A little-known and never-used provision in the City of Laconia’s zoning ordinance lacks incentives, but could help developers build denser housing if it were rewritten.

Section 235-21 of the city’s zoning ordinance lays out the Housing Redevelopment Overlay District, which is a small section of neighborhoods located in the area of downtown, established to promote the redevelopment of affordable housing units; to encourage investment in multi-unit housing stock; to increase the quality of living conditions for renters; to provide rental housing in close proximity to the central business district; and to preserve the character of the city’s urban neighborhoods.

That section of the municipal zoning ordinance was adopted prior to the state’s adoption of RSA 674:21, relative to innovative land use controls. The Legislature, in adopting that RSA in 2023, provided municipalities with a range of options to use in their efforts to shape land development in ways which reflect the goals of their master plans and address growth-related headaches.

“I think if the board were to make some modifications to this specific section, it may encourage additional affordable housing and workforce housing in the areas of the overlay district, which are already areas which would be ripe for this,” said Ethan Wood, an attorney at Norman, Cheney & O’Neil. “I know from discussions with a client that there is certainly the possibility of additional workforce housing in this overlay district, if there was more flexibility that this board had with regard to applications.”

Planning Director Rob Mora indicated there may be an opportunity for the city to look closely at that section of the zoning ordinance to make headway in sustainable housing development. There’s never been an applicant who used the overlay district since its adoption.

“We adopted this Housing Redevelopment Overlay District in the area of town just over here where it is most dense,” Mora said. “Since 1995, nobody has ever utilized the Housing Redevelopment Overlay District, probably because it’s not written very well and there’s no incentive to redevelop within that district with that ordinance — it’s just not very useful.

“These are areas that have traditionally been workforce housing, even though we don’t have any adopted definition of workforce housing, and providing an incentive for people to redevelop some of these older lots to revitalize neighborhoods such as just across the street over here,” Mora said. “That would be beneficial, if that’s something that the council and the planning board is interested in doing. It’s a very limited area that is in the housing overlay district.”

Potential incentives for developers which could be included in a rewrite of the ordinance are mechanisms to relax density restrictions, allowing developers to sell more overall units; abatement, which has been done in the city on several redevelopment projects in the past; or waivers for impact fees, which are assessed when a development is underway. PILOTS, or payments in lieu of taxes, could also be a somewhat novel incentive on the commercial side.

On the flip side, the city could require developers to satisfy performance standards in order to qualify for incentives.

That could include restricting some number of units to lower rates for a set period of time, for example — the city has seen recent success in brokering such arrangements.

“If you can increase the density, then you can do more with less,” said Matt Mayberry, CEO of New Hampshire Home Builders Association, in an interview. Other incentives, which may seem small — but make a big difference to developers — might include relaxing requirements for sprinklers on multi-unit buildings with multiple routes of egress, for example.

Mayberry also said deed-restricted covenants which promote ownership are generally better for developers and communities alike.

“When you’re tied to a property, you’re tied to a community,” he said.

“Developers have been in a tricky spot since COVID,” Wood said in an interview, noting the costs for materials, land and otherwise have increased in recent years.

“It’s really expensive to build housing; it’s really expensive to redevelop things.”

Reducing red tape also makes a huge difference for developers, because for them, time is money, Mayberry said. Having a streamlined process whereby developers can work through city requirements makes a big difference to their bottom line.

“The longer these things go, the more expensive it becomes,” Mayberry said. “Clarity is what helps them the most.”

“Anything that we can do to facilitate redevelopment that complies with the ordinance is a good thing,” Wood said.

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