New Hampshire House panel hears governor’s workforce housing bills

But requirements for local officials give lawmakers pause

Two bills heard by lawmakers Tuesday and supported by Gov. Chris Sununu offer a carrot and stick to get municipalities to allow and encourage workforce housing.

There wasn’t much opposition to the carrot (House Bill 1632), which offers a number of tax incentives for developers and municipalities engaged in construction new affordable housing.

But the stick, HB 1629, gave some lawmakers and municipalities pause, especially a provision that would mandate that those sitting on planning and zoning boards take a training course – and pass a test – if they want to vote on housing projects.

They would have to take a daylong course developed by the state Office of Strategic Initiatives or an equivalent and pass an OSI test. The course would enable local board members to under better understand the statewide affordable housing law and state policy to encourage such housing, which is crucial to grow the state’s economy, say proponents of the bill.

“We are in a crisis,” said Rep. Joe Alexander, R-Goffstown, the sponsor of both bills, in a hearing before the House Municipal and County Government committee. “Business is looking for employees out of state, but they are unable to accept jobs here if they can’t afford to live here. This poses a threat to the future of New Hampshire.”

“The lack of affordable housing is pinching our economy,” said Taylor Caswell, commissioner of the New Hampshire Department of Business and Economic Affairs. “If there is nowhere appropriate for this workforce to live, they will go elsewhere.”

But a number of lawmakers and were uneasy about the bill.

“How do you block an elected official from participating” in a planning or zoning hearing, asked Bruce Tatro, D-Swanzey, vice chair of the committee.

So were a number of local officials, who said they have a hard enough time recruiting board members as it is.

“It’s a terrible job with terrible hours,” said Bruce Garland, chair of the Lebanon Planning Board. “We are reaching out for new blood, and we are very concerned that mandatory anything will turn people off.”

Frustrated developers

The provisions also earned the strong opposition of the New Hampshire Municipal Association, especially one that would prevent board members from voting on an application if they didn’t pass a test.

“If they don’t have a quorum, you will prevent the board from acting, which is the opposite of what you are trying to do, especially if the goal is predictability in the process,” said Margaret M.L. Byrnes, executive director of the association.

As for requiring someone to take a test, that raises “all sorts of interesting issues about learning disabilities, literacy requirement, access,” she said.

Still, frustrated developers thought the mandate was needed.

“People are hung up on mandates, but more education isn’t a bad thing,” said Jack Franks, CEO of Avanru Development Group, a developer of affordable housing in Walpole.

Board members “should have a basic knowledge of rules and procedures,” he said. “It’s hard enough to bring resources to build affordable housing, and it’s harder when someone if a board acts in a malicious way. I see that time and time again.”

The other provisions in HB 1629 are not mandates on a municipality or officials per se. Currently, a municipality can reward developers for affordable housing. Under this provision, municipalities can require that developers set aside a portion of a project as affordable, provided that the project isn’t economically unfeasible – a determination that would have to be made by the board in question.

The bill would also require towns that allow denser zoning for retirement communities to extend that to all types of housing development.

There are also various provisions to speed the approval process or to make it a little easier on the developer.

For instance, boards must provide written findings of fact to reject a project, and failure to do that would be grounds for an “automatic reversal.”

Finally, the bill expands the definition of “affordable housing.” Currently it’s what someone who is at the median income can afford. Under the measure, it would be what someone at 120% of the median could buy.

Tax breaks

As for HB 1632, it drew a few questions, but not as many objections. The bill would expand some existing tax breaks to affordable housing, including tax increment financing. It also would allow economic development and revitalization districts to include housing and increase the tax incentive period for up to two decades – four years for new residential units, eight for affordable development and another eight if the units are located on the second story of a downtown.

Developers would also be able to deduct a quarter of the gross business profits tax attributed to income derived from workforce housing, and first-time homebuyers would cut their real estate transfer tax rate from 75 cents to 50 cents per $100.

Finally, municipalities that encourage workforce housing would be named a “housing champion and receive a percentage of BPT revenue such workforce housing produces. In addition, the state would issue as much as $100 million in “advantage bonds” for such communities to pay for infrastructure, presumably needed because of the increase of housing.

All this is “remarkable,” if overdue, said Ben Frost, managing director of financing for the New Hampshire Housing Financing Authority, one of the key backers of the bills.

“We have done some things in the past, but clearly not enough,” he said. “Now everyone seems to be getting how important this is. Suddenly we are the cool kid on the block.”