable housing opportunities for low-income households,” as a summary of the report put it. 
  • NYU researchers in a 2018 paper sought to answer claims that building market-rate apartments raised rents. “We ultimately conclude, from both theory and empirical evidence, that adding new homes moderates price increases and therefore makes housing more affordable to low- and moderate-income families.” They also noted that housing shortages are caused by regulations, not new construction. “Despite the arguments raised by supply skeptics, there is a considerable body of empirical research showing that less restrictive land use regulation is associated with lower prices. The evidence takes many forms. A large number of cross-sectional studies show that stricter (less strict) local land use regulations are associated with less (more) new construction and higher (lower) prices.
  • A 2021 UCLA review of recent studies on the effects of building market-rate apartments found overwhelming evidence that new construction of market-rate units lowers rents. Referencing the NYU paper cited above, the authors wrote: “Since that article came out two years ago, at least six working papers have been released that examine the connections between market-rate housing production and affordability at the neighborhood level. Four of the papers conclude that market-rate development makes nearby housing more, not less, affordable. The fifth paper looks at rents across entire cities rather than at the  neighborhood level, but finds that new development causes rents to fall for units across the income distribution. Findings in the sixth paper are mixed, and offer some reason to think new development makes nearby housing more expensive. Although the papers await peer review, and readers should bear that in mind, the importance and near-unanimity of their findings makes discussing them worthwhile.”

Building luxury or higher-end apartments draws higher-income renters out of yesterday’s luxury apartments and into the new luxury apartments. Increased vacancies in yesterday’s luxury apartments attract higher-income residents who’ve been living in mid-level apartments. As new construction creates more vacancies, rents come down. That effect filters throughout the housing supply, lowering rents all the way down. Economists call this “filtering,” and it’s an effect thoroughly established in academic and industry studies of rental housing markets. 

There’s no doubt that filtering occurs when enough new apartments are built. It can’t occur, though, if government prevents developers from creating those new high-end apartments. The problem in recent years has not been the creation of too many high-end apartments, but too few.

Harvard’s Joint Center for Housing Studies pointed this out in 2020: 

“What is different about the recent dynamic is that new construction is accommodating a growing number of high-income households, but just barely. Indeed, despite the relatively high rents, the number of new apartment units being added each month is scarcely keeping up with growth in units rented out, or ‘absorbed’ by new renters. When new construction is only just meeting demand from new high-income renters, it means that, in effect, new high-end units are being rented out by new, high-income renters, rather than by current high-income renters trading up to a newer unit, and therefore fewer old units are left to ‘filter down’ to a lower-income renters.”

In other words, when developers are allowed to build more market-rate apartments, rents come down for everyone. When they aren’t, rents stay high. 

The NH Coalition to End Homelessness (NHCEH) recently released The State of Homelessness in New Hampshire Annual Report 2022, and the results are understandably concerning. 

According to annual Point-in-Time (PIT) counts, statewide homelessness grew from 1,382 people in 2019 to 1,605 in 2022, a 16% increase. 

While sheltered homelessness (people living in shelters) increased by about 3% over those four years, both chronic and unsheltered homelessness increased by a whopping 71% and 125%, respectively. 

According to data collected throughout the year using the state’s Homeless Management Information System (HMIS), the numbers are equally startling. The state’s homeless population grew by about 32% from 4,554 people in 2020 to 6,031 in 2022. 

“The rate of homelessness in New Hampshire increased from 330.6 per 100,000 residents in 2020 to 432.3 in 2022, reflecting a rate increase of 30.8%,” the report states. Over those three years, chronic homelessness rose by 30% and unsheltered homelessness rose by 41% using HMIS.

Homelessness is undoubtedly a multivariate problem—an issue involving a handful of variables where not one single “solution” will eliminate the problem entirely. But a severe shortage of rental housing is a major factor in New Hampshire. 

“There is simply not enough available housing to meet the need,” the NHCEH states in its report. 

A state’s rental vacancy rate is the percentage of residential rental units in a given area that are currently available. A statewide vacancy rate of 5% is emblematic of a balanced market (supply meeting demand). 

New Hampshire’s vacancy rate is 0.8% for all units (0.6% for two-bedroom units), according to the New Hampshire Housing Finance Authority

The state vacancy rate has been under 1% for four out of the last five years. The last time it was at least 5% was 2009–2010. Six of New Hampshire’s 10 counties (Belknap, Carroll, Hillsborough, Merrimack, Rockingham, and Sullivan) have vacancy rates below the statewide figure of 0.8% this year.

Our research has established that local land-use regulations are the main culprit holding back the supply of housing in the state. Parking requirements, minimum lot sizes, exclusionary zoning, and other constraints are examples of land-use regulations that choke the supply of housing by making it more costly, difficult, or impossible to build. Municipal restrictions on rental housing can be severe in some locations.

Multifamily housing is greatly restricted in many of the state’s 13 cities. Here are the percentages of buildable land on which multifamily housing is allowed in each New Hampshire city in 2023, according to the New Hampshire Zoning Atlas:

2-Family 3-Family 4-Family 5+-Family
Berlin 82% 40% 40% 40%
Claremont 87% 5% 5% 5%
Concord 22% 36% 36% 36%
Dover 82% 65% 65% 65%
Franklin 7% 7% 7% 7%
Keene 8% 9% 7% 7%
Laconia 28% 28% 28% 28%
Lebanon 14% 6% 6% 6%
Manchester 23% 21% 21% 21%
Nashua 57% 58% 58% 58%
Portsmouth 28% 30% 30% 30%
Rochester 72% 10% 10% 10%
Somersworth 14% 8% 8% 8%

Eight cities allow duplexes on 30% or less of their buildable land. Another nine allow multifamily housing of three units or more on 30% or less of their land. And these are after some zoning improvements were made over the last year. 

With a current shortage of more than 23,500 housing units, building more multifamily housing is critical to addressing homelessness. But prohibitive zoning laws in many municipalities get in the way. 

Reducing homelessness means increasing rental housing. Increasing rental housing means relaxing the local land-use regulations that severely restrict the development of rental housing. 

It’s no coincidence that as the state vacancy rate has consistently remained below 1%, rents—and homelessness—have increased. 

Median monthly rent for a two-bedroom apartment in the state has increased by 59% since 2014 to $1,764 in 2023. Rents have increased by 31% since 2019 alone.

Again, housing supply isn’t the only factor driving the increase in New Hampshire homelessness. Municipal officials also point to increases in substance use, addiction, and mental illness. But a larger supply of lower-priced homes and apartments would put housing within reach for many who struggle to stay off the streets. 

Illustrating the connection, research by the Pew Charitable Trusts found a strong connection between high rents and high levels of homelessness between 2017 and 2022. That study was consistent with findings from previous studies.  

One policy often proposed as a remedy for both homelessness and high rents is the government imposition of rent caps. For the second year in a row, state lawmakers have filed a bill to authorize municipalities to implement rent control measures.

House Bill 1362 would enable municipalities to enact ordinances limiting how much rents can be raised over a 12-month period. It’s pitched as a way to “stabilize rent increases.”

Price controls like this may be politically seductive, but they are economically harmful. Instituting rent control would have the same deterring effect on developers that burdensome zoning regulations already have. By reducing profitability, rent control would further reduce the supply of rental housing. So, instead of solving the state’s shortage of rental housing, it would only worsen the shortage. This would lead to increases in New Hampshire’s homeless population. 

It’s well established, as we’ve pointed out, that rent control laws reduce the supply of rental housing and tend to push market rents even higher. Rent control is not a solution. 

“[T]he people who are asking for rent control are very angry when they discover there is a shortage of apartments and a shortage of housing,” wrote economist Ludwig von Mises in Economic Policy: Thoughts for Today and Tomorrow.

The problem with housing in New Hampshire isn’t “greedy” landlords or developers. It’s government policies that prevent or discourage landlords and developers from increasing supply. Get those regulations out of the way and the market will step in to meet the need.