N.H. could become first New England state to license music therapists

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As Gov. Chris Sununu moves to undo the state’s overly burdensome occupational licensing regime, legislators are trying to add more licenses. 

On Wednesday, March 22, the House voted 210-166 to require a state license for the practice of music therapy. 

Why? Health insurance.

Supporters said New Hampshire needs to license music therapists to ensure that patients can be reimbursed by their health insurer when they purchase music therapy treatment. 

It’s not that music therapists don’t practice — and practice safely — in New Hampshire. They do. It’s purely a matter of insurer reimbursement.

But as Rep. Carol McGuire, R-Epsom, pointed out, that’s hardly a reason to create an entire licensing bureaucracy for one therapeutic specialty. 

“…it is not the best use of our time and our state resources to create a separate statute, a separate license, a separate registration board, separate rules for each tiny specialization in the therapy field,” McGuire said.

House Minority Leader Matt Wilhelm, D-Manchester, argued that licensing music therapists would increase the supply of music therapists.

“New Hampshire is in the middle of a mental health crisis and the need for therapists is an urgent need,” he said.  People who need this type of therapy “could benefit from additional therapists.”

“…if there were certified music therapists and licensed music therapists,” he said, “it would increase the amount of people that would have access to care and high-quality care….”

But research on occupational licensing finds that licensing requirements tend to reduce the supply of practitioners and drive up prices. 

Only nine states license music therapists, according to the Certification Board for Music Therapists, a national organization that promotes excellence in music therapy.

If House Bill 532 becomes law, New Hampshire would be the only New England state to require a license to practice music therapy. Rhode Island registers, but does not license, music therapists, and Connecticut requires certification, but not a license, for anyone who uses the title “music therapist.” 

National certification through a respected trade organization offers a simple method for consumers to seek outside expert verification of music therapist credentials. 

In fact, supporters did not even make a health or safety argument for the license. There were vague references to “quality” therapists, but no one argued that the public is in danger from unlicensed music therapists, or that consumers are incapable of checking a therapist’s degrees or other credentials. 

In his budget, Gov. Sununu proposed a thorough restructuring of the state’s occupational licensing bureaucracy, complete with a consolidation of numerous boards and the elimination of 21 permanent licenses and 13 temporary licenses.

Other states are moving in this same direction. There’s a growing movement nationwide to remove unnecessary barriers to economic opportunity, particularly after the COVID-19 pandemic exposed just how economically damaging so many licensing restrictions are. 

Creating an additional licensing bureaucracy for a single niche field — when no health or safety reason has been identified — would move New Hampshire in the opposite direction. 

If health insurance reimbursement is the issue legislators want to address, then they could do so through insurance laws.

 

Editor’s note: Do you like the painting used to illustrate this piece? It’s the first AI-generated art we’ve used to illustrate an essay. We asked for a woman listening to music in a therapist’s office. Not bad. And no artist’s license was required.

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How to crush youth employment? Make it more costly to hire young people

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A surefire way to suppress already low levels of youth employment is to raise the cost of employing younger workers. Some proposals in the Legislature would do that, in the name of helping these same workers. 

One proposal, House Bill 125, would make it illegal to employ 16-and 17-year-olds after 9 p.m. Sunday-Thursday and after midnight Friday and Saturday during the school year. 

Were this to become law, employers would be subject to fines of up to $2,500 each time a high school student clocks out a minute late. (These fines are seldom imposed, according to the state.)

State law currently caps at 35 the number of hours older teens can work during a five-day school week. HB 125 was intended to fix an oversight in a previous revision of youth employment law that inadvertently let teens ages 16 and 17 work up to 48 hours during shortened school weeks. But this particular attempt at a fix would inevitably trigger unintentional violations of state child labor laws. 

The predictable effect of such a law would be to discourage the hiring of high school students, and to reduce the hours of those who are hired. 

New Hampshire already limits youth under the age of 16 to working between 7 a.m. and 9 p.m. Adding a 9 p.m. curfew for older teens would further depress employment in this age group. Teen employment was declining sharply before the pandemic and fell again in 2020. It has not recovered to pre-pandemic levels. 

With a precise time limit on the books, employers would be in violation of state labor law every time a teen doesn’t punch out on time. To avoid being written up for labor law violations whenever a teen gets distracted at the end of his or her shift, employers would end shifts earlier, hire fewer teens, or both. 

As if intended to depress youth employment even further, House Bill 58 would raise the wage for tipped jobs to a minimum of $7.25 an hour. Currently, New Hampshire employers may pay wages as low as $3.26 an hour to employees who earn tips.

HB 58 would set the regular federal minimum as the floor for all jobs, even those with substantial tip income. Were this to become law, restaurants would have to pay all servers an additional $3.99 per hour. The negative effect on employment would be immediate and predictable. 

A University of California-Irvine study published last August found that raising the tipped minimum wage reduced employment. 

“(O)ur evidence is quite clear and unambiguous in pointing to higher tipped minimum wages (smaller tip credits) reducing jobs among tipped restaurant workers, without enough of an increase in earnings of those who remain employed to offset the job loss,” the authors found.

Other research has found that higher minimum wages reduced teen employment, and that “teens exposed to higher minimum wages since 2000 had acquired fewer skills in adulthood.” 

Well-intentioned regulations such as those in HB 58 and HB 125 would end up worsening New Hampshire’s existing labor shortage and hurting the very people they are intended to help. 

In 2019, the U.S. Bureau of Labor Statistics recorded 67,000 employed Granite Staters between the ages of 20-24. In 2022, that number was down to 52,000. 

In 2019, the state estimated the number of waiters and waitresses in New Hampshire at 12,390. In last year’s report, it was down to 7,260, a decline of 41%, even though the entry-level wage was $1 per hour higher. 

Restaurants, already pressed by rising supply, labor and energy costs, have been raising prices to maintain their meager margins. Add in a state mandate to more than double base pay for wait staff, and some restaurants certainly will be forced out of business. Others will raise prices even further. Restaurant prices rose 8.2% from January of 2022 to January of 2023, according to the National Restaurant Association. That’s higher than overall consumer prices, which rose 6.4%.  

According to surveys of New Hampshire Lodging and Restaurant Association members, servers in New Hampshire earn between $20-$45 an hour when tips are included. Granite Staters do tip generously, ranking fifth nationally and first in New England, according to Toast, a Boston company that provides software for point-of-service tablets used by the restaurant industry.

As New Hampshire employers struggle with a labor shortage, persistent inflation and predictions of a looming recession, artificially increasing the cost of employing younger and lower-skilled workers would add an additional burden. As that burden would be tied to the hiring of those workers, it would likely lead to reduced opportunities for them. 

Hurting both employers and younger workers is not the intent of such regulations, but it would be the predicted outcome.  

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As legislators debate minimum wage hikes, the market is pushing wages higher on its own

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In the midst of an acute labor shortage that has pushed wages to new highs, a few legislators have opted to introduce another bill to raise New Hampshire’s minimum wage. 

House Bill 57 would raise the minimum wage to $15 an hour by 2025, then tie it to the inflation rate, ensuring regular, automatic increases. 

New Hampshire has about 48,000 job openings, according to U.S. Bureau of Labor Statistics data, and only about 20,000 unemployed persons. 

This imbalance between job openings and available labor has persisted for years. And that has driven wages in New Hampshire higher. New Hampshire Employment Security put the mean average wage at $30.12 an hour in last year’s report (based on 2021 data). In 2019, it was $25.94. 

The average entry-level wage in the 2022 report was $14.36, up from $11.80 in 2019. 

Competitive pressure is pushing wages up to the point that dishwashers have moved out of the list of the 10 lowest-paid occupations in the state. The lowest average wage in the 2022 report belonged to gambling dealers, at $11.59 an hour. Food preparation workers were above that at $12,10 an hour. 

With a booming economy and a severe labor shortage combining to raise wages naturally, the market is already moving compensation in low-paying occupations toward the $15 an hour goal. House Bill 57 would mandate a $13.50 minimum wage by this September. Fast food restaurants regularly advertise jobs well above that rate now, and food prep workers on average are quickly approaching that level. 

Into this discussion, researchers last month dropped yet another study showing that minimum wage increases have costs that can make people who work in the lowest-paid occupations worse off. 

Researchers at the John Hopkins Bloomberg School of Public Health and the University of Minnesota-Twin Cities School of Public Health found that minimum wage increases reduced the number of employers who offered health insurance. 

“We find that a $1 increase in minimum wages is associated with a 0.90 percentage point (p.p.) decrease in the percentage of employers offering health insurance, largely driven by small employers and employers with more low-wage employees. A $1 increase is also associated with a 1.80 p.p. increase in the prevalence of plans with a deductible and three percent increase in average deductibles.”

Though minimum wage hikes led to reductions in employer-sponsored health insurance, they did not lead to increases in uninsured rates, the authors found. That is “likely explained by an increase in Medicaid enrollment,” they wrote.

This study comes on top of decades’ worth of research that, on the whole, tends to find a negative effect on employment — particularly for younger workers and those with less education — from minimum wage increases. 

The preponderance of research on minimum wage increases shows that government-mandated compensation increases are not cost-free. Forcing employers to raise wages in ways that are unrelated to productivity tends to result in shifting resources from other parts of the business. That can include eliminating hours, positions or benefits.

Advocates for high minimum wages seem to assume that employers, including small businesses, simply have troves of cash reserves lying around and pay what they do out of stinginess. But employers generally aren’t sitting on piles of treasure like Smaug in his cave under Lonely Mountain.

And employers can’t simply manufacture more money whenever they want to spend more. Only the government can do that. Employers have to make trade-offs. If the government makes them pay more for low-skilled labor, they’ll take that money from somewhere else. And the results won’t necessarily be net positive for the low-skilled workers legislators intended to help. Usually, the opposite is true. 

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Rent control would only worsen New Hampshire’s housing crisis

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“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

— Swedish economist Assar Lindbeck

New Hampshire renters have endured steadily rising prices for many years. Their frustration has reached the point that some lawmakers and activists are advocating a policy once unthinkable in the Granite State: rent control. 

The sense of helplessness is real. From 2013-2022, the median rent for a two-bedroom apartment in New Hampshire rose from $1,076 to $1,558, an increase of 45% according to the New Hampshire Housing Finance Authority’s 2022 Rental Rental Cost Survey. This is well above the inflation rate. Had the median New Hampshire rent tracked the national Consumer Price Index over the last decade, it would be about $200 lower.

Rent control is being offered as a remedy for this desperate situation. But more than 75 years’ worth of research into the effects of rent control reveals a disastrous record. 

Establishing a government-mandated cap on rents or rent increases does not suddenly abolish the real world and the economic laws that apply to it. Investors will continue to seek strong returns, and if government artificially constrains their return on one form of investment, they will seek it elsewhere.

No one has to be a landlord. People choose to build and own apartments in anticipation of earning a significant return on their investment. Studies on the effects of rent control laws show that they tend to make communities worse off by reducing investment in rental properties, shrinking the supply of apartments, raising market rents, lowering overall property values, and locking renters into sub-par units while discouraging them from building their own wealth through homeownership. 

Here are a few of the demonstrated harms caused by government rent control policies:

  • St. Paul, Minn., passed a rent control ordinance in 2021. A University of Southern California study the next year found that “rent control caused property values to fall by 6-7%, for an aggregate loss of $1.6 billion.” It further found that “the tenants who gained the most from rent control had higher incomes and were more likely to be white, while the owners who lost the most had lower incomes and were more likely to be minorities. For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero. Thus, to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.”
  • A 2018 study of rent control in San Francisco found that the imposition of rent controls reduced the supply of rental housing by 15%, raised rents by 5%, and fueled the conversion of lower-end rental units to higher-end condominiums. The authors found that “landlords of properties impacted by the law change respond over the long term by substituting to other types of real estate, in particular by converting to condos and redeveloping buildings so as to exempt them from rent control. This substitution toward owner occupied and high-end new construction rental housing likely fueled the gentrification of San Francisco, as these types of properties cater to higher income individuals. Indeed, the combination of more gentrification and helping rent controlled tenants remain in San Francisco has led to a higher level of income inequality in the city overall.”
  • From 1970-1994, Cambridge, Mass., imposed strict rent controls and made it hard for the owners of rent-controlled properties to convert them to other uses. Those ordinances were abolished with the passage of a 1994 referendum banning rent control in Massachusetts. This led to increased apartment construction. “Over the next several years, direct dollar investments in housing units, as measured by building-permit filings, more than doubled on an annual basis,” a 2012 study found.
  • A separate 2007 study of the effects in Massachusetts found that rent control did lower rents in covered buildings, but also “led to deterioration in the quality of rental units” and encouraged apartment building owners to “shift units away from rental status.” 
  • A 2000 study of the effects of rent control on tenants found that rent control raised market rents and “the average benefit to tenants in regulated units is negative. This implies that, on average, tenants in rent regulated units would be better off if these controls had never been established.”
  • A 2019 study of rent control in Berlin, Germany found that rent control “reduces rents in the controlled sector, but also leads to rent increases for uncontrolled units. And it “reduced the propensity to move house within rent controlled areas, but only among high-income households.”
  • A 1989 University of Pennsylvania study of rent control in New York City found that capping rents discouraged homeownership, helped whites more than minorities, and reduced investment in and upkeep of rent-controlled units. In short, rent control lowered the quality of apartments while simultaneously discouraging renters from becoming homeowners. “The expected rent control benefits had a significantly negative influence on the propensity to own. That is, consumers with large expected rent control benefits had lower demands for homeownership.”
  • A 2009 review of the economic literature on rent control found that “economic research quite consistently and predominantly frowns on rent control.” It also found that the effect on homelessness was inconclusive. “Several empirical studies find no clear relationship between rent control and homelessness,” according to the review. Some studies found that rent control increased homelessness, others that it had no clear effect or reduced homelessness. Given the mixed results, rent control should not be considered a solution to the problem of homelessness.

The negative effects of rent control are so thoroughly documented that there’s almost no disagreement among economists, left or right, on the issue. “The analysis of rent control is among the best-understood issues in all of economics. Its known adverse effects illustrate the principles of supply and demand,” as Paul Krugman, the left-wing economist and New York Times columnist, put it.

Supply and demand also explains New Hampshire’s high rents. The chart below shows building permits for multifamily housing going back to 1999. 

Though building permits have slowly increased, they haven’t kept up with demand. As a result, New Hampshire’s rental vacancy rate fell from 3.4% in 2013 to 0.5% in 2022. Our high rents are not caused by greed or avarice or the wickedness of capitalism. They’re the direct result of a decades-long slow-down in apartment construction. 

The remedy is not for government to attempt to cap apartment prices. It is for government to permit the construction of new rental units. 

Download this policy brief as a pdf: Rent Control Policy Brief 2-2023

Editor’s note: The percentage increase in the median two-bedroom apartment rent in New Hampshire from 2013-2022 is 45%. The initial post inadvertently had the figure for the five-year increase (26%) pasted in the spot for the 10-year figure. 

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How licensing makes you wait longer for a haircut

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Unless you’re still growing your pandemic beard, you might’ve noticed that getting an appointment with your barber or stylist seems to take longer than it did before the pandemic. 

It’s not all the extra alcohol you got accustomed to consuming on a weekly basis since 2020. The supply of barbers, hairdressers, hair stylists and cosmetologists in New Hampshire really has shrunk in the last several years. As with so many other occupations, the demand for these services exceeds the supply of providers.

And as with so many other areas of the economy, the shortage is made worse by government regulations. 

Fortunately, there’s a simple tweak to state licensing laws that would encourage more licensed personal grooming professionals to move to New Hampshire. 

Barbers, cosmetologists and estheticians are licensed by the state, and the law regulating these professions does not automatically recognize as valid licenses earned in other states. 

RSA 313-A:14 authorizes the Board of Barbering, Cosmetology and Esthetics to recognize an out-of-state license “provided the other state’s licensing requirements are substantially equivalent to or higher than those of this state.”

Sounds harmless. But it’s not. 

It’s not clear how the board is to determine whether a license is “substantially equivalent to” the qualifications for a New Hampshire license. States require varying hours of education and training, but also varying numbers of tests and varying levels of experience. One state’s program might be more effective than another’s even though it requires months’ less training. 

Economists who’ve studied license portability generally prefer blanket license reciprocity. Stephen Slivinski at Arizona State University has studied occupational license portability among the states and found that the general “lack of license portability has real-world impacts. It keeps workers from moving to a state when they might otherwise. Lack of portability is also especially onerous for ‘trailing spouses’ of military members who are often kept out of the workforce when their family is transferred to a new state.”

“Getting a new license requires costly, time-consuming, and duplicative hours of training just to do the job that the worker was already doing before they moved across the state border. As a result, the lack of occupational licensing portability suppresses the labor market opportunities for new residents of a state. Additionally, it has the effect of discouraging people from moving to a new state at all.”

This is a serious issue for New Hampshire, which is suffering a years-long labor shortage. That shortage includes these licensed occupations. 

New Hampshire Employment Security has a single occupational classification that covers hairdressers, hairstylists, and cosmetologists. In 2021, the last year for which the state has published data, the total number of hairdressers, hairstylists and cosmetologists in New Hampshire was 1,860. 

In 2017, the number was 2,020. We lost 160 positions in these occupations in four years, even as New Hampshire’s population was growing.

House Bill 409, sponsored by Rep. Diane Pauer, would help to fill that shortage by making it easier for licensed professionals in these fields to move to New Hampshire and begin work immediately, without having to spend hundreds of hours and thousands of dollars to be retrained in the field in which they’ve already been trained.

HB 409 would remove from state law the clause that grants barber, cosmetology and esthetics license reciprocity only when the practitioner’s home state license requirements are “substantially equivalent to or higher than” New Hampshire’s.

What would this change do? 

Well, for barbering, New Hampshire has among the lowest hours-of-education requirements in the nation. We require 800 hours of training to become a barber. Only four states require fewer hours, according to licensing data compiled by the Institute for Justice (IJ). 

One of them is New York, which requires just 291 clock hours of training to become a barber. One could easily argue that this requirement is not substantially similar to New Hampshire’s. But does anyone actually believe that Manhattan barbers pose a danger to New Yorkers, or that a licensed barber who moves from New York to New Hampshire is a danger to Granite Staters?

Vermont, Florida and Oregon also mandate fewer hours of barber training than New Hampshire does.

For cosmetology, New Hampshire requires 1,500 hours of training. Eight states require fewer hours, including Massachusetts and Vermont (both 1,000 hours). California, New York, New Jersey and Florida also require fewer hours of training than New Hampshire, according to IJ’s data. 

Again, it would be absurd to argue that cosmetologists in New York, New Jersey, California, Massachusetts and Vermont are so dangerously undertrained that they should be forbidden from working in New Hampshire. If you’re qualified to cut Sarah Jessica Parker’s hair, you’re surely qualified to cut Jeanne Shaheen’s or Maggie Hassan’s.

Though only a handful of states require fewer hours of training for these occupations, they include some of our neighbors and other states not far away. HB 409 would remove the entirely unnecessary equivalency language and allow licensed professionals in Massachusetts, Vermont, New York and a few other states to relocate here and start working right away. 

This change is unlikely to eliminate the shortage of barbers and hairstylists right away. But it would remove one obstacle that needlessly prevents some professionals from moving here. 

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Humbug! Scrooge would want fewer apartments

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In the opening of “The Muppets Christmas Carol,” Gonzo and Rizzo the Rat are selling apples in a dingy London market. Gonzo scolds Rizzo for eating the inventory. 

“Hey, I’m creatin’ scarcity,” Rizzo replies. “Drives the prices up.”

Rizzo is a clever rat.

Later in the movie, the ghosts of the Marleys tell Scrooge how they enjoyed overcharging the poor for rent. (In the Muppets version, there are two Marleys.)

Rizzo didn’t comment on those lines, but he might’ve dead-panned, “maybe someone ate the apartments and drove up prices?”

As Dickens’ classic tale is retold and rewatched this Christmas season, many Granite Staters face a harsh reality that Rizzo — and Scrooge — would understand. Scarcity keeps driving up prices for homes and apartments. 

You don’t need to be visited by the ghosts of housing markets past to see the problem — and why Scrooge would love it. You just have to compare the markets for short-term and long-term rentals.

Demand for short-term rentals has surged nationwide. The number of nights booked in short-term rentals rose 15.8% from October of 2021 to October of 2022, The Wall Street Journal reported last week. 

Investors in short-term rental properties expected prices to rise along with demand. But something happened on the way to sipping daiquiris on the beach as the rent money poured in. A lot of other people responded to the high rates by offering their properties for rent too.

“However, while the absolute number of bookings has risen, there has also been a sharp rise in supply of available short-term rental listings in the U.S., up 23.3% in October 2022 compared with October 2021,” the Journal reported. 

A woman who rents her California home on Airbnb told the Journal, “I’ve felt a massive drop” in rents she can charge. A holiday weekend at her home fell from more than $1,000 per night during the pandemic to around $275 now. Why such a collapse? Demand rose, which drove up prices, and those higher prices prompted investors to increase supply, which brought prices back down. That’s how a market would normally function. 

But it’s not how the market for long-term rentals works. 

In October, median rents were up nationwide by 7.8 percentage points, year over year, according to rent.com. In New Hampshire, the median rent was up 14.12%, by the website’s measure. 

Would-be home-buyers have experienced similar price increases. The median single-family existing-home price was up 8.6% in the third quarter, according to realtor.com. The Union Leader reported Tuesday that the median single-family home price in New Hampshire rose by $34,000 from last November to this November. It’s now $435,000.

For homes, apartments and short-term rentals, demand remains strong. But prices have fallen in only one of those markets: the one where supply faces the fewest constraints.  

“My reaction is that the growth in short-term rentals has come about because people are converting their own homes, or parts of them, into short-term rentals,” said Jason Sorens, director of the Center for Ethics in Society at St. Anselm College and author of the Josiah Bartlett Center’s 2021 housing report. “Rarely do people build units specifically for short-term rental. And that’s where the real housing supply bottleneck is: it’s become harder to build. Without more building, we aren’t going to see a similar supply increase for long-term rentals. But the other point this news shows us is that if we did increase supply, it would reduce rents.”

As we documented last year, overly restrictive local regulations are a significant barrier to new development in New Hampshire. These regulations make it difficult to build new housing, which prevents developers from meeting demand. That creates scarcity, which drives up prices. Rizzo would be proud. 

And Scrooge would be thrilled. Scrooge, don’t forget, was a landlord as well as a money lender. He could get away with charging outrageous rents for decades only if his renters had no cheaper options. So Scrooge would be no fan of loosening land use regulations to allow more apartment and home construction.

If Granite Staters want to avoid turning our existing housing shortage into a Dickensian nightmare, the only solution is to loosen the restrictions and let developers create more supply.   

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How a protectionist shipping law could leave New England in the cold

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By Jonathan Helton

Will New England have enough fuel this winter?

The region’s six governors have their doubts, and in July they wrote U.S. Energy Secretary Jennifer Granholm to ask for relief from a 1920 shipping law that has limited the region’s supply of fuel, particularly oil and natural gas.

The governors asked the Biden administration to “explore the conditions under which it might be appropriate to suspend the Jones Act for the delivery of LNG [liquid natural gas] for a portion or all of the winter of 2022-2023.”

They flagged the 102-year-old Jones Act because it requires that goods shipped between U.S. ports be carried on ships that are U.S. flagged, U.S. built, and mostly owned and crewed by Americans.

Since New England uses natural gas to meet nearly half of its electricity needs, this old law puts the region in a precarious position.

A shortage of natural gas pipeline capacity makes it challenging for New England to get enough fuel during periods of peak demand, such as the coldest days of winter and the hottest days of summer.

Importing domestic natural gas by tanker ship offers a possible solution. But the Jones Act gets in the way. Its requirement that New England energy companies hire domestic ships to transport fuel between American ports actually prevents New England from shipping fuel from Texas or Pennsylvania to Boston.

How?

There aren’t any American LNG tankers, despite America being the world’s largest LNG exporter, with major export terminals on the Gulf Coast.

No LNG tankers have been built in the U.S. since 1980. This is largely because U.S. shipyards do not construct competitively priced ships. In 2015, the U.S. Government Accountability Office estimated it would cost up to three times the world market price to buy an LNG tanker from a U.S. shipyard, assuming one could be built at all.

In general, most of New England’s LNG arrives via pipeline. Pipeline capacity, however, cannot be added quickly.

As New Hampshire Consumer Advocate Donald Kries wrote in August: “The interstate pipeline network does not have enough capacity to supply the region with all of the natural gas it needs to heat all the homes and businesses reliant on that fuel while supplying all of the [natural] gas generators that would need to fire up in an extended cold snap.”

The Jones Act leaves foreign imports as the best alternative. Unfortunately, imports from abroad often run counter to U.S. foreign policy. Before the war in Ukraine, for example, New England and Puerto Rico bought LNG from Russia on occasion. Similarly, Hawaii imported as much as a third of all its oil from Russia, mainly because the Jones Act made it too expensive to buy U.S. oil. But President Joe Biden’s ban on Russian fuel imports put an end to that.

Energy Secretary Granholm met with the New England governors on Sept. 15 to talk about their Jones Act waiver request, but according to Reuters, the outcome wasn’t great.

“In the event that there is an issue where additional supplies of heating fuels are needed, we would work with the states as appropriate to see what tools are needed,” a U.S. Department of Energy official told the news service.

Such obfuscation is unfortunate because a Jones Act waiver would be a win for everyone. New England residents could have a reliable supply of fuel, and probably would save on electricity costs, which already are extraordinarily high.

A Jones Act waiver also would unlock a new market for Gulf Coast LNG exports. And U.S. maritime interests should have no reason to complain, since there aren’t any LNG tankers that comply with the Jones Act anyway.

Beyond a waiver, Congress could reform the Jones Act in more substantial ways. The law has failed in its mission to ensure a healthy maritime industry in the name of national security, and an update is long overdue.

Today, only four U.S. shipyards build large oceangoing commercial ships, and only 93 such ships are Jones Act-compliant — down from 257 in 1980. Since 2020, those shipyards have produced only two large, oceangoing vessels, with one other large cargo ship set to be completed later this year — and it is not an LNG tanker.

Perhaps the best initial reform would be to repeal the law’s U.S.-built requirement, even if only for LNG tankers. This would put more LNG tankers into service for the American people, make it easier for U.S. carriers to expand their fleets and markets, provide more jobs for U.S. mariners, and help keep New England warm during the coming winter.

Everyone would win.

If we maintain the status quo, the odds of New Englanders running short of fuel this winter remain elevated. Why court such a disaster when a solution is as easy as reforming a single bad shipping regulation?

Jonathan Helton is a research associate at the Grassroot Institute of Hawaii.

 

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The gubernatorial candidates’ housing plans: An assessment

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By Jason Sorens

Gov. Chris Sununu and his opponent, Sen. Tom Sherman, have proposed reforms to alleviate New Hampshire’s severe housing shortage. How do those proposals compare, and how effective would they be? A brief overview of each suggests that neither would solve New Hampshire’s housing shortage, but Gov. Sununu’s initiative would be likely to result in more housing construction.

Democratic Sen. Sherman released his housing plan for New Hampshire in July, calling it a longer-term fix than incumbent Republican Gov. Chris Sununu’s “federal band-aid,” the InvestNH Housing Fund approved in May. Of course, InvestNH is not the sum of Gov. Sununu’s housing policy, nor has he yet released a detailed plan for the coming term. Therefore, a direct comparison of the two candidates’ housing policies is imperfect at this time, but we can still assess what is good, bad, and mediocre in each set of proposals: Sherman’s housing plan and Sununu’s InvestNH Housing Fund.

Gov. Sununu’s InvestNH plan

The governor’s InvestNH program consists of $60 million in grants for owners and developers, and $40 million in grants for municipalities. In an ideal world, taxpayer dollars wouldn’t be used to subsidize a private industry at all. Yet government has created housing scarcity by strictly regulating home-building, not in the interest of health or safety, but simply with the explicit goal of preventing new people from living in the area. The obvious solution is to remove the unnecessary regulations that limit residential construction. But those regulations rest at the local level, and legislators have proven reluctant to overrule them with state laws. Using financial resources as incentives to work around or relax local regulations is a compromise that attempts to produce quick results while accepting the political reality that no statewide fix is achievable this year.

Still, if the state is going to subsidize home-building, it had better be done in efficient and effective ways. Grants to municipalities to encourage them to lift regulatory restrictions on new homes might be the most easily justified way of deploying financial resources because they attack the problem at the source: the tangle of local regulations that prevent building.

The InvestNH municipal grants consist of three streams: $30 million in grants to municipal governments on a per-building permit basis, $5 million in grants to assist with regulatory evaluation and redesign, and $5 million to cover the costs of demolition of vacant or dilapidated buildings.

Towns will get $10,000 for every building permit they issue within six months of application for new rental units constructed in projects made up of five or more units. Because of the short timeline, this money is not going to incentivize changes to zoning ordinances. Projects of this size almost always require a variance from the local board of adjustment, so this money mainly works as an incentive for those boards to approve more projects, or at least cooperate to speed them along.

The $5 million will go to municipalities for consulting on their housing needs, reviewing current regulations, and rewriting regulations. The primary goal of requests must be to increase housing stock.

The $60 million for capital grants goes directly to developers and the nonprofit New Hampshire Housing Finance Authority. Only multifamily rental housing is eligible. For projects with 15 or more units, applicants must demonstrate an “affordability commitment,” holding rents below market for lower-income tenants for at least 20% of units.

The main advantage of Sununu’s plan is that the money should indeed incentivize new housing construction in a relatively short time frame. By tying the municipal grant money to the issuance of building permits, Sununu’s plan creates a strong incentive for boards to issue more building permits. The state would, in effect, pay municipalities to issue new building permits.

The bulk of the Sununu plan, $60 million for capital grants to stimulate the construction of multifamily housing, might incentivize developers to go forward with projects that contain a higher percentage of lower-priced units than would have been profitable without the grants. Ordinances that require projects to set aside a certain percentage of units for rent at below-market rates tend to discourage development and lead to less new construction. But this cash incentive might do the opposite. It will be difficult to know, however, whether these projects would have been built anyway.

Paying municipalities to consult on housing needs and review regulations might produce better land use regulations, but that outcome is not guaranteed, and this portion of the plan lacks a strong incentive to achieve the desired result.

The strength of Sununu’s plan – that it is focused on stimulating development in the short term – is also a drawback. It does very little to change the long-term dynamics of repressed supply. It also focuses solely on larger multifamily rental projects, as opposed to single-family starter homes and “missing middle” construction.

Sen. Sherman’s plan

Sen. Sherman’s plan is less detailed, but it has these features:

  1. It adds staff to regional planning commissions and the state’s Office of Planning and Development;
  2. It funds municipal review of local land-use ordinances;
  3. It reviews state-level regulatory hurdles to development;
  4. It assesses under-used state lands for development potential;
  5. It promotes model zoning ordinance elements;
  6. It subsidizes loans for water, sewer, and transit infrastructure;
  7. It creates an incentive program for municipalities to adopt more pro-housing ordinances;
  8. It increases community development tax credits;
  9. It increases the affordable housing fund;
  10. It creates a historic rehabilitation tax credit;
  11. It doubles funding for contractor job training.

Sherman touts the fact that his plan features permanent programs rather than a one-time infusion of money. This might not be quite fair to Sununu, since the InvestNH program came out of a unique opportunity to spend federal grants, and the governor has strongly supported legislation that offered some structural changes, including a “housing champion program” that would reward municipalities for changing their ordinances to allow more housing density. Still, Sherman’s plan is intended to be a comprehensive menu of permanent policy changes. The question is whether they would achieve the intended goal of stimulating the construction of more housing.

Some of Sherman’s ideas can be expected to have a greater impact than others. The strongest part of Sherman’s plan is the proposal to tie increases in state transportation and environmental funding to “the adoption of zoning or infrastructure that allows reasonable opportunities for housing.”

Gov. Sununu supported a similar housing champion program that was initially included in Senate Bill 400 this year, but that part of the bill did not pass. Depending on how such a program is designed, it could have considerable long-term impact. A well-designed program will reward municipalities for actual housing unit creation as well as regulatory changes, and will reward regulatory changes that allow for single-family and “missing middle” in addition to statute-defined “workforce housing” (buildings of five units or more).

Expanding sewer access helps the environment and allows more housing and commercial density. It’s unclear how important an obstacle it is to new construction, but it could be a factor.

Sen. Sherman’s proposal for a state job training fund for the construction trades is not likely to relieve the shortage of skilled construction labor, as the funds will surely be a drop in the bucket compared to what the private sector already spends on training, and training is rarely the decisive hurdle discouraging someone from entering a manual-labor occupation.

The CDFA tax credit, which Sen. Sherman would expand, is widely alleged to favor politically connected businesses and nonprofits and doesn’t focus on housing.

The rest of Sen. Sherman’s plan would do little to stimulate new housing development. The bulk of the senator’s plan would fund studies and reviews, or give municipalities and planning commissions additional financial resources that are not tied to the issuance of new building permits or the passage of new, housing-friendly ordinances.

Whereas most of Gov. Sununu’s plan is focused on directly financing new housing construction, most of Sen. Sherman’s plan is focused on providing additional financial resources to local governments, planning commissions, and construction industry labor.

Overall, Gov. Sununu’s plan contains stronger immediate incentives for developers to propose multi-family housing, and for municipalities to issue new permits. Sen. Sherman’s plan also contains some of these incentives, but until funding details are available, it’s impossible to know how much of an impact they will have. Setting up a permanent housing champion program, as both candidates appear to support, would have the potential to change the game.

It’s worth noting that neither candidate is talking about state preemption of local regulation. Zoning preemption bills are becoming more common, and are generating more attention, in the Legislature. One nearly passed the House this year (House Bill 1177, sponsored by Rep. Ivy Vann, to legalize fourplexes wherever water and sewer are available), and several others were proposed.

With both candidates for governor backing programs to incentivize local governments to allow more housing, look for similar proposals to be introduced in the Legislature next year. But if those incentives fail to produce meaningful changes in local regulations, and the state’s severe housing shortage continues to frustrate voters, the pressure for direct preemption of local regulatory barriers will continue to build.

Dr. Jason Sorens is director of the Center for Ethics in Society at St. Anselm College.

Download a pdf copy of this analysis: Gubernatorial Candidates Housing Plans

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Modest changes to housing regulations take effect

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On August 23, a handful of state laws crafted to address New Hampshire’s housing shortage take effect. Though the big reforms were left on the Legislature’s cutting room floor, these modest changes might prove helpful. 

The splashiest change, which might prompt some warrant articles next spring, applies zoning exemptions carved out for 55+ communities to workforce housing as well. 

Most of the changes are more technical fixes to ensure that municipalities don’t stick proposed developments in a legal limbo simply by delaying or refusing to act on applications. 

These changes amount to mostly modest improvements in the system that will make it slightly less antagonistic to new housing construction. But with home prices and rents remaining at record levels, pressure to pass more powerful reforms is likely to prompt more legislation next year. 

The new laws will:

  • Require the Office of Planning and Development to create and offer training to planning and zoning boards. The initial idea was to require board member training, but that was dropped in favor of making the training available at no cost to board members. 
  • Require that any fee imposed by a local land use board be published “in a location accessible to the public during normal business hours.” Any fee not published at the time an application is submitted shall be waived. 
  • Require that by July 1, 2023, any local incentive established for housing older persons “shall be deemed applicable to workforce housing development.” Many communities exempt 55+ communities from certain zoning requirements. The idea is to create exemptions that allow housing to be built only for people who don’t have school-age children. This change would apply those restrictions to workforce housing as well. 
  • Require that local land use boards issue a final written decision for all applications, and require those decisions to “include specific written findings of fact that support the decision.” Failure to offer specific, written findings of fact would be grounds for automatic reversal by the Superior Court.
  • Require zoning boards of adjustment to issue a final decision on an application within 90 days of receiving the application. 
  • Require planning boards to determine whether submitted applications are complete at the next regularly scheduled meeting, or within 30 days after receiving the application. Boards must then act on an application within 65 days of determining that it’s complete.
  • Require selectmen or city councils to certify approval of a plat if the planning board fails to act within the allotted time. Failure of selectmen or city councils to act will constitute grounds for the Superior Court to act if petitioned to do so by the applicant.
  • Allow municipalities to acquire land for use as workforce housing, but not by eminent domain.
  • Allow municipalities to lease basements, ground and second floors of public buildings for residential use, negotiate the sale or lease of property for residential use, and acquire, improve, operate, maintain or promote residential developments “aimed at increasing the available housing stock within the municipality.”
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New Hampshire makes emergency health care licenses permanent

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One of the most consequential laws of the 2022 legislative session received next to no media coverage. But thanks to its passage, you might get to keep seeing your doctor, or have a nurse the next time you go to the hospital.

During the pandemic, health care facilities found themselves with sudden, critical shortages of providers. But by law they couldn’t bring out-of-state providers here to fill the gaps. Those providers lacked New Hampshire licenses.

New Hampshire does not automatically recognize out-of-state professional licenses. So the state had to tell hospitals and other employers that they couldn’t fill their staffing needs with qualified, licensed health care professionals because those professionals had licenses issued by the wrong state.

Gov. Chris Sununu responded quickly by issuing emergency orders that let these providers come to New Hampshire under an emergency license. Thousands did.

But here’s the problem with emergency licenses. They end when the emergency ends.

An emergency license is like a life raft that deflates when the storm ends.

Even if you Haven’t reached shore, that raft is gone. Now what?

New Hampshire issued emergency licenses to 22,328 health care professionals during the pandemic. Those licenses were set to expire in March.

What’s the big deal; those are just temporary helpers, right?

The 22,328 emergency license holders total 26% of all licensed health care providers in the state. They included 951 mental health counselors, 1,064 social workers, 1,114 psychologists, 2,104 Advanced Practice Registered Nurses, and 14,920 physicians.

Emergency license holders represent 36% of licensed alcohol and drug counselors, 39% of licensed advanced practice registered nurses, 44% of licensed independent clinical social workers, 45% of licensed clinical mental health counselors, 47% of licensed marriage and family therapists, 63% of licensed psychologists and 65% of licensed physicians.

To prevent a sudden and massive reduction in access to providers, the state needed to prevent the expiration of those licenses.

The solution was Senate Bill 277, which made those emergency licenses permanent. It also restored the Office of Professional Licensure’s authority to issue emergency licenses, and created an option for issuing emergency licenses going forward.

The bill preserved Granite Staters’ access to thousands of providers who had been offering care safety in the state for two years. But its long-term impact is even more important.

By granting permanent licenses to out-of-state providers, the bill undermines the argument, often made by industry trade associations, that out-of-state occupational licenses are inherently inferior and must not be recognized by New Hampshire.

In one fell swoop, the state just granted permanent licenses to more than 22,000 health care professionals licensed by other states. During two years in which those professionals practiced in New Hampshire, the Office of Professional Licensure recorded no serious health or safety violations from those practitioners.

Unfortunately, the state didn’t follow through to the obvious logical conclusion and simply grant automatic license reciprocity for practitioners licensed in other states. Legislators were not quite ready to go that far.

New Hampshire’s experience with emergency health care licenses during the pandemic showed that universal recognition of occupational licenses is a safe and effective way to increase access to medical care for Granite Staters. Why wouldn’t it also be a safe and effective way to increase access to all licensed professionals?

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