State needs to add 90,000 units by 2040 to make up gap

As 2024 approaches, there is still “no big fix” for New Hampshire’s housing shortage, but there are incremental efforts, said panelists during the Business and Industry Association’s recent Workforce Housing Forum, including to speed up construction by lessening and loosening local and state building regulations.

Held Oct. 11 at the DoubleTree by Hilton, the forum was sponsored by New Hampshire Housing and featured a quintet of speakers who presented their perspectives on how the Granite State presently finds itself 23,500 housing units short of what are needed between now and 2030.

That shortage, according to the 2023 New Hampshire Statewide Housing Needs Assessment, which was commissioned by New Hampshire Housing, found the need will grow to some 90,000 units between 2020 and 2040.

The report offered suggestions for addressing the situation, among them: “additional funding and financing tools to support the development of single-family and multifamily housing;” planning and zoning changes at the municipal level; promoting higher-density development; and supporting expanded manufactured housing development and conversion of manufactured home parks to cooperative ownership.

Additionally, the report called for building smaller houses; increasing opportunities for detached accessory dwelling units; and encouraging conversion of commercial and office real estate and properties to residential use “through streamlined permitting and tax incentives.”

In December 2022, New Hampshie House Speaker Sherman Packard, R-Londonderry, created a Special Committee on Housing that is chaired by Rep. Joseph Alexander, R-Goffstown.

Although Alexander was unable to attend the BIA housing forum, an update on legislative efforts to address the housing shortage was presented by Ben Frost, the deputy executive director and chief legal officer of the New Hampshire Municipal Association.

In the upcoming Legislative session, Frost says he expects lawmakers will consider bills to expand the purview of the Housing Appeals Board to include appeals from state agencies; the issuance of road permits “by default” if the state Department of Transportation does not act on an application within a specific time; enlarging the definition of accessory dwelling units to allow detached units; and addressing “onerous parking requirements.”

There is “a lot of stuff” coming in on housing to the Legislature, said Frost, including a bill to increase the amount of the real-estate transfer tax that goes toward affordable housing; eliminating fire sprinklers in converting older, single-family homes into multifamily dwellings; and “yes, short-term rentals.”

While Frost made the closing remarks at the BIA forum, Mike Skelton, the president and CEO of the BIA, made the familiar, opening remarks.

He called the housing crisis “daunting,” adding that it is the subject of numerous conversations.

An upside to the lack of housing is that many partners are working on the problem, he said.

Ben Cushing, president of the New Hampshire Association of Realtors, reminded forum attendees that the highwater mark of housing in the state was in 2005 when there was “just shy” of 14,000 homes for sale, which is currently down to 1,400.

Normally, he said, there are between six and seven months of inventory on the market, but as of late September, the inventory was down to just two months.

“It’s crazy,” Cushing said, with buyers offering “way over” the asking price, often in cash, while also waiving contingencies.

Back in 2005, a property being on the market for 150 days “was good,” he said, whereas now it’s literally minutes.

The good news is that the strong demand for housing underscores that “people want to come to this state,” Cushing said.

Before the COVID-19 pandemic, “business was good,” he said, and real estate brokers were able to convince Gov. Chris Sununu that their work was “essential.”

“It worked,” said Cushing, but “the market just went to the moon” from there, with the median sales price of a single-family home surging from $200,000 in 2000 to $490,000 at present.

This September, the average number of days-on-market for a house was 23, Cushing said, which is “quick,” but a little longer than before. There are pockets where fast sales remain the norm, he said, among them the Upper Valley, which is “not slowing down.”

“How do we fix this problem?” Cushing asked, before answering himself that he was “not really sure there is a big fix.”

Panelist Sharon Kopp, who traveled to the BIA housing forum from Lancaster, said her company, PAK Solutions, where she is the human resources manager and director of community relations and affairs, has been unable to find affordable housing for its workforce, which increased from 18 employees to 88.

In response, Pak Solutions, a provider of flexible packaging products, has purchased several buildings on Main Street in Lancaster that it has been converting into a mixed retail/residential use.

The company is also looking at buying a mobile-home park for employee housing, Kopp said.

She pointed out that employee housing is not inexpensive, noting that “doing two apartments” is about the same cost as the median price of a single-family residence.

Pak Solutions wants to bring a mix of people to Lancaster, she said, adding that it wants to create housing that’s “for everybody.”

Amy Chhom, vice president of technical and special projects at ROC USA Cooperative Solutions, spoke about housing in the Queen City, and the impact of the proposed BioFabrication Cluster, which is expected to create 6,900 jobs with a resultant demand for local housing and services.

Chhom said there should be an emphasis on home ownership, not rentals, in the downtown, explaining that “most people’s wealth comes from real estate” and also that people who own property are more likely to remain with a nearby job.

Employers need to “help incentivize new hires to purchase,” she said, and municipalities should provide abatements for lead and asbestos remediation.

Broadly, there should be more support for what Chhom called “the next generation of developers,” who, while less experienced, are willing to do smaller projects that larger developers are not.

Ericka Canales, executive director of the Coos Economic Development Corp., on Main Street in Lancaster, where Pak Solutions is converting the two buildings behind her into a mixed commercial/residential use. (Courtesy photo)