Andrew Cline: The 'I do not care about your economics' approach to housing

With a single heated remark to a developer, a Portsmouth Planning Board member last week showed exactly how the municipal development process is broken.

Developer Mark McNabb has proposed converting a property he owns on Congress Street to a 125-unit co-living apartment building. Co-living units, once common, were zoned nearly out of existence in U.S. municipalities during the 20th century. They mix private bedrooms with shared living spaces.

Portsmouth, which has been increasingly friendly to new residential development in recent years, legalized co-living apartments earlier this year. McNabb, the Portsmouth Herald reports, changed a previously approved apartment proposal to a larger co-living proposal after the city opened its ordinances.

During the Sept. 18 planning board meeting, board member Andrew Samonas expressed frustration that the developer sought permission for two critical changes: one to increase the number of units, and the other to have a single manager on site instead of several.

Portsmouth’s new co-living ordinance requires one on-site manager for every 40 residents.

Unhappy with the request to employ one on-site manager, Samonas told the developer, “I do not care about your economics of having more than one person in this building managing these units.”

Satan inscribed “Abandon hope, all ye who enter here“ over the gates of Hell in Dante’s “Inferno." Planning boards could chisel, "I do not care about your economics” over the entranceways of their meeting rooms.

That dismissively arrogant phrase perfectly encapsulates the attitude so many planning board members have had toward the people who take tremendous financial risks to provide the homes that form the foundation of every community.

The idea that a community's housing needs can be dictated through central planning with no regard for the economic needs of property owners is one of the 20th century Progressive movement's longest lasting and most broadly harmful conceits.

Samonas gave further breath to this conceit when he said he couldn’t understand why the development team investing millions of their own dollars into the project would prefer more units than he and other board members wanted the location to have.

“I can’t for the life of me figure out why you’re asking for [45] more residents when we approved 40 very intentionally,” he said, according to the Herald.

The planning board ultimately approved the project on a 5-4 vote, and approved the single on-site manager on a 6-3 vote, the Herald reported. So the board did make accommodations for basic economic reality, over the objections of members who opposed doing so.

These co-living apartments will go for approximately $1,500 a month, the developer said, which is on the low end of Portsmouth-area rents. That's a win for Portsmouth.

Another basic economic fact that too many planning board and other local officials either don't understand or choose to ignore is that increasing the supply of housing stabilizes — and can even lower — costs.

Portsmouth’s sky-high housing costs won’t stop rising at alarming rates without more supply. The same is true in all communities experiencing rapidly rising housing costs because of a supply shortage.

The Harvard Joint Center for Housing Studies confirmed this in an August report on housing costs nationwide.

“Nationally, prices rose by just 2.2% year over year in May, compared to 5.9% the year prior, and fell on a monthly basis for the third consecutive month,” the study found. “Prices are declining in a growing number of markets where inventories have soared while they continue to climb in markets where for-sale inventories remain tight.”

Imagine that. Building more housing can lower housing prices.

Portsmouth’s City Council gets the connection, and last week the council passed four reforms designed to speed housing construction in the city, the Herald reported Friday.

Three of the four recommendations involve reducing planning board discretion. Unfortunately, they require planning board approval. Two are requests that the board change zoning ordinances to allow for more residential construction options, and the third is to remove parking review for apartments with three or more units from the planning board’s powers. Moving parking over to the site review process would reduce costly delays.

Planning boards are a big driver of recent state-level land use reforms. Over the years, too many planning board members have taken an aggressively hostile “I don’t care about your economics” attitude toward residential development. The continued prevalence of that attitude across the state is why planning and zoning boards are losing some of the powers the Legislature granted to them a century ago.

There can be no relief from New Hampshire’s severe housing shortage until local governments, particularly planning and zoning boards, drop the "I do not care about your economics" attitude. 

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Andrew Cline is president of the Josiah Bartlett Center for Public Policy, New Hampshire’s free-market think tank. The center’s mission is to develop and advance free-market policies that promote opportunity and prosperity for all Granite Staters.