Fiscal Committee approves $100m housing program; plan moves to Executive Council
Initiative aims to boost multifamily construction, workforce housing across New Hampshire
The New Hampshire Joint Legislative Fiscal Committee approved a $100 million, federally funded housing investment plan Friday, a critical step for a proposal touted by Gov. Chris Sununu as a means to increase rental capacity and workforce housing.
Voting 8-2, the committee signed off on a program to devote $60 million to matching grants for housing developments in the state and $40 million to grants to incentivize towns to speed up permitting processes and overhaul zoning laws. The initiative still requires approval from the state’s Executive Council, which meets April 20.
The new program would allow developers or housing organizations to apply for up to $3 million in matched funding for projects, provided those projects would be used for rental housing and include at least five units.
If the program is approved next week, the application period will begin in June, said Department of Business and Economic Affairs Commissioner Taylor Caswell, whose department designed the program and would be tasked with distributing the money. Developers will have until June 2023 to apply.
Meanwhile, towns will be eligible for $10,000 per unit of new housing they approve within six months, and will have access to funding to help demolish dilapidated properties or to hire consultants to help overhaul their zoning ordinances.
Addressing the committee Friday, Caswell said he expected many of the early grants to go toward developments driven by housing nonprofits.
“I’m anticipating that the first several rounds of this program would be held exclusively for our nonprofit developers who are developing exclusively those types of affordable units,” he said. “And for smaller developments.”
But some Democrats have continued to express concern that the initiative does not include income requirements, and urged Caswell to prioritize affordable housing projects when approving applications.
During Friday’s Fiscal Committee meeting, Sen. Cindy Rosenwald, a Nashua Democrat, asked Caswell why the department had opted to categorize the funds as “revenue replacement,” a designation that exempts the state from certain income limits. Approving the funds under the standard process would have required that the state target them to families making 300 percent of the federal poverty level or below.
“There’s no requirement for affordability standards,” Rosenwald said. “So I’m wondering why we chose not to build affordable housing with these public funds?”
Caswell said the state had used the revenue replacement approach in order to maximize flexibility for the projects and avoid limitations. But he said he expected many of the housing developments that apply for the funding to already have income targets because they are receiving external grants that require that.
Still, he said, the department anticipated a mix.
“They will be projects that have a zoning requirement that might be forced by locality, like an inclusionary zoning requirement,” he said. “They might be projects that have mixed income within them, so there’s a component that has an affordability piece to it, but then there’s a market rate component to that. And they might be in a rural town where you have an old Victorian house that somebody’s converting into five, six, seven units.”
Caswell said the department would publish lists of which projects get approved and how much each receives. And he said guidance for how developments could apply would be published ahead of June.
Rep. Susan Almy, a Lebanon Democrat, noted issues Lebanon has had with building affordable housing; housing developments that have been approved recently have tended to benefit residents making above the median income, she said, and not those who need it most. Still, Almy said she would support the funding due to the extreme need in the Upper Valley.
Senate President Chuck Morse, a Salem Republican and a candidate for U.S. Senate, said he supported the intention to make the program as flexible as possible.
First announced during Sununu’s State of the State address in February, the $100 million plan has received varying reactions from advocacy groups. ABLE NH, a disability rights group, has opposed the structure of the program, contending that it should be targeted to low-income residents and include guarantees for independent living projects, noting that people with disabilities have been burdened by the pandemic.
But one leading affordable housing organization, Housing Action New Hampshire, is supportive of the move.
“There are certainly a lot of projects from the nonprofit developer community that are focused on delivering affordable units to New Hampshire’s workforce, that are in the pipeline and honestly have competed for very limited resources,” said Elissa Margolin, the organization’s director. “And so now we have an opportunity to move a lot of those ahead and then partner with municipalities at the same time.”
The next step, Margolin continued, is to organize applications so that the affordable housing projects are given priority.