Outdated auto inspection laws appear more related to culture than cold

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Every time legislators propose ending New Hampshire’s annual auto inspection mandate, opponents allege that inspections are common in Northern states because cold weather hazards (road salt, frost heaves) make them necessary.

In fact, most cold-weather states, like most states overall, don’t require annual auto inspections. Mapping the states that require annual inspections reveals that culture likely plays a bigger role than weather. 

Of the 11 states (by our count) that require annual auto safety inspections (not emissions inspections), nine are clustered on the Eastern seaboard, running from North Carolina to Maine. Only Hawaii and Louisiana are outside of this stretch of original American colonies.

Of the 10 coldest U.S. states, only three require any auto safety inspections: Maine, New Hampshire and Vermont.

Not a single Canadian border state from Ohio to Washington requires auto safety inspections. No state West of Pennsylvania and north of Missouri does. 

There’s simply no truth to the claim that cold weather states adopt auto safety inspections while warm-weather states don’t. 

Auto inspection mandates are clustered not in cold-weather states, but among the tradition-bound states along the East Coast. From Maine to North Carolina, only Connecticut has no inspection mandate for passenger vehicles. West Virginia and New Jersey have biennial inspections rather than annual. 

The inspection mandates end, not surprisingly, in South Carolina, rather than Virginia. North Carolina and Virginia are closer to Maryland than the Deep South when it comes to the level of state regulations. 

Auto inspection mandates pop up again in Louisiana and Hawaii (annual), then Missouri, Colorado and California (biennial). 

The map suggests that culture and traditions play a more important role than weather in determining which states adopt auto safety inspection mandates. 

New Hampshire’s inspection law dates from 1931. Despite our reputation as a libertarian stronghold in the Northeast, New Hampshire’s political culture is one in which existing laws are changed, if at all, slowly and deliberately, not suddenly. 

Our political culture also is one that values re-assessing outdated laws and finding ways to maximize economic freedom. Thanks to a nearly century-old law, New Hampshire finds itself in the company of states like New York and Massachusetts. 

New Hampshire’s auto inspection mandate is stricter than California’s and New Jersey’s. It is on par with New York’s, Vermont’s and Massachusetts’. Famously left-wing and highly regulatory states including Illinois, Washington, Oregon and Connecticut are among the 33 states that don’t require auto safety inspections at all. 

When the state’s auto inspection mandate was adopted, automobiles were unreliable and had short life expectancies (about 7 years). Today, the average automobile is more than 12 years old and can be expected to reach 200,000 miles. 

The decline in both accidents and fatalities since the 1970s, along with the massive gains in auto safety and reliability, undermine the case for maintaining a 1930s law that only a handful of states still have—and that is not associated with improvements in highway safety, as we pointed out here. 

At some point, New Hampshire will end this mandate that has outlived its usefulness and that imposes heavy costs on motorists without any corresponding gains in safety. The question is whether the end will come before or after the law hits its 100th anniversary. 

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A uniform statewide building code would speed development times and lower costs

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Home building is tough throughout New England, but Massachusetts gives its builders an advantage that builders in New Hampshire don’t enjoy. Massachusetts uses a uniform building code statewide. Builders there know exactly what every town’s code is because they’re all the same.

That’s not so in New Hampshire, where municipalities can tack their own rules onto the state building code. This random patchwork of building codes raises costs and slows projects.  

“It’s just all over the place,” builder Matt Blanc of Charlestown said. “Just getting things standardized would be huge for us.”

The local requirements themselves can add tens of thousands of dollars to the cost of a new home or apartment building. That can be a particular problem for small contractors. 

“Some communities will require a full-blown commercial fire alarm system in an apartment with two units in it,” Blanc said. “That could be a $10,000-$20,000 cost.”

More frustrating are the surprises and delays. Towns can adopt new codes anytime, and builders don’t necessarily find out about them until construction has begun.

“We get into building stuff and the plans are approved, and then we’re ready for our first inspection and all of a sudden we’ll find out that local jurisdictions have some other requirements that we haven’t done and we didn’t even know about it,” Blanc said. “It causes project delays.”

And every delay adds to the cost of a project.

“When we have guys standing around not producing, it gets very, very expensive in a hurry,” Blanc said.

Even small builders can have projects in multiple towns at once. The variations can be a planning nightmare.  

“When you have it for 10-12 projects going on, it really adds up,” Blanc said.

That’s why New Hampshire builders are keeping a close eye on House Bill 428 and Senate Bill 94, companion bills that would forbid municipal amendments to the state building code. 

SB 94 was retained in the House Executive Departments and Administration Committee this week in the hope that the Senate would agree to pass HB 428. The House amended HB 428 one to allow local variations in administrative procedures, but not the technical substance of the code. 

Building codes are not the same as land use regulations (zoning rules). A building code is a set of minimum standards for building construction. Local governments often adopt amendments that set higher standards than the state code. And those aren’t always for safety reasons. Extreme energy efficiency standards are a trendy local code enhancement which can push already high home prices out of reach even for upper-middle-class families. 

“It tends to be things that some member of code enforcement heard about at some convention and thought it was a great idea and the town implemented it,” Blanc said.

Because the purpose of building codes is to establish minimum safety standards, the case for local boutique additions is not strong. A building code is a highly technical set of regulations of structural and electrical engineering. Allowing local variations does not enhance individual freedom, but limits it. The only enhancements localities can make are additional restrictions on top of basic safety standards.

As Matt Mayberry, executive director of the New Hampshire Home Builders Association, said in a Senate hearing this month, “I put my trust in 424 individuals to make those policy decisions for our state of New Hampshire versus a five-member town council or select board, who may be more socially driven than policy driven.” 

The National Multifamily Housing Council and the National Association of Home Builders estimate that regulations account for 40.6% of the cost of multifamily housing and that changes in building codes in the last decade are the single largest contributor, accounting fro 11.1% of costs.

Switching to a statewide standard building code would lower costs and speed development times for both residential and commercial development. And it would eliminate one of the advantages Massachusetts has over New Hampshire.

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Legislature moves 15 housing bills in one day

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New Hampshire’s housing shortage, and the price spike that it created, has made housing the No. 1 problem facing the state, according to University of New Hampshire polling. Fixing the state’s housing shortage is such a priority for voters that a 2024 UNH poll found more than 1/3 of voters rating it as the top problem, with the No. 2 problem a full 29 points behind. In response, the state House of Representatives has created a standing Committee on Housing to deal with the issue. 

Forty-eight housing-related bills have been introduced to the House Housing Committee (22) and Senate Commerce Committee (26) this session. Nearly 1/3 of those bills were considered by the House and Senate on Thursday, March 20. 

Below is a brief summary of each of those 15 bills. Eight were placed on the consent calendar, which means they received unanimous votes out of committee. (One was pulled off the House consent calendar Thursday morning.) To give the reader a sense of how the committees prioritized each bill, we list them by their position on the calendars. We also include how each chamber voted on each bill.

Thursday’s action suggests that legislators have gotten the message that voters want action to increase the supply of housing, and they want it now. 

 

SENATE

Consent Calendar

  • Senate Bill 90, allowing high-density residential development on land zoned for commercial use. Re-referred to committee. 

SB 90 defines a “high density residential zone” as one that allows at least 20 residential units per acre, and it adds to RSA 674 the requirement that “municipalities shall allow high-density residential development on land zoned for commercial use, provided that adequate infrastructure, including roads, water, and sewage systems, shall be available or provided to support the development.” 

  • Senate Bill 170, relative to development and related requirements in cities, towns, and municipalities. Passed by voice vote. 

SB 170 incorporates multiple proposals into a single bill. It:

  1. Prohibits municipalities from mandating that occupants of housing units be related by blood or marriage;
  2. Prohibits cities, towns, municipalities, and counties with unincorporated places from mandating more stringent test-pitting requirements for septic systems and more stringent well-siting requirements than the Department of Environmental Services does;
  3. Prohibits municipalities from imposing maximum road lengths to impede development, provided that the proposed roadway or extension complies with the state fire code;
  4. Prohibits municipalities from capping the number of housing lots on dead-end streets; 
  5. Requires municipalities to permit utilities (including septic systems, wells, electric systems, drainage structures, and other utilities) to be placed in open spaces or perimeter buffers of subdivisions as applicable; provided that such open spaces or perimeter buffers are not wetlands or shoreland areas protected by RSA 483-B;
  6. Requires municipalities to stamp and accept changes to plans within three days, after an initial review, when requested by that city, town, or municipality, provided the developer has made the requested alterations based on the initial planning board review; 
  7. limits road frontage requirements and setbacks for lot lines to no more than 50 feet.
  • Senate Bill 173, relative to residential property subject to housing covenants under the low income housing tax credit program. Passed by voice vote.

Rent-restricted residential housing enrolled in the Low-Income Housing Tax Credit Program can be assessed under state law in one of two ways. It is either taxed at 10 percent of income generated by the property, or subject to the following formula:

“The assessed value shall be calculated using an income approach whereby the net operating income is divided by the overall capitalization rate and, except when the municipality has updated its assessment values to equate to market values, multiplying that value by the previous year’s equalization ratio.”

SB 173 eliminates the formula so that the simpler 10% tax will be used. Because it eliminates a complicated formula inconsistently applied by municipalities, it has the support of assessors, municipalities and developers. 

  • Senate Bill 175, relative to the use of covenants by municipalities. Re-referred to committee.

SB 175 would prohibit municipalities from “requiring or encouraging the establishment of covenants as a condition of any zoning or land use approval.” Existing covenants created by landowners or homeowners associations would be grandfathered. The Senate Commerce Committee concluded that the bill needed more work and recommended that it be sent back to committee.

  • Senate Bill 281, relative to property adjacent to Class VI roads. Passed by voice vote.

SB 281 allows homes on class VI roads if the property owner signs a waiver acknowledging that the road is not maintained and the municipality is not responsible for damages. Buildings on the property also must be insurable. A Class VI road is an unmaintained road.

  • Senate Bill 282, relative to stairway requirements in certain residential buildings. Passed by voice vote.

SB 282 allows multifamily buildings of up to six stories to be built with a single staircase, provided certain safety requirements are met.  Mandates for dual staircases increase building footprints and costs. Single staircase designs are common in most of the rest of the world, at heights considerably taller than six stories. 

  • Senate Bill 283, relative to the calculation of floor-area-ratios under local building ordinances. Passed by voice vote.

SB 283 exempts below-grade ares from the calculation of floor area ratios. Floor area ratios are the portion of floor area of a building relative to the size of the parcel of land. Municipalities use floor area ratios to limit how large a building can be relative to its lot size.

Regular Calendar

  • Senate Bill 84, relative to zoning procedures concerning residential housing. Passed 13-10. 

SB 84 caps minimum lot sizes at 2 acres in areas not served by water or sewer, 1.5 acres in areas served by water only, and half an acre in areas served by both water and sewer. 

  • Senate Bill 163, repealing the temporary moratoria and limitation on building permits and the approval of subdivisions and site plans. Passed by voice vote.

SB 163 repeals the portion of state law allowing municipalities to impose temporary moratoria on the issuing of building permits or on the approval of subdivisions and site plans.

  • Senate Bill 174, prohibiting planning boards from considering the number of bedrooms a given unit or development has during the hearing and approval process. Passed by voice vote.

SB 174 prohibits planning boards from favoring or disfavoring housing proposals based on the number of bedrooms per unit.

  • Senate Bill 284, relative to the required maximum number of residential parking spaces. Passed by voice vote.

SB 284 prohibits municipalities from requiring more than one parking space per housing unit, with one exception. Workforce housing developments with studio and one-bedroom units of fewer than 1,000 square feet can be required to have 1.5 parking spaces.

 

HOUSE

Regular Calendar

  • House Bill 351, requiring landlords to give tenants of at-will tenancies at least 60-days notice to evict. Tabled.

HB 351 would require landlords to give tenants who are on at-will leases at least 60 days notice before eviction. 

  • House Bill 558, creating a public county registry of the monthly rent charged by landlords for each owned unit and prohibiting landlords from using algorithms or software to determine rental rates. Voted inexpedient to legislate on voice vote.

HB 558 would require county registers of deeds to create an annual registry of rents charged in the county and prohibit landlords from using algorithms or software to determine rental rates.

  • House Bill 628, prohibiting landlords from discriminating against prospective tenants holding certain vouchers under the housing choice voucher program. Voted inexpedient to legislate on a 213-152 vote.

HB 628 requires landlords to rent to anyone enrolled in the Housing Choice Voucher Program (federal Section 8 vouchers).

  • House Bill 631, permitting residential building in commercial zoning. Passed 204-134.

HB 631 would allow multi-family housing on commercially zoned land, provided the infrastructure (such as water and sewer) is available.

Download this policy brief here: JBC Policy Brief 15 Housing Bills in One Day

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Legalizing residential uses in commercial zones can strengthen N.H. communities

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In many areas of New Hampshire it is literally illegal for shop owners, employees and customers to live in an apartment above or next to a business. Yet places that do allow such mixed uses are among the most vibrant and desired areas in the state, for both businesses and residents. 

As state and local officials consider ways to create more housing and improve the economic and social life of New Hampshire communities, legalizing residential housing in existing commercial zones offers an easy and harmless way to do both. 

Portsmouth regularly shows up on lists of New Hampshire’s and America’s most beautiful towns. In 2016, National Geographic speculated that it “might be America’s greatest small town.” It isn’t just the colonial architecture. It’s the vibrancy. In Portsmouth, living above or adjacent to shops, restaurants, taverns and coffee houses has been common for much of the community’s four centuries. 

Before the rise of automobiles and industrialization, towns and cities generally weren’t separated into residential and commercial areas. Almost everyone worked within walking distance of their homes, and many operated shops from their homes. Cities and towns as old as Portsmouth and Exeter offer a window into this pre-zoning past. And they  offer insights into the value of allowing residential development in commercial zones. 

No tourists, shoppers or diners come to Portsmouth—or any other town— to marvel at the residential subdivisions created by 20th century zoning ordinances. Strip malls in exclusively commercial zones attract shoppers who pop quickly in and out, but not tourists and residents seeking to experience the charm of an old New England town. People flock to mixed-use zones to enjoy a thriving community, a place brought alive by the mix of residential and commercial activity in one compact area. 

Municipal bans on residential uses in commercial zones outlawed the creation of new communities like those found in downtown Portsmouth or Exeter. Only by lifting those bans can New Hampshire towns and cities recreate these lost places. 

Instead of protecting homeowners from encroaching businesses, these bans “protect” businesses from encroaching residents. Yet this “protection” actually harms businesses, residents and communities. Ending these misguided municipal bans would provide much-needed infill housing while reinvigorating communities.

Property values

A major misconception commonly used in defense of banning residences in commercial zones is that the strict separation increases property values. The opposite is true. Commercial real estate professionals have recognized for years that commercial properties close to residential properties tend to be more valuable, not less.  

Residential properties also tend to command higher prices when located closer to economically active commercial areas. Contrary to popular belief, housing built near an economic activity center is significantly more valuable. (A 2022 study found a 26% price premium for housing built near activity centers in 2/3 of cities studied, and a 50% premium in a few high-growth cities.) 

As a general rule, mixing residential uses into commercial zones increases the value of both types of properties. These higher values are a result of higher demand. Many people want to live close to shops, restaurants, nightlife and other “third places” where they can build social and economic connections.

Safety

Half a century ago, author Jane Jacobs noticed that crime in U.S. cities seemed to be lower in neighborhoods that enjoyed more activity in public spaces. Her “eyes on the street” theory held that more people on the streets, or watching from shops and homes, deterred crime. 

This is a widely accepted view, though research is limited. But some researchers have found the theory to hold up under testing. 

A 2013 study of crime in Los Angeles found that “single-use commercially zoned blocks in Los Angeles have crime rates that are 45 percent higher than similar blocks that include residential uses.”

A 2017 study of zoning and crime in Chicago found that commercial areas with higher-density housing were associated with lower crime rates. “Zoning which allows for mixed use structures may be preferable to more restrictive rules that aim for solely residential or commercial use,” the author concluded.

Opposition to legalizing housing in commercial zones often comes from the assumption that new residential units will be high density developments aimed at low-income renters, and will therefore reduce property values and increase crime. On the contrary, because this type of housing is in high demand, it is typically not targeted at low-income renters. That doesn’t mean it will raise overall rents. Mid-range and higher-priced rentals attract people who leave lower-priced units, freeing those units for people with smaller budgets. This filtering effect is why the construction of additional housing units, even at the luxury end of the market, brings down overall rents over time. More supply lowers prices.

Community 

The American Planning Association recommends mixed-use zoning as a way of improving community health and vibrancy. “Mixed-use development provides a variety of environmental, economic, social, and health benefits that can align with existing community priorities, including increasing physical activity,” the association writes.

Far from harming communities, mixed-use development brings numerous benefits. Legalizing residential uses in commercial zones is a way to generate those benefits without imposing costs on existing residential neighborhoods. Because housing is being added to commercial areas, not vice versa, there are no concerns about bringing commercial activities into residential neighborhoods. 

When the Ioka Theater in downtown Exeter closed, it left a void on Water Street. This year, the renovated building is back to life as a mixed-use space anchored by eight condominiums. With demand for office and commercial space still down after the pandemic, the housing portion of the redevelopment was important. All but one of condos sold before the coffee house opened in December, according to the Union Leader. The restaurant and retail space were unfilled at the start of this year. Had the town not allowed housing above the shop and restaurant space, the redevelopment might never have happened. 

By giving property owners multiple streams of revenue, mixed-use zoning serves as a hedge against downturns in commercial and office markets. A building zoned exclusively commercial is at a higher risk of becoming completely vacant than one zoned for both commercial and residential uses. Vacant buildings bring down property values, increase crime rates and fracture communities. Mixed-use zones reduce the risk of building vacancies while bringing people closer together. 

Mixing residential uses into commercial zones also creates more walkable places where businesses and customers mutually benefit from their close proximity to each other. It can reduce traffic congestion, commute times and feelings of isolation.

Conclusion

The colonial downtowns that make Portsmouth and Exeter iconic New England towns were once common throughout New Hampshire. Downtown Concord and Manchester also represent attractive, popular mixed-use districts that developed before zoning separated residential and commercial activities. These are the kinds of vibrant community centers that zoning made it difficult to recreate elsewhere. 

A century after New Hampshire gave local governments the power to separate land by use, it’s clear that municipalities took that authority too far. A power created to keep industrial activities out of residential neighborhoods has been used to keep neighborhoods from popping up in commercial areas. That makes no sense.

There simply is no public health or safety justification for creating commercial-only zones. As long as adequate infrastructure exists to support housing, its inclusion in commercial areas harms no one while creating numerous benefits. 

The benefits of legalizing residential uses in commercial zones include strengthening property values, providing additional housing, increasing economic activity, lowering crime rates, creating a hedge against contractions in the commercial and office markets, and building stronger communities. These are all things elected officials say they want. If they really do, adding residential uses to commercial zones would help.

Download this policy brief here: JBC Policy Brief Residential in Commercial

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Ending mandatory vehicle inspections would save Granite Staters tens of millions a year

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In a cost-cutting move, New Jersey ended its annual auto safety inspections in 2010. State officials cited a lack of evidence that inspections improved public safety. 

“If we’re going to invest millions of taxpayer dollars year after year in a program, then it is essential that we be able to justify the expense and effectiveness of said program,” then-Motor Vehicle Commission Chief Administrator Raymond Martinez said. “With a lack of conclusive data, and the current fiscal crisis, we cannot justify this expense.”

Eight years later, the journal Contemporary Economic Policy published a study on the effects of ending New Jersey’s inspections. It concluded that “discontinuing the law resulted in no significant increase in either fatalities due to car failure or the percentage of accidents due to car failure.”

The lead author, a professor of health economics, noted that technological advancements in the seven decades since the passage of New Jersey’s inspection law had produced enormous gains in auto reliability. With cars dramatically safer than in past decades, states have been rethinking their safety inspection requirements. 

New Hampshire is one of a dwindling number of states that requires an annual safety inspection, which makes New Hampshire’s law one of the most burdensome in the country. 

Lawmakers have tried for years to abolish the mandate, citing the cost burden on drivers and the shortage of evidence that inspections improve public safety. But in years past, auto dealers and independent mechanics have persuaded legislators to continue mandating what is a lucrative income stream for them. 

That could change this year. The House on Thursday approved by a wide margin (212-143) House Bill 649, which would lift the safety and emissions inspection mandates from state law. 

The rising quality of automobiles is reflected in vehicle fatality data. Motor vehicle fatalities per 100,000 people peaked in 1937, according to data compiled by the National Safety Council. By raw numbers, U.S. motor vehicle fatalities peaked in 1972. 

Research on the effectiveness of auto safety inspections is mixed but predominantly finds that inspections do not produce significant improvements in safety.

  • A study just last year of Danish auto inspections and crashes published in the journal Traffic Safety Research “found no association between periodic inspections and crash risk in separate analyses of each vehicle type. There were no specific effects of inspections of older vehicles aged 10 years or more.” It also noted that “based on previous research, the positive effects on crash risk are questionable.”
  • A 2021 Spanish study reviewed existing research on inspections and crashes, finding only one study producing “a significant association between road crashes and the absence of a valid vehicle inspection certificate,” while “the other studies showed either a small reduction in crash rates (around 9%), no association, or a higher crash rate in vehicles with more inspections.”
  • A 2015 Government Accountability Office report could find no causal relationship between safety inspections and accidents. “Despite the consensus among the state inspection program officials we interviewed that these programs improve vehicle condition, research remains inconclusive about the effect of safety inspection programs on crash rates. There is little recent empirical research on the relationship between vehicle safety inspection programs and whether these programs reduce crash rates. What is available has generally been unable to establish any causal relationship.”
  • North Carolina commissioned a study of its annual auto inspection program, and the 2008 report concluded that “no evidence exists showing the safety inspection program is effective” despite North Carolinians spending $141 million a year on inspections.
  • A 1999 study in the Southern Economic Journal “found no evidence that inspections significantly reduce fatality or injury rates.”
  • A 2023 study published in the Journal of Transportation Engineering did find 5.5% fewer highway fatalities in states that had safety inspections, but this result stands out as strikingly different from the norm. 

As many researchers have noted, cars today are very different from those made in the 1930s, ‘50s, ‘70s, or even ‘90s. Fifty years ago, it was common to see broken down cars along U.S. roadsides every day. In 2025, a disabled vehicle is a fairly uncommon sight. 

The massive advances in automobile reliability and safety have rendered state safety inspections difficult to justify. The National Highway Traffic Safety Administration lists vehicles as the critical factor in just 2 percent of motor vehicle accidents. And even then it takes care to note that “none of these reasons implied a vehicle causing the crash.” 

There were 1,383,700 vehicles registered in New Hampshire in 2023, according to the U.S. Department of Energy, which collects vehicle data. At between $30-$50 per vehicle, inspections alone likely cost Granite Staters approximately $41.5 million to $69.2 million a year. That doesn’t count any repair work required to pass inspection.

All of this is to comply with a law that has not been shown with confidence to produce measurable improvements in motorist safety.  

Given the massive expenses imposed on motorists and the negligible gains, if any, ending mandatory inspections could be expected to generate a significant financial savings for New Hampshire motorists.  

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Addressing excessive residential lot size regulations

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Imagine that you’ve just graduated high school or college, you’ve landed an entry-level job, and you need a car. What’s on your car shopping list?

It’s your first job, so you’re probably looking for a cheap car, and smaller cars are cheaper to buy and maintain than larger ones.

So you start shopping. To your surprise, you find zero small cars for sale. It’s all full-size SUVs and pickups as far as the eye can see. You ask a salesman where to find the coups and sedan.  

Oh, he’d love to sell you a small car, he says, but he can’t. Every town in the area has a “minimum chassis size” ordinance. They require every vehicle to be at least 16 feet long by 6.5 feet wide. 

But you don’t want a Chevy Tahoe, you protest. You don’t need a big SUV. You don’t have a big family, or even a dog. You just want a small hatchback that’s good on gas. Why would the town make you buy a larger car than you need?

Oh, that’s easy, he says. Town character. 

It’s a family community. If the town let dealers sell small cars, why, young, single people might move there. The character of the town could change. People like the town just the way it was when they moved in. So, no small cars.  

Absurd, right?

Well, replace automobiles with housing in that tale, and you’ve got the status quo throughout New Hampshire. 

To quote the New Hampshire Zoning Atlas created by St. Anselm College, “it is hard to find land to build small homes or starter homes in an economically viable way.” Only 15.7% of the buildable area in New Hampshire allows homes to be built on less than one acre of land with less than 200 feet of frontage.

These mandated large lots are rarely directly related to public health or safety, which makes them legally suspect.

RSA 674:16 grants local governments the power to use zoning “for the purpose of promoting the health, safety, or the general welfare of the community….” 

“General welfare” is vague, but surely it doesn’t include raising the cost of buying a home in town.

When creating a minimum lot size mandate, there are two questions to ask.

  1. What public health, safety or welfare problem does this solve?
  2. How much land does a home require?

The answer to the first question most often is: none. This is especially true in municipalities served by water and sewer infrastructure. A tiny home on a tiny lot harms no one. Small house lots harm no one. 

Large lot size mandates do harm people. They raise the cost of land and homes, pricing many people out of the housing market.

The answer to the second question is: not much.

Two bills in the Legislature would fix lot size inflation by prohibiting local governments from mandating large lot sizes that aren’t directly connected to public health or safety metrics. House Bill 459 and Senate Bill 84 vary in the details, but both would tie minimum lot sizes to legally justifiable standards.

SB 84, facing a Senate vote this week, would cap minimum lot sizes at 1.5 acres in areas with no municipal water or sewer service, one acre in areas with municipal water, and 0.5 acres in areas with municipal sewer service. 

Minimum lot sizes that are larger than 0.5 acres for properties with water and sewer hookups, or larger than basic environmental standards for single-family homes based on soil conditions, serve only one purpose: to raise housing costs. And in that they are extraordinarily successful. 

Large minimum lot sizes have been shown to increase lot sizes, home sizes and home prices. And these government-created price increases spill over into neighboring jurisdictions. 

Tighter regulations spread through adjacent municipalities in a zoning arms race that reduces home construction and raises prices throughout states and regions. That’s a big reason why legislators are intervening. The cumulative effect of these local restrictions is a statewide housing shortage.

Maine has roughly the same population as New Hampshire (1.405 million vs. 1.409 million). Yet Maine has almost 106,000 more housing units than New Hampshire does. As a consequence, its median home value from 2019-2023 was $100,000 lower than New Hampshire’s. As of this January, the median sale price for a home in Maine was $412,200 vs. $493,800 in New Hampshire. 

The median size of a home in New Hampshire is 1,869 square feet, according to Federal Reserve data. The median size in Maine is 1,669 square feet. 

It shouldn’t be harder to buy a smaller, more affordable home in New Hampshire than in Maine. Ending the abuse of lot size ordinances would be an effective way to begin fixing this disparity. 

There is huge market demand for smaller homes on smaller lots. In places where these options are legal, developers have responded. Census data show a decline in new home sizes since 2022, as the chart below from real estate website Keeping Current Matters shows.

In 2013, 36% of new homes in the United States were built on a lot of 7,000 square feet or less. By 2023, it had risen to 46%, according to U.S. Census figures. 

The average size of a newly built home is slowly shrinking. It has fallen from 2,535 square feet in the second quarter of 2022 to 2,375 square feet in the second quarter of 2024. 

The demand for smaller homes is clear, and the market is trying to respond. But municipalities are slowing the transition, particularly in the Northeast. 

In the South, 53% of homes sold in 2023 were smaller than 2,400 square feet. In the West and Midwest it was 60%. In the Northeast it was just 46%. That’s not entirely caused by zoning, but zoning is a factor. 

Nationally, 26% of home buyers want a home less than1,600 square feet, but only 16% of single-family homes started in 2023 were that small, according to the National Association of Home Builders. 

There’s a mismatch between demand and supply, and that mismatch is driven in large part by minimum lot size requirements. Smaller legal lot sizes would facilitate the creation of the smaller homes that consumers demand. 

In many places, including most of New Hampshire, it’s literally illegal for builders to construct a home on a lot smaller than an acre.

Minimum lot sizes that exceed basic public health and safety standards artificially reduce the supply of housing, drive up home prices, separate families by forcing the elderly and young to move out of town, worsen sprawl and traffic congestion, and encourage overdevelopment by forcing builders to develop much larger footprints to house people who could live comfortably on smaller lots.

Smaller lots allow for smaller, more affordable homes. Municipalities have shown that if they have the power to use minimum lot sizes to prohibit small homes on small lots, they will. The abuse of this power has created numerous economic problems for New Hampshire and has helped to put the classic American starter home out of reach of young Granite Staters. 

If the state wants to prevent these abuses from continuing, the quickest option is to limit the power of local governments to commit them.

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Why NH might make limited social drinking legal in some public places

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The American Prohibition Museum is not in Chicago, but tucked into an old brick building in Savannah, Ga., just off Congress Street. A $29.91 ticket to the museum comes with a drink at the adjacent speakeasy. In most American cities, that would be a perfect finish to a trip through the Prohibition era. Not in Savannah. The garnish on the cocktail is what you can do with that drink after it’s poured. 

Old fashioned or martini in hand, you can legally step outside and stroll through the historic district. Not even Elliot Ness can stop you.

Savannah allows outdoor drinking in its historic district, provided the drinks are in 16-oz. plastic cups. The city promotes this social perk. It’s an attraction for tourists, including Granite Staters who can pop down on a cheap flight. 

Like the rest of the original 13 colonies, New Hampshire has plenty of historic districts and beautiful downtowns. But it doesn’t have a single social district where outdoor drinking is allowed. 

That could change this year. 

Since the pandemic, unreasonable alcohol regulations have been lifted in states across the country. The changes helped boost local economies and keep bars and restaurants open. These deregulation efforts were so popular that states have looked for other laws to relax. The hottest trend is to allow local governments the option of creating social districts where drinking in public is allowed under certain tightly regulated conditions. 

Rep. Bill Boyd, R-Merrimack, has introduced House Bill 467 to let local governments create social districts in New Hampshire. Boyd modeled his bill on legislation that North Carolina passed in 2021.

Before North Carolina adopted its social district law, the foothills city of Hickory was working to attract more business to its downtown core by legalizing outdoor drinking just in that zone. In 2019, the city applied for and got what was called a common area entertainment permit. It was not quite what city leaders had in mind.

The city had to get a state liquor license, which meant that city staff had to pass background checks and get fingerprinted. The city had to be the license holder. When the city hosted its own events, drinking was restricted to the roped-off footprint of the event space. 

This tiny alcohol containment zone reduced the economic benefits of the event. The whole point was to draw people downtown to patronize businesses. But because people couldn’t carry their drinks across the square, they’d often stay in the roped-off area the entire time, then go home, city Business Development Director Dave Leonetti said in an interview.  

After the social district law passed, Hickory created one for its downtown in 2023. Traffic to the downtown core is up 16.8 percent over the last three years, Leonetti said. The social district has helped turn downtown into a regional magnet for shoppers and diners. 

With the social district, people come downtown to hang out, not just to shop. Locals come just to sit outside and play cards or meet friends and pop into local shops and restaurants. The creation of the social district itself has changed the way people interact with the downtown area. It’s increased foot traffic, sociability and business. 

In fact, business activity is expanding beyond the old downtown district. Restaurants have opened in warehouse buildings just outside of the traditional business area, increasing economic activity and tax revenue for the city.

“It’s been a great boon for downtown,” Leonetti said.

And the city has seen no increase in trash or crime downtown since the district’s creation, according to Leonetti. 

A few hours up I-40, Raleigh’s nightlife and entertainment district attracts a lot of visitors. But city leaders wanted more foot traffic in its downtown core. So the city created a social district there, like Hickory did. 

The Raleigh Downtown Alliance did a survey to gauge the popularity of the social district. Rachel Bain, hospitality and nightlife planner for the City of Raleigh, said “it was the best survey response they’d ever received. It got a higher rating than the Christmas tree lighting.”

The social district has helped to increase in foot traffic and business to the downtown, but it’s led to no increase in crime, intoxication or littering, Bain said.

At least eight states have adopted statutes allowing municipalities to create districts where it’s legal to drink alcoholic beverages in public spaces. The laws typically restrict open containers to materials other than glass, usually plastic cups. Stickers or other labels are required, and drink limits are enforced. Drinks cannot be carried outside of social district boundaries, which are marked with prominent signs. Maps of the district boundaries are posted online, and businesses can decide whether they allow customers to enter with outside drinks. 

Concerns about trash and public intoxication have not materialized, Leonetti said, because the regulations discourage both and the crowd that is attracted to a social district is not the crowd that wants to stumble down Bourbon Street at 3 a.m. 

“Before the social district, it was illegal to brown bag your bottle of liquor, to throw everything in a Yeti cup, to be drunk in public,” he said. “All of those things that were illegal are still illegal. This just gives the people who want to follow the rules a way to do it.”

Among the rules that municipalities get to set are drinking hours. Raleigh sets hours from 10 a.m. to 10 p.m. so they’re consistent every day and they cover Sunday brunch. Raleigh also excludes city parks from its district.

Michigan adopted a social district law in 2020. The Detroit News reported last August that municipalities have adopted 128 social districts, inducing 27 in Detroit alone. Detroit’s social districts were part of the appeal when the city hosted the NFL draft last year.

“Business owners inside several districts said they’ve seen nothing but positive effects, and it has encouraged new customers to come to their communities, serve patrons even when their dining rooms are full and encourage people to stay awhile,” the newspaper reported. “Some said these districts are even playing a role in revitalizing downtowns that may not have gotten as much foot traffic before.”

In Clawson, Michigan, officials credit the social district with reviving their downtown.

“Eight years ago, you might not see anybody walking downtown,” Joan Horton, director of Claswson’s downtown development authority, told the News. “People drove through Clawson to get somewhere else. But now we’re a drive-to destination. We really have become a dining mecca.”

HB 467 would enable New Hampshire municipalities to use social districts as targeted economic development tools. No New England state has a social district law. But Boston officials last year began discussing social districts for the city. 

That puts New Hampshire lawmakers in the position of deciding in coming weeks whether they want New Hampshire or Massachusetts to become the first New England state to notch another small win for personal and economic freedom by legalizing small districts where responsible adults can be trusted to drink and socialize like responsible adults. 

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Right-to-work facts vs. myths

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Most U.S. states (26) have a right-to-work law. They’ve proven effective at expanding worker freedom and improving state economies, which has made them popular across most of the country. But they have yet to expand into the Northeast, which now has lower economic growth than the South. If New Hampshire becomes the 27th state to adopt a right-to-work law, and the only one in the entire Northeast, the state instantly would become more attractive to manufacturers, many of whom won’t even consider opening a shop in a state without a right-to-work law. 

Though New Hampshire prides itself on being a pro-business, pro-growth state, especially relative to its neighbors, it has yet to adopt a right-to-work law. The biggest obstacle has long been a widespread belief in several myths about right-to-work laws. This briefing paper explains why those myths are untrue. 

Myth 1. Right-to-work laws are anti-freedom

Labor leaders claim that the existing legal framework governing organized labor is the organic outgrowth of the free market. The current rules represent freedom, and a right-to-work law, they say, equals “government interference in the private sector of the free market.”

This is Orwellian doublespeak. The National Labor Relations Act (NLRA), which mandates that a certified labor union be the sole representative for all employees in a collective bargaining unit, is hardly the free market at work. It is by definition government interference in the private sector. Union leaders claim simultaneously that this arrangement equals “freedom” and that they are burdened by a federal mandate to represent all workers regardless of union membership. One of those could be true, or neither could be true. But both can’t be true. 

In reality, the NLRA imposes a legal framework that favors unions over workers by allowing labor contracts that compel non-members against their will to contribute financially to unions. The law used to allow contracts to force non-members to pay full union dues. Unions claimed that even their political spending was essential and therefore non-members should be forced to fund it. In Communication Workers of America v. Beck (1988), the Supreme Court held that compelling non-members to pay full union dues violated their First Amendment rights. Since then, private sector union contracts have been allowed to collect from non-members only the fees directly related to collective bargaining and representation. 

But this too is a violation of an individual’s First Amendment rights to free association and free speech. Unions negotiate benefits all the time that individual workers might not want, or that might even harm them. A contract that increases pension benefits at the expense of higher wages hurts young workers who don’t intend to spend a career at that employer. Non-members must pay for these negotiations, even if they disagree with the union position. That’s a plain First Amendment violation. 

If union leaders really wanted workplace contracts to be free from government intervention, they’d advocate abolishing the NLRA. They don’t because the NLRA is a government intervention that restricts worker freedom to the benefit of labor unions. 

Right-to-work laws are a corrective to this. They restore workers’ rights to not associate with an organization that they don’t want to support. In right-to-work states, unions cannot forcibly take money from non-members. To get that money, they have to persuade non-members to join. Persuasion is how free people exchange goods and services in a free economy. Coercion is the opposite.  

Myth 2. Right-to-work laws create freeloaders

We addressed this claim in January. Union leaders claim that their negotiations and representation are behaviors that only benefit non-member workers. This is demonstrably untrue. Union leaders negotiate contracts or take positions in labor disputes that do not always benefit their own members, much less non-members.

Giving up your right to bargain on your own behalf means sacrificing your autonomy as an employee. By handing those powers to union leadership, a worker trades independence for dependence. His compensation is no longer determined by his own individual performance, but by his status as a member of a larger group. That tradeoff can make one better off. Or it can backfire. 

Union contracts that favor seniority over merit disadvantage young, ambitious workers, for example. 

A 2024 Ford Motor Co. survey found that only 33% of American Baby Boomers would take a 20% pay cut in exchange for a better quality of life, but 60% of Millennials would. A young employee who would gladly exchange a lower wage for more flexible hours is made worse off by a union contract that makes the opposite trade. 

In 2009, Gov. John Lynch had to cut $25 million in labor costs from the state budget. He offered rotating furloughs to workers so no one would have to be fired. The State Employees Association said no, choosing layoffs instead. The governor laid off 250 state employees. They clearly were made worse off by the union leadership’s inept negotiations.

Far from creating freeloaders, right-to-work laws restore a measure of financial autonomy to workers. Unions in right-to-work states can no longer behave as monopoly providers, but must convince non-members to join. That changes their behavior and makes them more responsive to the needs and preferences of all members of a bargaining unit. Introducing this market incentive is the only way to improve the percentage of workers who will actually benefit from union representation.

Myth 3. Right-to-work laws would hurt the state economy

Union leaders claim that right-to-work laws are economically harmful. The exact opposite is true.

A 1997 University of Minnesota study found “a large, abrupt increase in manufacturing activity” associated with the adoption of right-to-work laws. “Manufacturing employment in the states without right-to-work laws is virtually the same today as it was in 1947,” the study found. “In the right-to-work states, manufacturing employment has increased 150 percent.”

A 2013 Mackinac Center for Public Policy study found that right-to-work laws increased average real personal income growth, average annual population growth and average annual employment growth. 

A 2023 Federal Reserve study found that right-to-work laws were associated with increases in job openings and employment. 

A 2021 Harvard University study found that right-to-work laws increased employment to population ratios (the percentage of the working-age population who are employed), increased manufacturing employment (by 28%), increased total employment, increased labor force participation, reduced poverty (especially childhood poverty), increased upward mobility and reduced long-term joblessness.

Were New Hampshire to become the only right-to-work state in the Northeast, the economic literature suggests that we would reap measurable economic benefits, including a significant increase in manufacturing employment.

Myth 4. Right-to-work laws are about “union busting”

Labor leaders claim that the real motive behind right-to-work laws is to destroy unions. But why would letting people choose where to spend their own money destroy the institution that currently takes their money involuntarily?

That could happen only if nearly everyone flees labor unions as soon as they get the chance. Why would they do this if those institutions offer the level of value that their proponents claim? Obviously, they wouldn’t. And we have plenty of evidence that this doesn’t happen.

Union membership has been shown to decline initially after adoption of a right-to-work law. This suggests that a lot of workers think that the benefits of membership aren’t worth the costs. Unions can address this by competing harder for members. 

The 2018 U.S. Supreme Court decision in Janus v. AFSCME made compulsory agency fees illegal in the public sector. With right-to-work implemented across all government workplaces in the country seven years ago, we have a national test case. Though public sector union membership declined, the unions have not disappeared. Some, including the State Employees Association of New Hampshire, have made changes to attract new members and have successfully negotiated large pay increases.

Neither the goal nor the effect of right-to-work laws is to destroy unions. The goal is to restore the individual worker’s constitutional right to free association and free expression. The effect, demonstrated through decades of research, is to create more employment, particularly in manufacturing, and generate more economic growth.

Myth 5. Right-to-work laws are unpopular

Labor leaders have a neat trick to make politicians think their anti-right-to-work position is popular. At public hearings on right-to-work bills, they pack the room with union members, giving the impression that the public opposes right-to-work. But when the issue is polled, a very different result emerges.

We polled this issue in 2021. We asked New Hampshire voters whether they would “be in favor of changing the law so that employees who don’t want to join a union could choose not to pay union fees.” More than 2/3 of voters (68%) said they favored a right-to-work law. Even among Democrats, more favored than opposed right-to-work (44%-41%). Republicans broke in favor of right-to-work by a margin of 88%-6%, and unaffiliated voters favored it by a margin of 73%-18%.

Right-to-work support in N.H.

All voters: 68% support, 22% oppose

Republicans: 88% support, 6% oppose

Democrats: 44% support, 41% oppose

Independents: 73% support, 18% oppose

Those are overwhelming numbers in favor of right-to-work. Nationally the figures are even better. Last year, the National Right to Work Foundation polled registered voters on this question: “Do you agree or disagree with the following statement: Workers should never be forced to join a union or pay dues to a union as a condition of employment.” Voters favored right-to-work by 82%-10%. Republicans favored it by 86%-8%, Independents by 80%-6%, and Democrats by 76%-14%. 

Right-to-work support nationally

All voters: 82% support, 10% oppose

Republicans: 86% support, 6% oppose

Democrats: 76% support, 14% oppose

Independents: 80% support, 6% oppose

Far from being a political liability, support for right-to-work legislation puts lawmakers on the side of supermajorities of voters.  

Conclusion

Right-to-work laws have been studied for decades. Research shows mixed results on some points, clear results on others. What’s become evident over the decades is that right-to-work laws are associated with statistically significant gains in employment, particularly manufacturing employment, job opportunities, population growth and economic growth. If New Hampshire adopts a right-to-work law, we would expect to see improvements in all of those areas, along with an improvement in state business tax revenues resulting from the additional business activity.

As for freedom vs. coercion, workers have First Amendment rights not to associate with or fund membership organizations that they choose not to join. If workers want to join unions, they should be free to do so. Preferably, they would have the option of joining more than one union (something that current federal law makes difficult). Right-to-work laws create freedom, not freeloaders. And for that reason, they are extremely popular, which is why they have been adopted in a majority of U.S. states. New Hampshire’s economy, and its workers, would benefit if the Granite State becomes the 27th state to protect workers’ First Amendment rights by adopting a right-to-work law.

Download this policy brief here: JBC Brief RTW Facts vs. Myths.

 

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The first four housing reform bills of 2025

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New Hampshire’s housing shortage, and the price spike that it created, has made housing the No. 1 problem facing the state, according to University of New Hampshire polling. Fixing the state’s housing shortage is such a priority for voters that a 2024 UNH poll found more than 1/3 of voters rating it as the top problem, with the No. 2 problem a full 29 points behind. In response, the state House of Representatives has created a standing Committee on Housing to deal with the issue. 

Of the 22 bills referred to the committee, four have been reported out and face a full House vote on Feb. 6. The Josiah Bartlett Center for Public Policy will analyze all 22 bills during this legislative session. Below is our brief analysis of the first four bills to be released for House consideration.

  • House Bill 60, an act relative to the termination of tenancy at the expiration of the tenancy or lease term.

Under current state law (RSA 540:2), a landlord may not terminate a tenant’s lease, even at the lease’s expiration, without cause. The statute lists several causes, including non-payment of rent, substantial property damage, failure to comply with a material term of the lease, behavior that risks health or safety, refusal to vacate for lead paint abatement, or “other good cause.” 

In effect, RSA 540:2 nullifies the time limits on all residential rental contracts. Instead of a one-year lease, the law locks both parties into a permanent lease that can be broken only by bad behavior on the part of the tenant or some other “good cause” that exists outside the terms of the lease and that neither party can predict. 

A lease is a short-term contract in which both parties agree to abide by all stated provisions between the start and end dates. By nullifying the end date of residential leases, RSA 540:2 transfers the use of one person’s private property to another indefinitely, then creates a very limited set of conditions under which the owner can reclaim the use of that property.

This discourages the creation of additional rental housing, particularly duplexes and triplexes. Though the law is a problem for all owners of rental property, it’s particularly tough on individuals and families interested in investing in small-scale rental property. Owners and potential owners of smaller properties that could be put on the market to increase the state’s severely low rental supply are correctly wary of leasing their homes or small investment properties for fear of becoming locked into permanent leases. 

HB 60 fixes this problem simply by recognizing as legally binding the end dates of residential leases. This is a restoration of private property rights that encourage investment in additional rental units.  

  • House Bill 399, establishing a commission to study the New Hampshire zoning enabling act.

HB 399 is probably the most important housing reform legislation of 2025. It establishes “a commission to study the historical evolution of New Hampshire’s zoning enabling act, currently codified at RSA 674:16. The legislative intent is to study the evolution of the New Hampshire Zoning Enabling Act as it turns 100 this year. The goal is to see how the New Hampshire Zoning Enabling Act has changed over time and to consider and make recommendations for future legislation on the balance of zoning powers between the state and municipalities.”

Among the commission’s tasks is to determine whether “the listed powers are still appropriate and/or applicable today, and if any could be removed or if any not present should be added.”

It also would be charged with examining whether the listed purposes of statute that creates local zoning powers are still appropriate or whether any could be removed, and identifying any alternatives to the zoning enabling act.

The Standard State Zoning Enabling Act dates from 1925, and it’s clear that during the last half of its existence, at least, municipalities have used its powers for purposes not strictly aligned with its core purposes of protecting public health or safety and the general welfare. 

The web of regulations spawned by the act has throttled economic growth and left New Hampshire poorer and less vibrant than it would be if not for misguided government interventions, particularly in the housing market. 

The complexity of the problem is a big reason why so little progress has been made despite overwhelming public demand for change. Rather than continue to address each discrete issue one at a time, HB 399 would authorize a comprehensive review, one that is long overdue. A top-to-bottom study of how zoning contributed to the state’s housing crisis, along with recommendations for how to untangle the regulatory web, is likely the only way to achieve comprehensive reform. 

  • House Bill 444, an act relative to a tenant’s right to notification prior to the sale of a multi-family home.

HB 444 would forbid owners of restricted multi-family residential property from closing a final sale or transfer of the property without first giving “60 days’ notice and the opportunity to make an offer to each tenant in the same manner and according to the same procedures required of a manufactured housing park owner in RSA 205-A:21.” 

In short, owners of apartment buildings with five or more units, and owners of more than three single-family rental homes, would be prohibited from selling their rental properties without first giving every renter two months in which to make a purchase offer. 

Owners of mobile home parks face the same restriction under RSA 205-A:21. But there’s a huge difference between apartment renters and mobile home park residents. Mobile home park residents own their homes. They typically rent the land. And they often have associations through which they handle property rental issues. 

RSA 205-A:21 is designed to regulate property sales that involve multiple property owners. That’s not the case with apartment renters. Applying the regulations governing mobile home park sales to apartment building sales would only create confusion and delay. Unlike mobile home owners, renters do not have collective associations, do not have a long-term financial investment in the property, and typically do not have the financial resources to purchase even a small home, much less an apartment building.

HB 444 does not fix any of the regulatory problems that contribute to New Hampshire’s housing shortage, but instead would create another one. 

  • House Bill 623, relative to prohibiting corporations from purchasing single-family homes for a certain amount of time.

It’s not clear what problem HB 623 is trying to address. Institutional investors are not heavily engaged in the single-family home rental market in New Hampshire. In fact, a General Accounting Office study in 2023 found that institutional investors accounted for only 3% of the national single-family home rental market, predominantly in the South, Midwest and West. 

That study concluded that the huge and sudden increase in institutional investor purchases of single-family homes was driven by the 2007-09 financial crisis and federal policies that followed it.

Fannie Mae’s 2012 REO-to-Rental Initiative bulk auctioned thousands of single-family homes for the purpose of converting these homes to rentals. In 2017, “Fannie Mae backed a 10-year, $1 billion loan to Invitation Homes (one of the largest investors in single-family rental housing) to purchase and manage single-family rental homes,” the GAO report explained. “Freddie Mac subsequently launched a pilot program designed to provide liquidity and stability for mid-sized investors (generally those with 50–2,000 properties) and uniform credit standards on loans for single-family rental properties.”

Rather than emerging as a predator, institutional investors answered the federal government’s call to rapidly increase the supply of rental homes by buying and converting foreclosed properties. They later moved into building their own rental homes, expanding the nation’s supply of rental housing. 

The GAO report found that the rental homes run by institutional investors are concentrated in the South and Midwest, with some presence in the West, all areas hit hardest by large-scale home foreclosures following the financial crisis. Most New Hampshire homes owned by businesses “can be attributed to individuals or small investors using an LLC to buy the home,” according to the New Hampshire Association of Realtors. 

There simply isn’t a problem with institutional investors buying up homes in New Hampshire. So HB 623 offers a solution to a problem that doesn’t exist. Yet its passage could still harm New Hampshire. The bill prohibits the purchase of single-family homes by “non-natural persons” (businesses) “until the property has been on the market for 90 days.” It contains a few exceptions. The first allows the purchase of residential housing by businesses for the purpose of converting it to a non-residential use. This, perversely, would encourage businesses to remove existing stock from the state’s housing inventory. 

Like HB 444, not only does HB 623 address a non-existent problem, but it would create a real one. 

Download this policy brief here: First Four Housing Reform Bills 2025.

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The right-to-work freeloader fallacy

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Labor unions negotiate benefits on behalf of all employees of a collective bargaining unit, not just their own members, unions say. Since non-members receive the benefits, they should be compelled to pay the union for negotiating them. 

Because right-to-work laws forbid non-union employees from being compelled as a condition of employment to pay any portion of their wages to a labor union or a union’s third party affiliate, they turn non-members into freeloaders, unions say.

At a public hearing on Wednesday, opponents of House Bill 238, this year’s right-to-work bill, made liberal use of this freeloader fallacy.

The freeloader argument has three parts.

  1. Unions are required by federal law to represent non-members.
  2. Non-members benefit from union representation itself.
  3. Non-members benefit from the results of union representation.

Piling fallacy atop fallacy

Several speakers at Wednesday’s hearing used the American Automobile Association (AAA) as an analogy. 

Imagine that a driver who never joined AAA gets in an accident, then calls AAA for roadside assistance. AAA would rightly refuse the request. Right-to-work laws do the equivalent of making AAA provide assistance to non-members, they claimed.

In defending one fallacy, these speakers committed another, the false equivalence fallacy.

First, AAA is nothing like a union. If AAA worked like a union, instead of sending you a tow truck, it would send you a lawyer to negotiate with a towing company. 

Further, under federal law, if a majority of a bargaining unit’s employees vote to form a union, that union represents all employees. (Which is what unions want.)

AAA enjoys no such monopoly status. It sells memberships in the open marketplace. 

There are two ways the AAA analogy could work. 

AAA could make these five changes:

  1. Unionize licensed drivers.
  2. Obtain federal certification as the only provider allowed to negotiate benefits for all drivers.
  3. Secure agreements with a third party to provide those benefits.
  4. Let only members vote on the benefits packages the third party will offer.
  5. Obtain authorization to charge non-members for these negotiation services.

The other option is for unions to operate like AAA. They could do this in three steps:

  1. Forego federal certification, thus opening their workplaces to other unions.
  2. Provide benefits (such as insurance, paid leave, etc.) to their members, rather than negotiating for employers to provide them. 
  3. Compete against other unions on price and quality to attract more members.

Tellingly, unions do not want option two. 

Who benefits from the benefits?

Unions claim that right-to-work is unfair because all employees enjoy the benefits of union representation. 

These benefits fall into two categories: 1. The compensation packages unions negotiate, and 2. Union representation itself.

Representation

Putting your workplace negotiations in the hands of a third party involves a great deal of trust. It also means sacrificing your autonomy as an employee. Your compensation is no longer dependent on your performance, but on your group status.

That tradeoff can make one better off. Or it can backfire. Union representation isn’t always in the best interests of a union’s own members, much less non-members.

In 2009, Gov. John Lynch had to cut $25 million in labor costs from the state budget. He offered rotating furloughs to workers so no one would have to be fired. The State Employees Association said no, choosing layoffs instead. The governor laid off 250 state employees. They clearly were made worse off by the union leadership’s inept negotiations.

Union contracts that favor seniority over merit disadvantage young, ambitious workers, making it harder for them to advance up the career ladder.

Benefits

Even if workers don’t like the idea of being represented in this way, unions say they are made better off by the compensation packages negotiated on their behalf, so they still must pay for the representation they don’t want. But that argument also fails on closer examination.     

During Wednesday’s hearing, Rep. Daniel LeClerc, D-Amherst, made the case that unions negotiate better benefits for employees. His own union benefits include no employee share for health insurance, he said. Because his employer covers the entire expense, he gets health insurance at no cost to him.

That might be a great deal for Rep. LeClerc. But of course he does pay for that insurance coverage. Instead of higher wages, he receives a larger portion of his compensation in the form of health insurance coverage. 

Health benefits aren’t bonus compensation. They’re a trade of cash for coverage. Employees pay for benefits by receiving lower wages than they otherwise would receive.

In the United States, private sector employees on average receive 70% of their compensation in wages and 30% in benefits, according to the Bureau of Labor Statistics.

In manufacturing, the breakdown is 66.5% wages and 35.5% benefits.

The government classifies all of this as compensation. So do employers.

Union-negotiated compensation packages are not “freebies” given to employees by a union. They are compensation packages negotiated between union representatives and employers. And those packages favor some employees over others. 

Benefits preferences vary by age, marital status, sex and other factors. Those preferences can be highly personal. 

A 2024 Ford Motor Co. survey found that only 33% of American Baby Boomers would take a 20% pay cut in exchange for a better quality of life, but 60% of Millennials would.

A young employee who would gladly exchange a lower wage for more flexible hours is made worse off by a union contract that makes the opposite trade. 

When union leaders, who tend to be older, negotiate a package heavy on pension contributions that require a decade to vest, younger workers who intend to stay for fewer than 10 years are harmed. 

Gen. Z Americans stay in a job for about 1/4 as long as Baby Boomers do. 

Because federal law gives a certified union monopoly status as the exclusive bargaining agent for employees, the individual employee is stuck with whatever package the union leadership negotiated.

Unions suggest that the choice is between benefits and no benefits. It’s not. It’s between one discrete package vs. any number of other possible packages. 

Many employees who give up their autonomy to a union might well be better off in the long run. But not all of them will be. In a free country, no one should be made to trade his workplace autonomy for collective representation.

Forced representation

That tradeoff is the issue. Unions claim that they make all workers better off. This is demonstrably untrue. Some workers are made worse off by losing their workplace autonomy. 

Unions say they are required by federal law to represent non-members. But they sought that law. And it applies only if they pursue and accept National Labor Relations Board certification as the exclusive collective bargaining representative for a bargaining unit. That is, only if they seek and accept government designation as a monopoly provider.

Unions could request decertification and represent only their members. They could further seek to change federal law if they see it as such a burden.

But that would put an end to collecting fees from non-members who would stop paying those fees if given the choice. 

Far from creating freeloaders, right-to-work laws restore a measure of financial autonomy to workers. Unions in right-to-work states can no longer behave as monopoly providers, but must convince non-members to join. That changes their behavior and makes them more responsive to the needs and preferences of all members of a bargaining unit.

Introducing this market incentive is the only way to improve the percentage of workers who will actually benefit from union representation.

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