Regulations keep food trucks from riding to the rescue

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By Andrew Cline

Ken Spilman usually spends early April preparing B’s Tacos for the season. This week, the food truck he’s owned for seven years sits idle as he waits out the coronavirus. 

“We’re hunkered down and we’re not going to get out there until the curve starts to go down,” he said.

He’s already lost lucrative event contracts, he told the Josiah Bartlett Center.

“The cancellations are right across the board. We’ve lost a significant amount. I have contracts that have now been either canceled completely or rescheduled. Two weddings that were planned, early summer weddings, and they’ve decided to wait a year.”

In the rapid economic contraction following massive business closures last month, local regulations prevent Spilman and other food truck owners from improvising new ways to find clients. 

“I can think of neighborhoods in Londonderry and Derry that if I announced I’m going to be at this location on Wednesday night for an hour, I’d do very well. It’d be a huge opportunity for us food trucks to go into certain neighborhoods. It’d be more local. I could serve my local community instead of going down to Massachusetts.”

But food trucks generally are not allowed in residential zones. 

“Licenses or site vending permits shall not be granted for vending within any residential district,” states Londonderry’s vendor ordinance. 

“You’d be surprised how many people have reached out to me and said, ‘why can’t you come to our neighborhood like an ice cream truck,’” Spilman said. “With social media today, you really could come to a neighborhood.”

Location restrictions keep food trucks out of large portions of commercial and industrial zones, too. Portsmouth restricts food trucks to private property and a public parking space downtown. Seven sidewalk spaces are reserved for food carts. The city bans food trucks from doing business on city streets, with the exception of exactly one downtown parking space this year. (The ordinance allows for three.) The parking space is auctioned to the highest bidder annually. By ordinance, the starting bid is $5,000. 

State law requires food vendors to get a state license ($50), which allows them to operate everywhere in the state. They remain subject to local regulations. Fifteen New Hampshire municipalities regulate where, when and how food trucks can do business. Food truck operators say the local regulations are highly restrictive and the fees expensive. 

This month, with Granite Staters ordered to stay home and non-essential businesses closed, ordinances prohibit food trucks from going where their customers are — homes, public parks and hospitals — and force them into deserted downtowns and big-box-store parking lots.

“They could be operating more freely,” Aaron Krycki, environmental health supervisor for the City of Manchester, said. 

“Rules aren’t designed to tell you what you can do,” Krycki said. “They’re designed to tell you what you can’t do.”

But for food trucks, local regulations are so broad that they often amount to a short list of places vendors may operate.

Manchester reserves Stanton Plaza on Elm Street, in front of the DoubleTree hotel, for food truck vendors. It lets truck owners bid on spaces at eight city parks. Vendors must get written permission to use any other public property — and most private property as well. 

The city’s regulations require vendors to obtain “written permission of the abutting landowner and/or tenant” to do business on private property, even their own.

In Manchester and many other municipalities, it is illegal to sell food from an on-street parking space even if your truck is fully licensed, inspected, fits in the space, and the meter is paid. 

Cities typically prohibit food trucks from doing business on public streets even if not obstructing traffic. Some, like Manchester and Keene, make exceptions for “frozen confections” vendors (ice cream trucks). 

There is not a single licensed mobile ice cream truck in Manchester, and there hasn’t been one in years, according to the city clerk’s office. So Manchester residents stuck at home during the state of emergency can’t even be cheered up by a visit from the ice cream man. 

Keene generally prohibits mobile food vendors from doing business on public property, including roads and parking spaces, with a few center city exceptions. 

“We do have some locations downtown on the sidewalk where we allow food carts to be. Five right now,” Assistant City Clerk Terri Hood said. “They go through clerk’s office to get permission to use the space. In addition to normal license, they have to have additional license agreement and small rental fee.” 

The fee is $250 for a one-year permit, she said. 

Ice cream trucks can roam most Keene neighborhoods (there’s a list of narrow streets they are not authorized to use). But food trucks cannot sell in any residential area unless invited to cater an event on private property.

Keene recently revised its parking ordinances so city officials could allow vending from parking spaces at their discretion. Vending is allowed in “parking spaces or parking lots as may be designated from time to time by the city….”

Among food vendors, Concord and Portsmouth have reputations for being prohibitively strict and expensive. 

“I won’t go to Concord because of how expensive it is,” Spilman, owner of B’s Tacos, said. 

Concord’s license costs $212. (Nashua charges $10 for a day, $25 for a week, or $100 for a year.) 

Concord prohibits food vendors everywhere except in the central business district “at locations approved by the Licensing Officer.” By ordinance, “approved locations are limited to Eagle Square and to four (4) within the public way.”

That’s it for the city. Even for authorized spaces, vendors must get “the written approval of the landowner and tenant in front of whose property and business the applicant intends to operate and the written permission of the majority of the two (2) adjacent businesses located on both sides of the proposed location.”

With so many restaurants downtown, that likely means getting the permission of a restaurant owner, which is highly unlikely. 

“In Concord, if you could set up in front of the State House, that would be great, but they’d never let you do that,” said Chris Kozlowski, the award-winning owner of Crescent City Kitchen, a mobile food trailer. 

Some cities make the restaurant protectionism even more explicit. Manchester bans food trucks from doing business within 50 feet of a restaurant that sells a similar product. A truck that sells hot dogs, for example, can’t operate on the street near a restaurant that also sells hot dogs.   

That provision is probably unconstitutional. In 1979, the Los Angeles Superior Court in People v. Ala Carte Catering Co. struck down just such a regulation as unconstitutional, calling it a “rather naked restraint of trade.”

In 2011, the Institute for Justice, a public-interest law firm, sued El Paso, Texas, over its ordinance prohibiting food trucks from operating within 1,000 feet of any restaurant, grocer or convenience store. Rather than face a trial, the city repealed the rule, acknowledging that it served no public health purpose. 

The Los Angeles case helped food trucks to flourish there. The city is considered by many foodies to be the birthplace of gourmet food trucks. Its regulations are cited as a model for other municipalities because they are focused on health and safety and largely avoid anti-competitive restrictions.  

Remarkably, New Hampshire municipalities have food truck regulations that can be more burdensome than those in New York City or L.A. Even when one city’s regulations are relatively easy to meet, the costs of complying with different rules in multiple places adds up.

“The hardest thing about New Hampshire is that it’s not state-based, it’s not county-based, it’s local rule,” Krycki, Manchester’s environmental health supervisor, said. “Every individual town can create a list of ordinances that can differ from one location to another.” 

Kozlowski, who operates in New Hampshire, Maine and Massachusetts, estimated that he spent roughly $1,500 on government fees in New Hampshire alone last year. 

“I have a wall full of licenses inside my trailer,” he said.

The paperwork can be duplicative too. 

“The thing with the hawkers and peddlers that blows my mind is that you have to get a background check with the state, and then they want another for the permit, so it’s just a tax grab,” Kozlowski said. 

Some municipal officials understand how burdensome the rules can be. 

“I think the biggest issue that these food trucks face, and a lot of the complaints I get, is finding an area. That’s tough,” said Stacy Disabato with the Manchester City Clerk’s office. 

Having fielded lots of queries about the lack of food trucks over the years, there is interest at City Hall in becoming more accommodating, she said. 

“Anything we can do to bring business here, we’re really interested in learning.”

In Rochester last month, city officials invited four local food truck operators to set up in normally prohibited public spaces so they could keep their businesses alive.

“With the Covid-19 situation, their events and catering gigs had all dried up,” Rochester City Manager Blaine Cox said. “Two of our food trucks had semi-permanent locations. One was at the Home Depot and another was at the Harley Davidson dealership, and they were closed.

“They were basically shut out. And at the same time, with the governor’s order, we had quite a number of fixed-base restaurants that shut down. They didn’t bother to go to takeout, they just shut down.

“We reached out to our food truck operators and said, we know your business is drying up. If you’d like to come downtown, we have space for you.”

The idea was to keep the city’s four registered food trucks in business. With one of the newer operators, it worked, Cox said.

“One of our food truck operators said, If you guys haven’t done this for us, we wouldn’t survive.”

Food truck operators say the burden of so many costly and varied local regulations makes it hard to work in New Hampshire. 

“It seems to me that other states have their ducks in a row,” Spilman said.

If municipalities do not begin lifting onerous restrictions, state legislation is possible. 

Earlier this year, Kozlowski and other food truck operators went to Concord to petition legislators to adopt uniform, statewide regulations. They say they would rather have one set of state rules and a single fee than 15 different local ordinances and thousands of dollars in fees. 

Other states have already acted. 

After fielding similar complaints for years, Arizona legislators in 2018 passed a statewide food truck licensing bill that limited local regulatory authority. That same year, Rhode Island adopted a similar law that exempts food trucks from local hawkers and peddlers licensing. 

If municipalities want to avoid a statewide law that overrides their own ordinances, Los Angeles and some other California cities offer useful models. Food trucks flourished in L.A. after the city repealed regulations that restrained trade. Cities such as Fresno wrote regulations that achieved public safety goals without being overly restrictive. 

A 2012 Institute for Justice report, Food Truck Freedom, offers a list of suggested policies that would remove needless barriers while maintaining health and safety standards. The following suggestions are put together from recommendations made by food truck operators and the IJ report. 

To make immediate changes, leaders in municipalities that have declared a state of emergency might be able to relax rules temporarily during the state of emergency. This short-term measure could let food truck owners serve immediate local needs and relieve them from the burden of complying with regulations that sequester them to now-vacant downtowns.

  1. Lower hawker and peddler fees. These fees should exist only to cover nominal paperwork costs, not to raise revenue or discourage applications. Fees that range into the hundreds of dollars are clearly unreasonable burdens that have no relation to actual application costs. 
  1. Remove “abutter approval” language that gives neighbors a veto over a food truck’s location. These rules have no relationship to public health or safety and are merely a restraint on doing business. 
  1. Remove any language that restricts food truck operation within a certain distance of a restaurant. These restrictions are likely unconstitutional and should be removed immediately. In any case, they harm consumers by giving established businesses a veto over potential competitors. They also hurt other local businesses by keeping popular food trucks, and the customers who seek them out, away.
  1. Allow food vendors to operate on public streets and sidewalks as long as they do not obstruct traffic. Instead of creating specific set-back distances, Fresno, Calif., simply requires that vendors not “obstruct the free movement of pedestrians or vehicles on any sidewalk.”
  1. Allow food trucks to do business in any metered parking space for the duration of the meter. This will free vendors to find the spots most convenient for customers while preventing them from taking a space all day. 
  1. Allow food trucks to operate on residential streets. These prohibitions sometimes are handled by zoning departments, which treat food trucks as if they are opening a permanent store in a neighborhood. They are not. Food trucks can take orders by apps or online, just as take-out restaurants do, and deliver directly to customers’ homes. They also can use apps and social media to respond to customers’ location requests. Instead of cruising streets like an ice cream truck, some food trucks can stop and vend for a few minutes or a few hours in neighborhoods at the request of residents.This would be an especially valuable service during a stay-home order. 
  1. Allow food trucks to operate on more public property, particularly in parks and parking lots. Though many municipal ordinances limit food trucks to a few public locations, city officials often retain the authority to open other spaces at their discretion. The result is a random, unpredictable, and changing list of extremely limited available spaces. Food truck vendor locations should not be subject to the whims of municipal employees. A better policy would be to open parks and off-hours parking lots as a rule. Scarce space, such as near public swimming pools in the summer, can be put out to bid. Manchester auctions food truck spaces at eight city parks. 
  1. Let vendors compete. Manchester prohibits two trucks of the same type from being at the same park. Because there are so few vendors (only eight food trucks bid for eight park spaces in 2019), it hasn’t been an issue recently. But in more popular parks it could hurt consumers once food truck business expands. Vendors often respond to trends (cupcakes, for example). A city might have multiple grilled cheese trucks but no burger truck one year, then four hot dog trucks the next year. There’s no public harm in having two taco trucks at the same park. Limiting options, though, could keep prices higher and reduce consumer choices. 

Andrew Cline is president of the Josiah Bartlett Center for Public Policy.

Download a pdf copy of this report here: JBC Food Truck Regulations.

 

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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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Rent control rhetoric vs. reality

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Last November, Ontario’s government scrapped rent controls for new rental properties. Activists called it class warfare against low-income renters and predicted huge rises in rents.

“The class war fare (sic) launched by Doug Ford’s mean-spirited government continues. Their regressive policies including removal of rent control is going to make Toronto and Ontario less affordable and livable. That’s unacceptable. We must fight this,” tweeted a self-described “human rights activist” in Toronto.

A Toronto city councilor tweeted: “Doug Ford’s decision to remove rent control from new buildings will make Toronto even less affordable. It removes tenants’ rights & drives young people out of our city.”

Eight months later, Bloomberg reported that a spike in new apartment construction and permits had created a “record apartment surge” in Toronto. The rapid addition of new units pushed the vacancy rate up to its highest level in four years and slowed the high rate of rent increases.

“The vacancy rate rose to 1.5% in the second quarter, the highest since 2015, when research firm Urbanation began tracking the data. Rent increases eased to 7.6% from 10.3% last year, bringing the cost of an average-sized unit of 794 square feet to C$2,475 ($1,894).”

This outcome should have been as surprising as hearing a Canadian say “eh.”

Reams of research show that removing rent control laws raises rental property values, encouraging construction and leading to an increase in the supply of rental housing. That increase in supply, if not artificially restricted, puts downward pressure on rents.

A Stanford University study published in March found that rent control in San Francisco reduced the supply of rental housing by 15 percent. “Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.”

“In addition, the conversion of existing rental properties to higher-end, owner-occupied condominium housing ultimately led to a housing stock increasingly directed towards higher income individuals. In this way, rent control contributed to the gentri􏰃cation of San Francisco, contrary to the stated policy goal. Rent control appears to have increased income inequality in the city by both limiting displacement of minorities and attracting higher income residents.”

New Hampshire has its own version of rent control: Local land use regulations.

Needlessly burdensome restrictions on the size, location and type of apartments reduces the number of available units. These government-imposed constraints on the supply of rental units raise rents.

That, in turn, makes it harder for high-school and college graduates to afford to stay in New Hampshire after they leave the nest. And a shortage of rental units makes it more challenging for employers to recruit new talent, which puts an artificial restraint on economic growth.

It’s been widely reported this summer that many New Hampshire employers face a severe shortage of workers. A contributing factor is that many local governments have priced younger people out of the housing market.

More apartments would mean lower rents, which would make the state (Rockingham and Hillsborough Counties in particular) more accessible and attractive to the people employers are trying to hire. The same goes for single-family homes.

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Energy and housing’s self-inflicted wounds

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New Hampshire Public Radio reported this week on a study showing that rural New Englanders pay a higher percentage of their income on energy. This isn’t really new information. But it was a slow news week and the report’s recommended solutions seemed written to get NPR listeners to spill their morning coffees from their pledge drive mugs from all the vigorous head nodding.

The study concluded that Americans on average spend 3.3 percent of their income on energy, but for rural households the burden rises to 4.4 percent. In New England, rural households spend 5.1 percent.

The proposed solution? Energy efficiency projects. It’s probably a total coincidence that the report was released by a group called the American Council for an Energy Efficient Economy.

It’s true that making homes more energy efficient reduces energy use, thus reducing bills. ISO New England, the non-profit that runs New England’s energy grid, noted in this year’s Operational Fuel-Security Analysis that New England states have collectively spent more than $1 billion to improve energy efficiency, slightly tapering energy demand.

Since 2005, electricity demand in New England has fallen from a combination of the recession, milder weather, increased adoption of small-scale solar power, and energy efficiency investments, according to ISO New England.

Yet energy remains extremely expensive and the region remains at risk of rolling blackouts during periods of peak demand. Another billion dollars on energy efficiency could help shrink demand a little more, but it’s not going to solve the cost and supply problems.

To ensure enough capacity for peak demand times and to bring down prices for everyone — from low-income rural households to major manufacturers — we need more infrastructure and fewer rate-raising regulations like subsidies for politically favored power producers.

ISO New England projects a 4,600 megawatt reduction in power generation capacity by June of 2021. But states and communities are rejecting the construction the new infrastructure needed to replace those megawatts.

ISO New England figures show that in 2000, coal and oil generated 40% of New England’s electricity, and natural gas just 15%. By 2015, natural gas generated 49% and oil and coal just 3%.

Fracking fueled this change. Since 2009, natural gas has become much cheaper than coal and oil (and it produces fewer emissions). But we can’t tap it from maple trees (unfortunately, because flaming maples would be pretty great on Halloween).

We need pipelines to bring natural gas here. Without more pipelines, we’ll continue seeing high prices and more ships from Russia and other energy exporting countries docking in Boston.

In recent years, pipeline projects have been rejected throughout New England with such animosity that you’d think they were importing emerald ash borers or New York Yankees players. For proposing to bring enough fuel to ensure that Red Sox Nation survives winter, they’ve been run out of town. That’ll show ‘em.

We’ve artificially restricted our energy supply and raised rates by blocking construction and heavily regulating the sector. This has hurt rural and low-income residents.

And by the way, our housing policies have done the same thing.

Rural residents tend to live in older homes, and older homes are less energy efficient. The subsidized winterizing of old homes is always the recommended approach, but it is not going to address the underlying problem, which —like energy generation — is one of artificially restricted supply.

Home construction costs are at record highs because of rising labor costs, land costs, lumber costs, credit costs, and regulations. Every one of these costs is being driven higher by government policies — from immigration to tariffs to zoning to building codes to financial regulations. Regulatory costs account for 24 percent of the price of a new home, according to a National Association of Home Builders study.

If we scaled back housing, labor, land use, trade, and energy regulations, we would see energy and home construction prices rise less quickly or even fall. People of all income levels could better afford to buy, heat, and live in new homes.

But untangling those regulatory webs is difficult. It’s simpler to ask legislators to meddle in the markets by passing laws to shield lower-income residents from the consequences of the legislators’ past meddling.

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Gangster Tactics

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If you live in New Hampshire and enjoy wine, there’s something you should know (besides how approach a tasting). Your own state government, which sells wine, wants to be your primary supplier. Really, it wants to be your only supplier, but the Legislature won’t allow that. So to satisfy its impulse to smash all enemies, it’s rigging the wine market to kneecap upstart competitors.

The New Hampshire Liquor Commission both sells — and regulates the sale of — alcohol. This blatant conflict of interest gives it the power and incentive to limit its competition. Naturally, it uses that power.

After Prohibition, the Liquor Commission was the state’s only alcohol retailer. In the decades that followed, it aggressively fought the private-sector sale of beer and wine, changes that were proposed and ultimately ordered by legislators, who have grocers and drinkers as constituents.

Today, the commission is fighting a new competitor — direct wine retailers. The Liquor Commission is this week acknowledged that it has been systematically banning the direct-to-consumer sale of wines that are also sold in state liquor outlets.

The National Association of Wine Retailers this week called the commission’s actions “gangster tactics.”

During Prohibition, gangsters controlled the production and distribution of alcohol and snuffed out competitors. Ironically, the Liquor Commission, which was created to control alcohol distribution after Prohibition ended, wound up operating like a more lawful version of La Cosa Nostra. It pursues competitors relentlessly and does what it can to eliminate, or at least handicap, them.

Using the word “gangster” to describe the behavior of New Hampshire officials might call to mind images from a Weird Al parody. But where the power to whack competitors exists, it’s used.

Occupational licensing laws often grant specific industries the power to restrict competition. Licensing boards, made up of practitioners of a particular trade, are empowered to both practice and regulate that trade. Not surprisingly, they tirelessly suppress competition and seek legislative authority to further restrict entry into their field.

Public schools succeeded sank an Education Savings Account bill that would have expanded the definition of what constitutes a public education. It would have allowed families to spend the state portion of their public education dollars at non-public schools (local dollars would remain with the local public school district).

Perceiving this as a competitive threat, public school administrators, some local school boards, the teachers’ unions, and their political allies fought hard to maintain their advantage. They successfully turned enough Republicans against the bill to kill it in the House.

Even preppy suburbanites do it. Municipal officials and voters regularly approve ordinances to limit new business and home construction, reducing competition and raising prices.

It’s not that institutions granted such power attract people with a lust for blood and conquest. It’s that the combination of incentives and opportunity leads inevitably to anticompetitive behaviors.

So if you wondered why you could no longer order your favorite wine online, wonder no more. The Liquor Commission’s been taking a lead pipe to the knees of your favorite winery.

This was originally published in our weekly email newsletter, for which you can sign up here.

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On housing and energy, putting consumers first

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Housing and utilities comprise the largest portion of household budgets. In only nine other states and the District of Columbia do residents spend more on those two items than Granite Staters do, per Bureau of Economic Analysis data. Yet legislators have not been keen to reduce those costs for the people who elect them.

On the contrary, they often prefer to pass laws that make those items more expensive.

So the release this week of a new 10-Year State Energy Strategy that set cost efficiency as its primary goal was a big deal. The previous strategy, set in 2014, focused on manipulating energy markets to favor expensive and inefficient priorities such as renewable energy, with little attention given to the cost that would fall to consumers.

To understand the magnitude of the shift, imagine a hippie folk rock act ditching the acoustic guitars, cutting their hair and putting out an R&B album — a good R&B album.

“Addressing energy costs is a critical goal for New Hampshire. Expensive energy – or pursuing policies that raise the cost of energy – directly and negatively impacts New Hampshire families and businesses and the quality of life in our state,” the new energy plan states. “As such, the priority of this Strategy is to organize goals around cost-effective energy policies.”

The plan does not oppose all subsidies for renewable energy initiatives. It does advocate limiting any such subsidies to the start-up period to prevent ongoing cost-shifting.

This consumer-focused approach to energy policy is at odds with several bills in the Legislature this session to continue or expand subsidies of inefficient biomass power plants. Senate Bill 446 would further subsidize biomass facilities and solar arrays. Senate Bill 365 would further subsidize biomass facilities. Senate Bill 577 would further subsidize biomass facilities.

The permanent ratcheting up of electricity rates by compelling ratepayers to subsidize politically favored businesses is a long-standing New Hampshire practice. The new energy strategy discourages this. Its focus on lowering rates has drawn praise from the state’s ratepayer advocate. Whether legislators will respond by reconsidering their support for higher rates is the question.

Local housing regulations vs. consumers

As with energy, housing costs are rising when they could be stabilizing. There is huge demand for new housing in New Hampshire, and builders are eager to fill it. The problem is that local regulations make it extremely difficult to build new homes or apartments to respond quickly to surges in demand.

Those regulations also add costs that make it hard, if not impossible, in many communities to build residences that lower-income families can afford.

New Hampshire’s average monthly rental rates are higher than Maine’s, Vermont’s and Rhode Island’s and are comparable to Connecticut’s. Average rental rates in Connecticut are only $68 higher than in New Hampshire for a one bedroom and $63 higher for a two-bedroom. Median rents in Manchester are higher than in many larger cities such as Philadelphia, Atlanta and Orlando.

With a booming economy, thousands more jobs than we can fill, and a statewide rental vacancy rate below 5 percent for 18 of the last 20 years and below 2 percent for the last years, the rate of home construction in the state should be rising aggressively. It is rising, but not at rates that would come close to filling demand. Local housing restrictions are in the way.

A fix to help builders navigate these restrictions more quickly and less expensively is offered in Senate Bill 557. It would create a housing appeals board to which developers could appeal decisions of local boards, committees and commissions. Now, appeals go to the superior court. It often takes years for an appeal of a local housing decision to reach a resolution in court.

The housing appeals board would take these appeals out of the court system and resolve them quickly. The board would be required to hold a hearing within 90 days of receiving an appeal and make a decision within 60 days of the hearing. This would dramatically speed the appeals process while eliminating expensive legal costs for both builders and municipalities (taxpayers).

At a hearing in the House Finance Committee this week, no one spoke against the bill and the New Hampshire Municipal Association did not oppose it. Nonetheless, the committee voted to refer it to interim study. It will come before the full House on Thursday.

If legislators followed the lead of the Office of Strategic Initiatives and made reducing costs a top priority in both of these areas, the impact on Granite Staters could be dramatic. Making the state a lower-cost place to live and work would bring economic benefits far exceeding any that could come from propping up obsolete power plants or ignoring the costs of local land use regulations.

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You Need Some Christmas Book Advice

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Charlie Arlinghaus

December 18, 2014

As originally published in the New Hampshire Union Leader

You’re reading the wrong books. Actually, maybe you’re okay but your friends or your kids need some help. Have no fear, I break from policy today to offer you some Advent reading advice in the final eight days before Christmas.

To begin with, I will presume that too many people who actually stop at this page and read this column are at least a trifle obsessed with politics and that whole bizarre universe. Please stop. Give no books by an “author” who has a radio talk show or is an elected official. Instead read history and economics with a healthy dose of a fiction mixed in.

I have greatly enjoyed Anne Applebaum’s Iron Curtain about the slow crushing of Eastern Europe after the war. It is an intimate, balanced, and remarkable explanation of how a society can be systematically transformed in the traumatic aftermath of the war and then slowly crushed. The minutiae and psychology of how that transformation is possible is fascinating.

Some of the best economics is historical, makes no assumptions about our own knowledge of jargon, and doesn’t use language designed to exclude us. Almost every year, I give at least one person Niall Ferguson’s brilliant The Ascent of Money. Ferguson is an engaging writer and has presented the book as a six part television series. There are wonderful explanation of the historical origins and development of major economic concepts like money, insurance, stock, bonds, banking, and home ownership. A brilliant book that is eminently readable ought to be the starting point for anyone seeking to understand the financial world at all.

At the end of the day, I think we all read too much non-fiction. There is some bias that tells us the thicker and more boring a book is, the more noble and valuable it must be. Hogwash. This sort of drivel makes both books and people more boring.

Good fiction includes books that tell a truth more clearly and compellingly than any non-fiction ever could. But good fiction can also be escapist, entertaining, or mind clearing. Read for enjoyment and you will enjoy reading.

The best writer of English prose of the 20th Century is P.G. Wodehouse. If you disagree you have simply never read him. His are the most amusing and charming books ever written and find their perfection with the stories about Jeeves and Bertie Wooster. The best introduction is Carry On, Jeeves, the stories that introduce Jeeves to Bertie and us to the characters and their world. Start there and you’ll never stop.

Wodehouse’s writing is brilliant in the best way. You don’t sit back and admire it. Rather, it takes you in and envelops you without you noticing. Stephen Fry, a famous admirer, said “you just bask in its warmth and splendor.” Indeed you do and reading Wodehouse is an act in and of itself that makes life worth living. Read it and you will experience the healing power of the best fiction.

I have fourteen more suggestions but lacking in space we must move on to children. If there are children for whom you might buy a present, you wrong them if you don’t get them books. Reading can be cultivated at an early age and nothing is more valuable. To read is to explore the world we could never see, we meet people on a page we might never encounter in person, and gain experiences beyond our normal capacity.

Please branch out from movie and TV characters. Let their imaginations run rampant rather than skim movie plots. Start with Emil and the Detectives by Erich Kastner. Set and written in pre-war Germany, Emil is a 12 year old who has all his money stolen on the train and works to get it back with the help of a dozen new friends.

Substitute pigs and farms for Germany and kids and you have Walter Brooks’ Freddy the Detective about a porcine Sherlock Holmes. This too dates from the 1920s. Freddy learned to be a detective from reading Sherlock Holmes, as one might expect from a pig in upstate New York.

I reread both of these in the last two years and found them as pleasant now as I did when I was eleven. The same holds true, by the way, for Wind in the Willows or The Phantom Tollbooth. Classics don’t diminish as one ages.

I need to stop writing and you need to go buy some books.

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Don’t do Something, Just Get Out of The Way

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October 22, 2014

As originally published in the New Hampshire Union Leader

To help create jobs, politicians regular have to decide whether to do something or get out of the way. New Hampshire can do more by doing less and try to stay out of the way of people who know what they’re doing. We can’t compete with big states in an expensive and unfair bidding war to lure jobs to the state. Our best strategy is to create a climate in which job creators can flourish and avoid the managers looking for handouts and subsidies.

Regularly we read about some large auto company or other concern who gets states to bid millions of dollars in handouts of money and soon-to-be “forgiven” loans – money those politicians take from other taxpayers in their state in the hope of landing some high profile press release factory.

New Hampshire’s history is to avoid such politically driven games. We don’t enter bidding wars with money taken from other taxpayers to transfer to a chosen few.

The state’s long standing philosophy was summed up quite well by one of the government’s most senior economic development professionals. Michael Bergeron of the state’s Division of Economic Development talked to Sarah Palermo of the Concord Monitor about jobs that moved from Concord to Connecticut.

Connecticut had offered a million dollars of “loan forgiveness” (which sounds better than a cash handout which is what it really is) and New Hampshire had no similar program of cash handouts.

Bergeron said “a lot of companies will shop around to find the best deal. Some states will give away the bank. The law of physics says the money comes from somewhere, and it’s the taxpayers.”

This lesson is often forgotten when people think “the government should do more.” Any subsidies that we hand out to lure businesses to the state are paid for with dollars taken from other businesses – businesses already here and creating jobs, employment, revenue, and economic activity. In essence we would be taxing existing business to transfer their money to the relocating business. We would penalize a company for being here already and being a good corporate citizen.

Bergeron went on to summarize our less controlling philosophy: “instead of taking money away from you and giving some of it back some of the time, why don’t you keep it and use it as you see fit for your company.”

Without question, New Hampshire’s strategy makes us unable to compete for those companies that demand handouts before they ever expand. Yet, no one business development plan will attract 100% of all companies. We choose not to try and pursue those companies who demand greater and more expensive handouts. That allows us, however, to compete for those companies that have a philosophy more suited to our own.

Many companies are not interested in the gamesmanship of new programs. Instead they want a climate like the one Bergeron describes. They want a stable climate where government is not constantly picking winners and losers. They don’t want to compete to be this year’s favorite of the current crop of government planners. Instead they want to run a business in the way think makes most sense, the way that provides the greatest number of jobs and return on investment.

In Bergeron’s terms, they aren’t seeking to pay into a kitty and try and get the government to pick them as this week’s winner. They want to keep the money and use it as they see fit for their companies.

This is New Hampshire’s traditional philosophy. We compete on climate not unusual events.

Unfortunately, our climate needs some work. Our business taxes are the highest in the country. In an historical oddity that would have seemed impossible years ago, our Business Profits Tax is higher than even Massachusetts. That and a series of smaller taxes must become more competitive.

If we aren’t competing through government handouts – and we shouldn’t be – we have to do everything we can to create a very competitive environment not just kind of competitive.

Activist politicians often speak of “investing” in this program or that. But lowering our highest in the region tax rates is a better investment. We don’t rely on hoping that government planners have managed to see the right trends. We get out of the way and let entrepreneurs risk their own capital to fail and succeed.

Our government’s best action is to do less and get out of the way more.

 

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There are Fewer Reporters Because Nobody Cares

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Charlie Arlinghaus

August 20, 2014

As originally published in the New Hampshire Union Leader

Though we all pretend to care about state and local affairs, few of us actually can be bothered to pay attention. A tiny sliver of the population votes, participates, or even seems to care. Despite that epidemic of apathy, people can always be counted on to be annoyed by changes they themselves helped cause. Changes to journalism are one example of this trend.

There has been a great deal of angst lately as the Nashua Telegraph closed their State House bureau and released veteran reporter Kevin Landrigan. Following the retirement of longtime Associated Press reporter Norma Love, observers worried that no one in an increasingly lonely press room had any historical knowledge and that the public would be poorer because of it. The concern is real but exaggerated and sometimes expressed by people who helped cause it.

In a small press corps, losing two reporters who have witnessed so much definitely lessens the knowledge base but they weren’t the only veterans around. The Union Leader has a strong presence at the State House with Gary Rayno, a veteran of three decades and multiple newspapers, whose knowledge of the inner workings of the State House is equal to that of any current or former reporters.

Though a paper or two no longer has a full-time reporter, few of them will stop covering the State House. The Associated Press made a strong move by hiring the well regarded Kathleen Ronayne to replace Norma Love. In addition, the much lamented Mr. Landrigan didn’t miss a step as he was picked up immediately by a broadcast and internet concern.

Without question though, there is less coverage of everything local than there once was. A decade ago, the State House considered doubling the size of an overcrowded press room. More recently, they removed unused desks from a less utilized room. There are fewer newspaper reporters. That fact is often lamented by people who can’t be bothered to subscribe to newspapers themselves. It is a little disingenuous to complain about coverage while refusing to help pay the salaries of the reporters who provide said coverage.

The decline is not limited to print. Veteran radio man Ken Cail told me that when he first came to New Hampshire radio in the 1970s, a large Manchester station had a six person news room. Into the 1980s and 1990s multiple radio stations had news staffs of various sizes. Today, I’m not aware of any commercial station with dedicated news staff. Dedicated reporters exist at New Hampshire Public Radio but not elsewhere on the radio dial.

We all know some blowhard or another who insists to us that he only gets his news “from twitter and the internet.” Somehow, a friend of yours making a smart aleck comment in the 15 words twitter allows counts as news. A Facebook link to a newspaper story or a blog which recasts information gathered by a reporter grants the feeble minded the illusion that somehow the nebulous monolith of the internet created news from ether.

The truth is that fewer people care anymore. Things like the internet have disassociated us from each other. We are less likely to know our neighbors, participate in anything like a community, or have a social network that includes living beings. A sociological analysis our growing independence from human contact was called “Bowling Alone.” Bridge clubs, bowling leagues, discussion groups, church suppers and the like decline in favor of social media memes and something called “tweet-ups.”

The result in a civic sense is that we don’t care. New Hampshire’s noble and Norman Rockwellish institution of town meeting is a museum piece rolled out for people from away to see. The truth is that 90% of the people aren’t there. Controversies increase turnout but otherwise most of us stay home. Local elections are not much better. State primary elections next month will see between 10 and 15% of the population of the state actually cast a ballot. For the vast overwhelming majority, elections and public policy are just a nuisance or a slightly annoying background noise.

Most of us are less engaged in our geographic community or other communities of interest. As our civic engagement declines so too does our interest in local affairs. A decline in local news coverage – or at least our interest in it – is a reflection of that decline not a cause of it.

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New Hampshire’s gloomy August jobs report

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Josh Elliott-Traficante

September, 2013

While the unemployment rate in New Hampshire dropped to 5.0% in August, the decline was not caused by an increase in employment, but by a decrease in the size of the workforce. According to the Household Survey, the number of employed residents dropped by 120, the number of unemployed residents dropped by 650, while the labor force as a whole shrank by 770.

The August data continues a trend, seen in the New Hampshire labor market over the last few months, of declining unemployment coupled with a shrinking labor force. This is not unique to the state however; this trend is seen in the national data as well.

This means that discouraged workers are still dropping out of the labor force largely accounting for recent “improvements” in the unemployment rate.

Turning to the Establishment Survey Data, the state had a net loss of 1,000 jobs. The total number of private sector jobs declined by 3,200 and the public sector grew by 2,200.  Areas seeing the biggest losses were Construction (-500), Professional and Business Services (-1,100) and Leisure and Hospitality (-1,100). Sectors seeing the most growth were Local Government (+2,400) and Wholesale Trade (+300).

The Manchester area saw no change in employment in the month of August, while Nashua added 700 jobs, Rochester-Dover: 200 and Portsmouth lost 700.

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