LACONIA — A social media post by The Laconia Daily Sun posed a simple question:
“Have you had trouble finding housing in your price range in The Lakes Region?”
About 70 people commented, nearly all saying moderately priced housing was extremely scarce, or as Christine Russell put it:
“It’s easier to find unicorns and dragons than affordable housing in this area!! We’ve been looking for over 2 years for a better apartment without gaping holes around the windows!”
A comment from Jennifer Hunter Doris, of Gilford, was typical.
“As a single mother with no financial help, it’s a daunting task. I have a decent job and can’t afford $1,200 plus electric, heat, food, car, insurance, student loans and clothing and activities for my child. Every month is a struggle. Everything increases in price except my paycheck.”
The July report of the New Hampshire Housing Finance Authority said the statewide median gross rent for a 2-bedroom unit in 2019 was $1,387, with Belknap County at $1,057. Average utility costs for such an apartment in the county are $253.
Median means that half of the apartments cost more and half less. Nicer units cost more, if one could be found. The report found the vacancy rate in the county is 2 percent. Anything below 3 percent reflects a market where an apartment that comes vacant is filled immediately.
Many local apartments are of an older vintage, but there are exceptions, including the 48-unit Apple Ridge development on Provencal Road and the 30-unit Perley Canal Mill building at Beacon Street West.
Prices at Perley Canal range from $995 for a studio to as much as $1,895 for a two-bedroom unit. Apple Ridge, near Lakes Region Community College, offers one-, two- and three-bedroom units, with prices ranging from $1,235 to $1,550.
Carmen Lorentz, executive director of Lakes Region Community Developers, which owns and operates 365 income-restricted housing units, said whenever there is a vacancy, it is quickly snapped up.
Since there is also strong demand for market-rate apartments, one might expect developers to build much more of this product.
“But where would you put them?” Lorentz asked.
“Zoning is not friendly to multi-family development. That’s the biggest hindrance. A lot to do with our zoning reflects what was going on 30 years ago.”
Influx from Massachusetts
Former Mayor Ed Engler said some of the roots of the housing shortage go back to the 1980s, and the “Massachusetts Miracle,” a period of strong economic growth in New Hampshire’s neighbor to the south.
“That was what scared everyone,” he said. “People started moving up here in droves. Their houses were worth more in Massachusetts and a lot of people were investing in real estate and condominiums in New Hampshire.
“Everybody got nervous that we’d be completely overrun by people from Massachusetts.”
Regulations were passed to limit growth. Many communities required lot sizes of 2 acres or more for new homes. Many of these restrictions remain.
Such zoning requirements run opposite to trends in modern housing developments, where greater density and smaller lot sizes are the norm. Higher density brings down the per-house price.
“If we want $200,000 houses, we have to allow for higher densities,” Engler said.
The median sales price for homes in New Hampshire last June was $300,000, up from about $180,000 in 2012, according to figures from The Warren Group.
Existing restrictions often call for relatively low density.
In the heart of Laconia, a rule on the books requires a 10,000-square-foot lot, about a quarter-acre, in order to build a home.
“To require 10,000 square feet, that’s a crazy high number,” Engler said. “You don’t need anywhere near that. Many lots in Laconia before there was zoning are not anywhere near 10,000-square feet.”
Another problem for residential developers is that much of the land in New Hampshire is hard to build on.
“It’s hilly, it’s rocky, there are trees, wetlands,” Engler said.
“Some parts of the country have a lot of farmland, or are flat and pretty easy to get ready for housing. Here it is not. Here it is expensive.
“That’s a strike going against us. It’s made worse by exclusionary zoning and lack of investment in public utilities. We don't have water and sewer in a lot of empty areas.”
Opposition to development
The former mayor said that despite a lack of housing stock in the state, there remains strong sentiment in some quarters to preserve the status quo.
“There is a guiding philosophy for some people that we don't want to cut down any more trees or disturb any meadows because we like to look at them and that's why we live here,” Engler said.
“That’s fine and good, but there is a middle road that would be acceptable to most people. If you looked at New Hampshire from the air, you would see almost nothing but trees. It’s 90 percent covered. Modest annual growth in housing is not going to make a huge difference in that regard.”
A second reason people object to new housing is a fear that property taxes would go up to pay for a larger school-age population.
“Property taxes are a huge deal in New Hampshire, probably more so than any other state,” Engler said. “A way to control property taxes was to get rid of children because a vast majority of tax dollars in most communities are spent on schools.
“That was a real consequence of the ‘New Hampshire Tax Advantage.’ Children became taboo — too expensive to educate.”
Statewide, public school enrollment has fallen by about 20,000 students, a 10 percent drop, in the last decade, according to the state Education Department.
Gilford’s enrollment went from 1,326 in 2008 to 1,157 in 2019, Laconia’s enrollment went from 2,251 to 1,961 in the same time period, while the Inter-Lakes district, serving Meredith, Center Harbor and Sandwich, went from 1,184 to 1,013.
Meanwhile, the cost per pupil has gone up, reaching a state average of $16,346 in 2018-19, compared to $11,135 in 2007-08.
These costs have gone up along with the number of children who have special needs, require special attention or are not prepared to go to school, Engler said.
“There’s a direct correlation in most of New Hampshire between Medicaid births at local hospitals and the expense of the school population,” Engler said.
Other costs, including school district employee salaries and benefits, have also increased.
Engler said middle-income people are not having children at as high a rate as lower-income people.
Also, school-age population trended downward after the children of the Baby Boomers grew up.
Engler said one can see proof of the enduring opposition to housing when a developer has a non-residential proposal for a piece of property.
“Somebody will go to a local land use board and say, ‘Let me do this or I’ll build houses.’
“That’s the No. 1 threat, ‘Give me what I want or I’ll build houses,’ as if that is the ultimate evil. That threat dates back to the ‘80s and is still heard today.
“What kind of surprise is it that we have a housing shortage when a developer knows it’s the ultimate threat to build houses, and that threat is taken seriously.”
Support for growth
Dean J. Christon, executive director and chief executive officer of the New Hampshire Housing Finance Authority, said in his organization’s 2019 report that growth is needed.
“New Hampshire is one of the three oldest states in the country, and the senior segment of our population is expected to grow faster than others. Yet we need young families to take their place both in the labor force and to stabilize our declining school population.”
Russ Thibeault, president of Applied Economic Research, said in the report that with the state’s current environment of slow growth, an aging population and low birth rates, some communities would be well-advised to encourage residential growth.
“Or else they face the unpalatable option of closing neighborhood and local community schools because of unsustainably low enrollment,” he said.
He said some people wrongly believe that every occupied housing unit in the state generates two children, when the actual enrollment-per-occupied-unit number is 0.33.
“An inaccurate understanding of the relationship between new housing and school enrollment engenders and perpetuates inappropriate growth policies that stymie new construction at a time when we need more housing and, in many districts more students,” Thibeault said.
“Fear of rising enrollment is passé for nearly every school district in the state. It is a legacy concern, dating back to the last period of rising enrollment, nearly 30 years ago.”