New Hampshire businesses creating workforce housing

An innovative new loan fund of nearly $9 million is being brought to bear to help develop workforce housing in the Upper Valley. With investments from eight major local employers, the Upper Valley Loan Fund is a new approach to the state’s housing crisis that has employers and housing advocates statewide taking notice. 

While the shortage of affordable housing is recognized as a statewide issue, the Upper Valley has been experiencing its own crisis for decades. A report by Vital Communities, a regional civic engagement organization, says the Upper Valley needs 10,000 new homes by 2030 to meet demand, which would require tripling the current annual rate of housing production.

Tucked under the umbrella of Vital Communities is a corporate council made-up of the top executives of major employers in the Upper Valley who put their heads together on a regular basis to consider the issues facing the region, says Allan Reetz, director of public and government affairs for Hanover Co-op Food Stores.

“Through lending our voice, our muscle and our insights, we can move some needles,” says Reetz. “It was a few years ago that we really centered on housing, not for the first time but to a brand-new level. Housing in the Upper Valley has been an issue for well over 20 years. I think the first housing breakfast might date back to 2004.”

Clay Adams, president of Mascoma Bank and chair of the corporate council, says the lack of housing is a barrier to economic vibrancy. “We are all so pained by this that we wanted to try to be part of the solution.”

The eight employers in the Upper Valley Loan Fund include: Dartmouth Health, Bar Harbor Bank and Trust, Citizens Bank, Dartmouth College, Hanover Co-op Food Stores, Hypertherm, King Arthur Baking, and Mascoma Bank.

The Upper Valley Fund will be managed by Evernorth, a nonprofit that provides affordable housing and community investments in Maine, NH and Vermont. Deb Flannery, vice president of lending at Evernorth, says the fund will allow them to build or preserve apartments for people who can afford rents of $1,200 to $1,600 per month. By comparison, the current market rate for apartments in Grafton and Windsor counties is between $1,500 to $2,200 per month, she says. “One of the things that is different about this collaborative is its cross-sector approach,” says Flannery. “It’s not just one employer doing it on their own but a collaboration of employers and affordable housing partners to leverage the full capacity the system has to deal with this problem.”

Currently in the Upper Valley area, there are about 250 units in the direct pipeline. With the money these business have put into the fund, another 250 units are targeted for development. While some contributors to the fund put forth as much as $2.5 million, for the Hanover Co-op, Reetz says, “Its donation of $100,000 may seem small but its a lot for a grocery cooperative. It would take 25 Hanover Co-ops to equal one Mascoma Bank.” 

The partners will earn 1.5% on their investment, which is a small return with a big community impact, Reetz says. “I tip my hat to those who were able to put forth funds. They had to also convince their boards to commit to the long haul.”

Harrison Kanzler, executive director of AHEAD in Littleton, which completed Lloyd’s Hills Apartments, a 28-unit project in Bethlehem in 2022 and is now working on 58 units in Woodstock, says the financing is always a complex and challenging process.

“The work that Evernorth and Mascoma Bank did in the Upper Valley, working with businesses to get together low interest funding and financing options for developers of workforce housing is pretty incredible,” says Kanzler. “Seeing something like that in every region of the state would be huge.” 

Kanzler says people may not realize how much money is involved in these developments. “If we have to carry (even for a year or two) a 7% line of credit, that can be hugely detrimental to the development and our ability to do it. Having a fund that’s largely pooled resources from businesses investing in housing to bring that line of credit down to 2% or 3% can make a huge difference.”

Adams of Mascoma Bank agrees. He says projects simply cannot get built without some flexible capital. “There are all kinds of sources, and this is just one of those. But it shows that the businesses and institutions in this are willing to put their money where their mouth is,” he says. 

Patrick Hess, director of real estate development for Avesta Housing, a nonprofit that develops and advocates for affordable housing in NH and Maine, says the housing crisis is so acute that anyone who has an interest in addressing it in any shape or form needs to be thinking as creatively as possible about partnerships. “The Upper Valley fund really speaks to the commitment of those employers and the deep need,” Hess says. 

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These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.