By Rosemary Ford and Caitlin Agnew
Affordable housing is an issue across the region, but the pinch is especially felt here in New Hampshire. Vacancy rates for rental units are 8.6%. The median rent for a two bedroom unit is $1,764, an 11.4% increase in just a year. On this episode of The State We’re In, New Hampshire Housing’s Executive Director and CEO Rob Dapice, and Senior Director of Research, Engagement, and Policy, Heather McCann talk about what's going on in the housing market and how it affects residents.
Melanie Plenda:
Rob, can you give us some background about New Hampshire Housing and the survey's origins?
Rob Dapice:
Sure. Thank you, Melanie. New Hampshire Housing is a public corporation and what that means is that we were established by state law and we have a board of directors appointed by the governor and executive council. But we're not part of the government. We don't receive operating funds from the state. But we administer a range of programs that help promote and finance housing for the people of New Hampshire, and that includes financing multifamily, affordable rental housing. It includes helping our lender partners to offer mortgages that help people achieve homeownership. And we administer the housing choice voucher or section eight program for areas of the state that are served by a local housing authority. We also do a fair amount of research work and conduct research engagement and policy work to help inform stakeholders around the state in their housing conversations. And that's where the rent survey comes from.
Melanie Plenda:
Rob, can you give us a broad overview of the findings?
Rob Dapice:
Sure, you touched on a few of them in the opening, but rents are up again, you mentioned the gross monthly median rent for two bedroom apartments of almost $1,800, statewide, a vacancy rate that's abnormally low at 0.6% statewide, and an annual increase in monthly gross rent of 11.4%, across the state, And the survey breaks that down by region, but to talk a little bit about what that represents in terms of a trend. That's the fifth year that we've seen increases in the monthly rent and the vacancy remains at an extraordinarily low level, we've been doing the survey using similar methods going back for 40 years, and this is the lowest we've seen the vacancy is where it's been in the last couple of years.
Melanie Plenda:
And Rob, what do these findings mean not only for renters in New Hampshire, but for people who want to buy a home in New Hampshire?
Rob Dapice:
They have very few choices. And so again, people are often looking for a home when they experience life events, maybe they want to form a new household, they're getting married, or moving in with a partner. Certainly, it can be as a result of divorce, or somebody's moving into the workforce, graduating from college, whatever the reason may be, there are fewer and fewer choices and that restricts people's ability to live the way they want to live. It restricts labor, mobility and affects the economy in that way, and certainly affects people who are most vulnerable. Whether it's individuals with disabilities, coming out of incarceration or lower, simply lower on the income spectrum, they're more more vulnerable and more likely to become homeless or lose their housing stability and wind up in an overcrowded or unstable situation.
Melanie Plenda:
And Heather, what did you think of the findings? Did anything about it surprise you at all?
Heather McCann:
Well, given the overall housing landscape in New Hampshire, as Rob has described, I was confident that we would see an increase in rents. The question was just how much they would increase. The high cost of purchasing homes and the very limited supply of homes for sale in New Hampshire especially for first time homebuyers or someone looking to make the transition from renting to ownership puts more pressure on the rental market. So I wasn't surprised to see the vacancy rate remain under 1%. Every year, though, I've come to expect it. So it's not much of a surprise. But a really big concern is the affordability issue. The stark contrast between rental costs and the median renter household income is a troubling reality that puts tremendous financial strain on many individuals and families throughout the state.
Melanie Plenda:
What would cause such a huge spike? And are the reasons that you're seeing the spike in Grafton County? Similar to reasons for increases across the state?
Rob Dapice:
Yes, I think similar dynamics exist in Grafton County as as to others. I mean, Grafton County has a very sort of micro urban area in Lebanon, Hanover, Enfield, where there's a lot of economic activity, a lot of demand, and not a lot of other metro areas from which people might plausibly commute. And so I think that creates sort of a perfect storm at times. But certainly we see significant rent increases like that often when a building changes ownership. Sometimes there are reasons that a new owner has to put a lot of money into a new property. But whatever the reason, it's very hard for households to manage that kind of increase.
Melanie Plenda:
And how their rental costs have been rising and vacancy rates have been falling for some time yet, it seems like the pandemic has exacerbated these trends. I mean, is that accurate? And if so, why is that?
Heather McCann:
Yeah, so I would say this is true, the pandemic prompted a shift in living preferences as remote work opportunities provided people with greater flexibility, many people reevaluated their space requirements in New Hampshire as a desirable place to live. So while we already had a challenging market, both on the rental and purchase side prior to the pandemic and increase in demand, coupled with limited supply, drives prices higher and adds competition to the market. We also saw, particularly in last year's survey, more rental properties that were sold than we've ever seen in previous years. And that could be a result of the pandemic, or an increase in property values people saw an opportunity to sell. And so this change in ownership, as Rob previously mentioned, often leads to adjustments in rental rates, causing rents to rise in certain cases.
Melanie Plenda:
And Rob, what does the survey tell us about the overall housing market and where it's headed?
Rob Dapice:
Historically, as I mentioned, this is extraordinarily a time of extraordinarily tight housing market conditions. It's just not normal to have so few houses on the market and so few rental apartments. I think it is important to get this data at the state level, because there has been some news coverage of housing market conditions loosening in certain areas of the state in some areas of the country. There are some news stories that talk about the southwest, where population has exploded, there's been a lot of new multifamily construction. And as a result of that explosion in new construction, rents have at least moderated somewhat, the report tells us that we simply haven't seen that yet. And there's really no nowhere relief coming just yet in terms of New Hampshire and housing market conditions.
Melanie Plenda:
Many economists link the housing shortage to the tight job market. After all, it's easier to find people to work somewhere if they have a place to live. So affordable housing can be linked to the overall economy of a community or the state. Yet, as you mentioned, building more housing in a community can be difficult, especially if people are concerned about too much development in town. So Rob and Heather, can you speak to that? What could you say to people who don't want development in their community or backyard? Let's start with Heather and then to Rob?
Heather McCann:
Yeah, so the availability of affordable housing plays a significant role in attracting and retaining a skilled workforce. So when people have access to suitable housing, they're more likely to consider opportunities in a given area, boosting the overall economy of the state. Community engagement, I feel, is really critical, talking through concerns educating community members and, and what offering diverse housing options means within each community, I often find people have an easier time connecting these dots, when it affects them personally. So for example, their children are looking to buy or rent a place close by, but there's nothing available or affordable to them, or the household is looking to downsize and they want to stay within their community, but there isn't anything available. So when you make these connections for people, it can help foster productive conversations around these issues.
Melanie Plenda:
And just a follow up on that I know that even in covering local communities for years the idea of affordable housing will always sometimes get the pushback from community members that this will lower my property values or this will somehow impact us adversely. So when can you talk about some of those specifics? Like what are the benefits of having a more diverse, a more diverse housing market in a community.
Heather McCann:
So it helps everybody in the community overall. So you get people that are going through kind of life stages. If you think about where you've lived in your lifetime, it's not always that single family home, it's an apartment, and as you go through your life, you have different needs. And hopefully, you can afford to make changes to your housing situation, based on those needs and how they evolve and change over time. I think people have a stigma of affordable housing or workforce housing. But they often neglect to realize that affordable housing, workforce housing can be naturally occurring, so it's homes that maybe are smaller, that are more affordable to people with a lower income. It's not necessarily a building that's just dedicated to people of a certain income level. And so it's a lot broader than people may assume. And it impacts everybody in their community in one way or another.
Melanie Plenda:
And Rob, what do you think?
Rob Dapice:
So, first I would say absolutely. The tight housing market affects the economy and labor supply. And that's why you see the Business and Industry Association, a statewide Chamber of Commerce, has for years identified housing as one of its top issues. And you hear from large employers like Dartmouth Health and Fidelity that tell stories about numerous employees accepting jobs, and then rescinding their acceptance because they can't find a place to live that they can afford. In terms of what I would say to people who are concerned about development in their town, I would say first, I understand and change can be frightening and unsettling. But Heather talked about education. And I think one of the wonderful things that we've seen is in a lot of towns in New Hampshire, the places that people love most about their town, the downtown's that were built in the 19th century, are now made illegal by local zoning. And in a lot of cases, if you wanted to build a similar community, now, you couldn't do it because of the regulations that have been imposed in the past few decades. So just being aware of that, and being aware that a lot of the most wonderful places in our communities are, are really not able to be replicated or improved, because our local zoning is important. And the other thing I would say is all changes are unsettling, it's scary, it's important to understand the changes happening, and particularly for those folks who are in suburbs that might be considered wealthy or desirable, those places are getting a lot more expensive to live. And the path that we're on in a lot of communities is for less expensive houses to become more expensive houses. And that affects the community when people who have lived there for a long time, can't stay in the community that they know and love and in many cases work in. And so understanding how providing the opportunity for other reasonable housing options and more affordable housing alternatives, can sort of preserve a lot of what's special about the communities important too.
Melanie Plenda:
And one more follow up question. You had mentioned what the state could do more to address local regulations. Can you talk a little bit more about that? What could the state do?
Rob Dapice:
So, as I said, I think the state has a role in working with municipalities to ensure that their regulations are not so burdensome, that private property owners are sort of unable to meet the demand for housing. So this already exists in law, just the state has a workforce housing law, which says that cities and towns have to create or allow for reasonable opportunities for different kinds of housing to exist. But I think that that law could perhaps be a little bit more specific, or maybe there's opportunities to identify the distinctions between reasonable regulations that serve to protect a community's character and environmental quality and restrictions that go too far.
Melanie Plenda:
Oh, that's really interesting. New Hampshire Housing Executive Director and CEO Rob Dapice, and Senior Director of Research, Engagement, and Policy, Heather McCann. Thank you so much for joining us today.
The State We’re in a weekly digital public affairs show is produced by NH PBS and The Marlin Fitzwater Center for Communications. It is shared with partners in the Granite State News Collaborative, of which both organizations are members.