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The State We’re In program

The State We’re In host Melanie Plenda, NH Business and Economics Affairs Commissioner Taylor Caswell, Business New Hampshire Magazine Reporter Judi Currie and Boston Globe Real Estate Reporter Catherine Carlock discuss what New Hampshire and Massachusetts are considering to address the shortage of affordable housing in the region.

This content has been edited for length and clarity. Watch the full interview on NH PBS's The State We’re In.

Melanie Plenda: Commissioner, let's start with you. Let's talk about the New Hampshire economy. How would you characterize the shape it's in right now, and what role does housing play in that?

Taylor Caswell: Overall, we've seen some pretty good recovery numbers since the heat of the pandemic back in 2020 and 2021. All of the traditional numbers are looking really strong in terms of things like unemployment rate, labor participation rate, economic investment, types of jobs that are created, those are all continuing to trend in the right direction. I think the distinction that we're seeing is that we fundamentally feel like even though the numbers are similar to say, January 2020, it just feels really different out there in the in the community with our employer community, and a big part of that is the workforce and the availability of workforce and how the pandemic has created a bit of a seismic shift in where people are working and when they are coming back. Inherently in that, and happening at the same time, is this affordability and availability crisis in the state where we have a 0.6% vacancy rate for two bedroom apartments pretty much statewide happening simultaneously. Housing has really become an economic issue as much as it is any sort of social or community issue.

Melanie Plenda: Can you give us the details of the administration's housing plan and its goals?

Taylor Caswell: There's a couple of components to it, but most recently we have had approval to move forward with a program we called ‘Invest NH.’ This is a hundred million dollar investment in two broad categories. One category is for the municipal participants in this process. Our municipalities are very much a necessary partner and collaborator in addressing the housing issue, so roughly about $40 million of that funding is moving in that direction. The other $60 million is really aimed at the projects themselves and moving affordable projects forward towards availability sooner rather than later. There's a lot of delays happening out there for various reasons, not the least of which are supply and demand issues, material costs, and those sorts of things. We're hoping to be able to accelerate the availability of affordable units with the program and incentivize and provide tools to municipalities to continue to participate in ways to address the housing crisis.

Melanie Plenda: Can you explain more about how the $60 million would work in terms of building these projects?

Taylor Caswell: A hundred million dollars is a really lot of money, right? But at the same time, the scope of the issue is substantial and well beyond a hundred million. What we're looking at though right now is really low vacancy rate. What we're trying to do is use this funding to accelerate the development and bring new units online across the state in rural communities, as well as in our urban areas. The way that we're going to do that is we're going to cover these gaps for projects that are at some stage of maturity in their development process - whether that's construction or financing - but for the most part, these are going to be projects that are underway and are facing a gap in order to be able to accomplish the goal to bring those units online. One of the reasons why we've done this is because these funds are sourced from the the ARPA, the American Rescue Plan Act, and they have a time limit on using them. We have to be able to move this hundred million in an effective way.

Melanie Plenda: How would the $40 million be used to encourage towns to change their zoning?

Taylor Caswell: That program is aimed at something we hear a lot from our municipalities, which is when you add housing, you've added some level of cost. What that cost is and how real it is, is a question that often gets debated but in the end, what we're we're hoping to be able to do with this municipal program is to provide a bit of an incentive for them to move these projects forward in a timely and predictable way, both for the community as well as for the developer of the project. We do that by providing a $10,000 per unit grant program that would be eligible to municipalities that permit these affordable units within a six month window. That's the main part of that effort. There are two other programs that would provide funds to communities that need to do an upgrade or a review, or an implementation of zoning regulations that will accommodate housing in a part of town or in a way that reflects that community's values. Rather than having to have that discussion when a developer shows up at the table and then the final program is a smaller program at aimed at demolition. We have a lot of communities, particularly in the rural areas of the state that have properties or have land that's available either municipal or privately owned that if we could just get an old unusable property off that off that lot, we could turn that into housing. 

Melanie Plenda: What more do you think can be done to encourage affordable housing in New Hampshire? Are there other proposals perhaps looking at accessory dwellings or something?

Taylor Caswell: We've got a lot of communities in New Hampshire that are just saying ‘no, we don't want anything to do with this sort of thing.’ Whether that's a forever ‘no’ or whether that's a ‘no’ until we can demonstrate for them that communities next door are seeing a value to their community as a result of making some thoughtful, deliberate, well-planned investments. Who are they going to be constructing these units for from an income standpoint and how does that affect their economy? These are the discussions that we really need to continue to have statewide, and that needs to be carried by communities themselves, but also by employers and by everyday people. This is impacting so much of the fabric of the state that hopefully by illustrating this and having the opportunity to talk about it, it’s going to light a bit of a fire in all the right places.

Melanie Plenda: Business and Economics Affairs Commissioner Taylor Caswell, thank you so much for joining us today. We turn to Business NH Magazine reporter Judi Currie, and Boston Globe Real Estate reporter Catherine Carlock. Welcome to you both. Judi, as you've reported the availability of affordable housing, isn't it a new issue in New Hampshire? In fact, the business and industry association has had it as a top priority for years. So how have things evolved over time?

Judi Currie: I think there's a lot greater awareness of it, particularly among the people that are not directly impacted by it, but that's changing because it's starting to hit so many people. There's a small business in downtown Portsmouth, the woman hired her son as the manager and it's based on what she's able to pay him in retail. He cannot find a place to live in Portsmouth and I think people are starting to realize all of the effects of it when they see their favorite pizza place close or when the Dunkin Donuts is only open in the morning or something. Now St. Anslem College Center for Ethics and Society has done a ‘Housing We Need’ survey for about four years and in the spring of 2020 in conjunction with that, they surveyed New Hampshire voters and found that 63% support more affordable housing. They were even aware of the games that municipalities were playing to discourage that development and they supported limiting it, but you've got a lot of people on the side of wanting to change. Now it's just trying to move that ball down the field. I don't think anyone had to tell businesses there was an issue, but there was a realization on the part of the BIA that they needed to get businesses involved as well.

Melanie Plenda: What have you heard about the reaction to the Sununu administration's proposal adressing affordable housing?

Judi Currie: It would be hard for any housing advocate to come out and say, ‘I'm not sure if this is going to work or if this is enough’ because any hands to the pump, we're going to take it. I think one concern that was expressed by some of the executive counselors was a lack of specificity defining what affordable housing is. Even that gets tricky because you have you have what has traditionally been low income housing that's 30% of area median income, but affordable housing, the so-called workforce housing, that's the area where we're really challenged. People would rather see housing advocates help the people that live in affordable housing see an expansion of the voucher program, which integrates these folks into the community rather than concentrating them or isolating them in developments that are too far from the services they need. That's a way that landlords need to be incentivized and then whatever money is being put toward housing could be put to that workforce housing to rebuild that ‘missing middle’ as they call it.

Melanie Plenda: Catherine turning to you, in Massachusetts Governor Charlie Baker is also working on a proposal to increase affordable housing with a slightly different approach than New Hampshire. Can you tell us about the details of that proposal?

Catherine Carlock: The proposal from Governor Baker was actually an economic development bill. It was called the MBTA Communities and basically what it says is that if you are a community in Massachusetts that has an MBTA stop - a public transportation stop like a bus stop, a ferry, a commuter rail, or a train - that you have to zone within your municipality for multi-family housing. Boston is exempt because it has different zoning rules, but that applies to 175 towns across mostly Eastern Massachusetts. A lot of times the state has offered incentives to try to allow for more zoning or allow for zoning for multi-family to try to encourage housing creation, and this is more a requirement that you need to build or you're going to lose out on potential grant sources from the state, which is a pretty big change. 

Melanie Plenda: You had mentioned that it was incentivized before, but now it's the other side of that carrot, so to speak. Did the incentives work, or did they not work and this was the result, or are they just doing both? How has that plan been received?

Catherine Carlock: I think it's a combination of factors. A lot of towns have done a lot of work on pushing for some multi-family housing or building condos and tapping into state programs there. This MBTA Communities program though would really be a shot in the arm, and just in creating zoning that would allow for communities to build more apartments and more units for the people who are coming into greater Boston and to Massachusetts for a lot of these companies that are hiring. That has not really been very well received at a lot of the community level.

My colleague, John Chester, and I had written a story a couple weeks ago about going through all of these comment letters from all of the 175 municipalities and various organizations. There was by and large a vast majority of towns pushing back against zoning for multi-family, saying it's going to be a stress on our municipal resources - it's a strain on our sewer system, we are concerned that our schools are going to be over capacity, and those are very serious concerns. But it's also housing advocates saying the demand for housing is going to be there regardless if you zone for multi-family or not. The point behind the multifamily zoning is trying to allow for more dense housing near transit. That type of a smart growth is something that a lot of advocates have been pushing for for a long time, and a lot of communities are pushing back.

Melanie Plenda: This question is to both of you. Judi, we'll start with you. What more can be done to encourage affordable housing in the region? Are there any other proposals that we should know about?

Judi Currie: The state's been putting out a lot of carrots, but you think 10 years ago, they put in the workforce housing ordinance and then they put in the ADUs and they're able to chip away at the problem, but the biggest issue is the education piece. It's getting those people who sit on the land use boards and make the decisions to understand a couple of things: how density can improve your downtown, and how these developments aren't really going to fill up the schools. There was a guy that put in a development outside the Manchester area. At a meeting, a woman got up and said, ‘this is going to put 145 kids in our schools,’ and so he made a note of that. It put six kids in the schools. 

Then they also need to understand that the environmentalists are even behind the builders in the sense that they don't want us to keep eating up all the available land with two acres and a three car garage. The generations coming up are not that interested in that. They want walkable downtowns or smaller homes. Right now with people wanting to relocate from other parts of the country because they can work from home, we can sell these as fast as someone can build them. We're adding housing stock, but we're not solving New Hampshire's problem. I think the best stop gap until we can get the education of the land use boards underway is that housing appeals board that has been fantastic at actually moving projects forward.

Catherine Carlock: Affordable housing creation has been a focus of Governor Baker for a long time. I think that the MBTA Communities is a really interesting concept when it comes to thinking, ‘how are we going to grow Massachusetts in a smart way and put dense multi-family housing within a half mile of a transit stop,’ seems to be a pretty good way to make that work. Yes, there are the serious concerns on the municipal side, and it is all very understandable, but the demand is there and there needs to be some sort of easing because right now things are just so high, so tight, and the demand factors are not easing up. If it's a supply and demand issue, what it comes down to is creating more supply.

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